The Jazira Region is a major wheat and cotton producer and has a considerable oil industry. The Euphrates Region suffered most destruction of the three regions and has huge challenges in reconstruction, and has recently seen some greenhouse agriculture construction. The Afrin Region has had a traditional specialization on olive oil including Aleppo soap made from it, and had drawn much industrial production from the nearby city of Aleppo due to the fighting in Aleppo city from 2012-2016. Price controls are managed by local committees, which can set the price of basic goods such as food and medical goods.
It has been theorized that the Assad government had deliberately underdeveloped parts of Northern Syria for the purposes of Arabization of the region as well as making secession attempts less likely. During the Syrian Civil War, the infrastructure of the region has on average experienced less destruction than other parts of Syria. In May 2016, Ahmed Yousef, head of the Economic Body and chairman of Afrin University, stated that at the time, the economic output of the region (including agriculture, industry and oil) accounted for about 55% of Syria’s gross domestic product. In 2014, the Syrian government was still paying some state employees, but fewer than before. The administration of the region has however stated that “none of our projects are financed by the regime”.
There were at first no direct or indirect taxes on people or businesses in the region; the administration raised money mainly through tariffs and selling oil and other natural resources. However, in July 2017, it was reported that the administration in the Jazira Region had started to collect income tax to provide for public services in the region. In May 2016, The Wall Street Journal reported that traders in Syria experience the region as “the one place where they aren’t forced to pay bribes.”
The main sources of revenue for the autonomous region have been presented as: 1. Income from public properties such as grain silos as well as from oil and gas in the Jazira Region, 2. Income from local taxation and customs fees taken at the border crossings, 3. Income from service delivery, 4. Finances sent from expats in Iraq and Turkey and 5. Local donations. In 2015 the autonomous administration of the region shared information regarding the region’s finances in which the total amount of revenue for the year of 2014 for the autonomous administration was about 3 billion Syrian Pounds (≈5.8 million USD) from which 50% was spent on “self-defense and protection”, 18% for the Jazira Canton (now Jazira Region), 8.5% for the Kobani Canton (now Euphrates Region), 8.5% for the Afrin Canton (now Afrin Region), 15% for the “Internal Committee” and any remainder as a reserve for use in the following year.
External economic relations
Oil and food production is substantial, so they are important exports. Agricultural products include sheep, grain and cotton. Important imports are consumer goods and auto parts. Trade with Turkey and access to humanitarian and military aid is difficult due to a blockade by Turkey. Turkey does not allow businesspeople or goods to cross its border. The blockade from adjacent territories held by Turkey and ISIL, and partially also the KRG, temporarily caused heavy distortions of relative prices in Jazira Region and Euphrates Region (while separate, Afrin Region borders government-controlled territory since February 2016); for example in Jazira Region and Euphrates Region, through 2016 petrol cost only half as much as bottled water.
The Semalka Border Crossing with Iraqi Kurdistan had been intermittently closed by the Kurdistan Regional Government (KRG), but has been open permanently since June 2016, and along with the establishment of a corridor to Syrian government controlled territory in April 2017, economic exchange has increasingly normalized. Further, in May 2017 in northern Iraq, the Popular Mobilization Forces fighting ISIL cleared a corridor connecting the autonomous region and Iraqi government-controlled territory.
Economy policy framework
The autonomous region is ruled by a coalition which bases its policy ambitions to a large extent on the libertarian socialist ideology of Abdullah Öcalan and have been described as pursuing a model of economy that blends co-operative and private enterprise. In 2012, the PYD launched what it called the “Social Economy Plan”, later renamed the “People’s Economy Plan” (PEP). Private property and entrepreneurship are protected under the principle of “ownership by use”. Dr. Dara Kurdaxi, a regional official, has stated: “The method in Rojava is not so much against private property, but rather has the goal of putting private property in the service of all the peoples who live in Rojava.” Communes and co-operatives have been established to provide essentials. Co-operatives account for a large proportion of agricultural production and are active in construction, factories, energy production, livestock, pistachio and roasted seeds, and public markets. Several hundred instances of collective farming have occurred across towns and villages in the region, with communes consisting of approximately 20–35 people. According to the region’s “Ministry of Economics”, approximately three quarters of all property has been placed under community ownership and a third of production has been transferred to direct management by workers’ councils.