Aided by a campaign of military airstrikes conducted by a US-led coalition that includes the Gulf Arab states, Syrian Kurdish fighters successfully repelled a months-long battle for the town of Kobanê, the first significant military setback for ISIL within Syria. However, the militants retain their firm hold on large areas of territory elsewhere in the country, a fact that raises questions about the effectiveness of the international strategy.

Significantly, the air campaign has done nothing to bolster the position of secular western-backed rebels that are fighting—and losing—a two-front battle against ISIL and the Syrian military forces loyal to President Bashar al-Assad, while alternating between cooperation and armed clashes with the Al Qaeda-linked Al Nusra Front. The marginalization of the once-dominant FSA among the rebel groups has reinforced the international community’s reservations about assisting internal efforts to remove Assad, which, at this point, is much more likely to result in Syria’s fragmentation into warring tribal- and sectarian-based mini-states than to create an opportunity to initiate a transition to democratic rule.

Under the circumstances, it is difficult to see how the civil war might be ended anytime soon, whether by means of a negotiated agreement or a decisive military victory. With the FSA becoming less of a military factor and ISIL pursuing the stated goal of complete victory, there is no realistic basis for pursuing peace negotiations. Likewise, given the degree to which the rebel cause is now dominated by radical Islamist groups, such international intervention as does occur on the military level will most likely be aimed at ensuring that neither side scores a clear victory, the effect of which will be to prolong the current stalemate.

The Syrian economy will continue to contract in 2015, suffering from the loss of revenue, persistent high inflation, and severely diminished export capacity, as long as much of the northern part of the country remains in rebel hands. External sources of funding, chiefly from Iran, will be essential to implementing a 2015 budget that projects an increase of state spending by 12%, to around $9.1 billion. Under the draft budget presented to the legislature in November, the majority of the funds will be allocated to social welfare spending which will increase by $2.2 billion to $5.8 billion. The budget also earmarks funds for increases in the wages in the military and security services, reflecting the priorities in Syria’s war economy.