Syria's new regime marked the first anniversary of Bashar al-Assad's overthrow on December 7-8. The Arab Republic, governed by the Assad dynasty for over half a century, collapsed just 11 days after armed opposition forces led by Al-Qaeda-adjacent Hayat Tahrir al-Sham (HTS) launched their offensive. The former president allegedly fled to Moscow via Abu Dhabi, whilst Ahmed al-Sharaa declared himself the country's new leader within hours of the former dictator's departure.

To commemorate the first anniversary, tens of thousands of Syrians staged celebratory marches in Damascus, Homs, Tartus and Hama. In Latakia, the Assad family's ancestral home, local authorities organised theatrical performances at the National Museum as part of the festivities. Meanwhile, Syria's long-term “interim president” al-Sharaa, speaking to American journalist Christiane Amanpour on the sidelines of the annual Doha Forum, claimed that the new authorities had transformed Syria from an unstable region into a potential model of regional stability within a year.

"Syria has opened up to the world. Now every interested party will be able to leverage its strategic position and influence to stabilise the region," he said.

Economic devastation persists

Nevertheless, Syria's new authorities cannot yet boast of economic achievements. Al-Sharaa inherited from Assad a country in ruins with destroyed state institutions. According to UN data, 90% of Syria's population lives in poverty, with the majority relying on international humanitarian aid. Electricity is still supplied for an average of just two hours per day, and over 2mn Syrians live in tents (before the war began in 2011, Syria's population exceeded 20mn).

The problem is compounded by Syria's lack of territorial and economic unity. Damascus still does not control a third of the country's territory: the northeast remains under Kurdish forces, the south and southwest under Druze and Israeli influence, whilst pro-Turkish formations remain active in the north along the Syrian-Turkish border.

The Turks, who have a long-term problem with the separatist notions of the Syrian and Iraqi Kurds, have a key interest in making al-Sharaa secure in his control of the entire territory. For President Recep Tayyip Erdogan, al-Sharaa has shown total obediance to date and knows full well that the heft and might of the Turkish military is just over the border if the new leader in Damascus were to go off piste. 

Banking on foreign investment

Damascus hopes to resolve its economic devastation through foreign investment, predominantly from wealthy Persian Gulf states and its biggest benefactor Turkey. To this end, Syrian authorities organised the first Syrian-Saudi investment forum in Damascus, where 44 deals worth $6bn were concluded. That same month, Syria signed an agreement with Dubai Ports World worth $800bn to modernise Syrian port infrastructure and logistics services.

In August, Damascus also signed investment memoranda with companies from Qatar, the UAE, Italy and Turkey totalling $14bn, followed by a separate package of energy deals between Syria and Saudi Arabia. Earlier, in May, Syrian authorities had concluded a $7bn investment agreement in the energy sector with Turkish, Qatari and American companies.

However, these sums are clearly insufficient for Syria's complete reconstruction. The World Bank estimates the country's economic damage from years of civil war at $216bn — ten times the country's nominal GDP. Of this, $75bn will be required to restore housing stock alone.

Fragile authority

Since Assad's overthrow, al-Sharaa's position in the state has strengthened, but his authority remains vulnerable. On one hand, there remains the risk of military mutiny from some field commanders dissatisfied with the distribution of political and economic resources. On the other, the Syrian leadership continues to reform its security structures, including with assistance from Russia and Turkey.

There are positive changes in strengthening state institutions. But the situation could change at any moment. To mitigate risks, not only large-scale investments are needed, but also reform of the judicial system, financial institutions.

Syria's new authorities have undoubtedly gained wide international recognition, partly through the lifting of most US and European sanctions and following the restoration of diplomatic contacts with all leading global actors — Russia, the US, China and the EU.

Moreover, al-Sharaa possesses considerable "revolutionary legitimacy" and continues to enjoy unlimited support from the overwhelming majority of Syrian Sunnis, where he again dressed in military fatigues to celebrate the one-year anniversary of seizing power at the Damascus Mosque.

On the other hand, Damascus has failed to win the trust of minorities and become a leader for all Syrians, especially the Alawites in Latakia, of which the Assads were a member.

The one glaring issue now for Syria is Israel, which continues to raid areas south of Damascus, only this week crossing into a local town and shooting children dead.  Israel claims it does this for its own security, but it has already crossed many boundaries, including going far past the 1967 border between the two territories. Israel also kneecapped the Syrian navy and air force, bombing whatever was left when Assad was overthrown. Israel's bombing forced al-Sharaa’s hand to keep the Russians around for at least some level of protection from Israel.

Breaking diplomatic isolation

Despite internal difficulties, Syria's new authorities have managed to break the country's diplomatic isolation. Over the past year, interim president al-Sharaa has held talks twice with US President Donald Trump, during which the latter promised to lift most American sanctions on Syria, known as the "Caesar Act", and remove the Syrian leader from the US international terrorist registry. Trump has repeatedly claimed that Turkey backs the al-Sharaa regime and is "their [the Turks'] problem". The American president has also claimed that the Turks have wanted Syria for thousands of years, among other comments indicating Trump's lack of understanding of Ottoman history.

Meanwhile, Damascus has conducted a series of negotiations with the Russian leadership. During talks between Russian Foreign Minister Sergei Lavrov and his Syrian counterpart Asaad al-Shaibani in Moscow in July, the parties agreed to conduct an "inventory" of all agreements between the two countries. During his first visit to the Russian capital, al-Sharaa promised to honour all previous agreements with Moscow regarding Russian military bases on Syrian territory. The Russian side, in turn, pledged to resume wheat and hydrocarbon supplies to the Arab republic.

Through strengthening Syria's international ties with major regional and extra-regional players, al-Sharaa is attempting to legitimise and consolidate his power within the state and with its immediate neighbours, even coming to terms with Shi’ite-controlled Iraq. Damascus hopes this approach will stabilise the domestic situation by securing regional boundaries and locking in the current security situation.

The biggest loser in the past year appears to be the Islamic Republic of Iran. It was always going to be the case. After having redirected billions of dollars (probably cash) from the state coffers in Tehran and the heft of the Islamic Revolutionary Guards Corps (IRGC) costs in propping up Assad, the entire security architecture collapsed overnight.

It’s unknown what the new Pezeshkian administration in Tehran actually thought when Assad fled, but considering the dire state of accounts currently, some close to the current system surmise that the leadership quietly breathed a sigh of relief as it could no longer afford the costs of Assad, who left the country in the dead of the night.