The proliferation of the violent conflict in Syria over the past six years has taken a heavy toll on life of the Syrian people and is resulting in a large outflow of refugees. The estimated death toll has exceeded 250,000 people (as per the UN); a report by the Syrian Center for Policy Research (SCPR) put the death toll at 470,000, with 1.2 million injured and many more displaced.

In addition, 1.1 million asylum applications were filed by Syrians in Europe from 2011 through June 2016. The Refugee Protection and humanitarian program (UNHCR) estimated that there were 4.8 million Syrian refugees by June 2016 in the host countries alone (Egypt, Iraq, Jordan, Lebanon and Turkey). The latest UNHCR statistics reveal that half of the Syrian population has been forcibly displaced, with an estimated 7.6 million internally displaced persons (IDPs) and 4.8 million registered refugees (UNHCR, 2016). Lack of access to health care and scarcity of medicine have led to a catastrophic health situation. Poor food availability and quality and successive cuts in subsidies on bread have exacerbated nutritional deprivation. An estimated 25 percent of schools are not operational and there is a significant shortage of teachers.

A World Bank remote in-conflict assessment on damage to infrastructure in six sectors in Aleppo, Dar’a, Hama, Homs, Idlib, and Latakia as of December 2014 estimated that the conflict significantly damaged public and private assets in the order of $3.7 to 4.5 billion. Damages caused during 2015 were more severe than previous years and the latest update of the damage assessment have increased to between US$5.9-7.3 billion, with Aleppo accounting for almost 60 percent of the damage costs. Latakia is the least affected city; however, the conflict’s impact on the city is manifested in the increased pressure on infrastructure and services from the population increase from Internally Displaced Persons (IDPs). Among sectors, housing was assessed to be by far the most affected sector. These figures indicate only the damages to the value of replacement at pre-conflict prices in the six cities and the future recovery and reconstruction needs would be many fold more.

Millions of people have been pushed into unemployment and poverty. The SCPR estimates that over 60 percent of the labor force (about 3.5 million) is unemployed, with some 3 million having lost their jobs as a result of the conflict. While, the World Bank did not have poverty estimates since 2007, SCPR estimates the overall poverty rate at 83 percent in 2014 (compared to 12.4 percent in 2007). Many Syrians, including children, have had to find jobs in the informal sector to offset the loss of income.  

It is estimated that two-thirds of Syrians are living in extreme poverty, unable to meet basic food and non-food needs. The main reasons for poverty are loss of property and jobs, loss of access to public services, including health and clean water, and rising food prices. Poverty rates are highest in governorates that have been most affected by the conflict and that were historically the poorest in the country.  

The economic impact of the conflict is difficult to estimate precisely given limited data but is large and growing. Syria’s GDP is estimated to have contracted by an average of 15.7 percent for the period (2011-14) and is expected to decline further by 12 percent in 2015 and 4 percent in 2016. The decline in GDP growth was in part attributed to a sharp decline in oil production, down from 368,000 barrels per day in 2010 to an estimated 40,000 barrels per day in 2015 and 2016. After increasing by nearly 90 percent in 2013, average inflation increased by 29 percent in 2014. CPI inflation is estimated to increase by 30 and 25 percent in 2015 and 2016 because of continued trade disruption, shortages and a sharp depreciation of the Syrian pound.     

The severe decline in oil receipts since the second half of 2012 and disruptions of trade due to the conflict put pressure on the balance of payments and exchange rate. Revenues from oil exports decreased from $4.7 billion in 2011 to an estimated $0.22 billion in 2014, and are estimated to decline further to $0.14 billion in 2015 and 2016. Therefore, the current account balance is estimated to continue its trend and reach a deficit of 8 and 16 percent of GDP in 2015 and 2016 respectively. As a result of the civil war, it is estimated that total international reserves have significantly declined. Depressed export revenue caused by the impact of the conflict and declining international reserves have caused a significant depreciation of the Syrian pound from 47 pounds per USD in 2010 to an estimated 154 pounds per USD at end-2014.

Once the situation stabilizes, Syria will have to grapple with a multitude of urgent economic and social challenges. It will also need to support the return of internally displaced people and refugees in neighboring countries, rebuild the country’s infrastructure, enhance the provision of public services including health and education, and rebuild the social fabric of the country.

Last Updated: Oct 01, 2016

Prior to the start of the crisis, the Bank was providing support to Syria through technical assistance, advisory services and policy advice on private sector development, human development, social protection and environmental sustainability. Due to the deterioration of the security situation in Syria, all World Bank operational activity and missions to Syria were halted in early 2011.  

The Bank’s response is focused on addressing the impact of the Syrian conflict on neighboring countries, and in particular, Lebanon and Jordan. As part of this effort, the Bank is carrying out multi-country surveys on Syrian refugees and host communities in Lebanon, Jordan and Iraq, and has worked closely with the UNHCR to help analyze their rich database on refugees. The Bank is also carrying out a remote, in-conflict damage assessment in six sectors and six cities.

In Lebanon, the Bank set up a Multi-Donor Trust Fund to help mitigate the impact of the Syrian crisis on that country.  Contributions to date total $75 million going towards the provision of health, education and municipal services in communities hosting refugees. The Bank, together with the UN, Islamic Development Bank, Multilateral Development Banks and Supporting Countries, has recently established a Concessional Financing Facility to provide funding from multilateral development banks for Lebanon and Jordan at concessional levels to help them address the pressures and impact of hosting an influx of refugees. To mitigate the impact of the Syrian conflict on poor Lebanese, the Bank is also supporting scaling up of the Government’s National Poverty Targeting Program to reach those Lebanese affected by the Syrian crisis and all Lebanese households under the extreme poverty line. In parallel, the World Bank is scaling up financing for much needed education and infrastructure investments, including addressing the impact of the influx of Syrian refugees.

For Jordan, the Bank provided rapid, financial assistance of $150 million to help mitigate the adverse impact of the Syrian crisis on Jordan's economy, in July 2013. In October 2013, the Bank and development partners launched a project to help Jordanian municipalities and host communities address immediate service delivery impacts of Syrian refugee inflows (project scale up under preparation). A $300m program for results operation on concessional terms will promote Economic Opportunities for Jordanians and Syrian refugees. A Development Policy Loan for US$250 million is being prepared to support reforms in the energy and water sectors.

Iraq’s fight against ISIS and war on terrorism has had a high cost for Iraq resulting in 3.4 million IDPs in addition to the influx of 250,000 Syrian refugees, mainly residing in the Kurdistan region of Iraq, in addition to the economic and financial costs. The IDPs and refugees are adding to the fiscal difficulties Iraq is facing as result of the decline in the oil prices. Oil is the main source of revenue for the country.  The Iraqi economy is facing severe and pressing challenges: the decline in global oil prices and the financing needs to fight the ISIS insurgency have contributed to a sharp deterioration of economic activity, public finances and the balance of payments. Faced with large shocks of a sudden and unknown duration, the government’s challenges are to maintain macroeconomic stability, undertake structural reforms to improve the delivery of public services, and reconstruct core physical infrastructure, especially in liberated areas, amid ever-present risk of conflict relapse.

In Iraq, the Syrian Refugees are in the Kurdistan Region. In response to a request from the Kurdistan Regional Government (KRG), the Bank prepared a rapid Economic and Social Impact Assessment (ESIA) of Internally Displaced Persons and the Syrian refugees to assist the KRG to quantify the impact on the local economy.
In parallel, the Government of Iraq requested the Bank to support reconstruction in areas liberated from ISIS.  In response, the Bank developed an Emergency Operation for Development to provide funding for reconstruction efforts in seven cities in Diyala and Saladin. This project is currently under implementation.

The WBG also provided a US$1.2 billion development policy financing loan to support Iraq as the country faces fiscal pressures from the fall in oil prices and a mounting humanitarian crisis.

Last Updated: Oct 01, 2016