Syria has witnessed terrible violence since 2011, when a movement of popular protest in the city of Dera’a in March of that year sparked the start of the conflict. Unrest spread quickly throughout Syria, and continued to shift and escalate into a violent crisis with tragic human and socioeconomic consequences.
By August 2014, almost half of the Syrian population had been forced to leave their homes. Around 6.5 million people were internally displaced, and 3 million Syrian refugees were registered with the United Nations High Commission for Refugees in neighboring countries. The death toll is estimated to have exceeded 190,000, with many more injured or held in custody.
A lack of access to health care and the scarcity of medications have led to catastrophic health situations in several regions in Syria. Influenza-like illnesses, diarrhea among children under five, hepatitis A, and leishmaniasis have increased. Polio, which had been eradicated in Syria, has reappeared in several governorates. Nutrition is another great concern in many parts of the country; informal reports show that food in many areas is of poor nutritious quality, while other areas are suffering food shortages.
According to the Ministry of Education about 3600 schools are unusable due to destruction or to the fact that they have been used to shelter Internally Displaced Persons. The vast majority of affected schools are located in the conflict zones of Aleppo, Idlib, Dara'a, and Rural Damascus. School non-attendance rate among school age children was estimated at 52% by the end of 2013. The overall poverty rate reached 75% by the end of 2013, with large differences across governorates while extreme poverty was estimated at 54% of Syria’s population.
Prior to the crisis, Syria’s economic reform efforts had helped strengthen growth, although external and domestic shocks, and particularly the impact of the global financial crisis and prolonged droughts, had adversely affected the country’s macroeconomic performance.
Despite accelerating economic growth over the last decade, this growth had not been inclusive. It had not led to significant job creation or to poverty reduction. Rural society became increasingly marginalized and suffered from severe shocks related to both economic transition and drought. This was especially severe in the east, consequently spurring internal migration to larger regional cities and the Damascus suburbs.
Syria’s GDP had remained dependent on the oil and agriculture sectors, themselves subject to fluctuating oil prices and rainfall. The main sources of foreign earnings were oil exports, exports of services, and foreign transfers of income and remittances; however these sources are now being seriously curtailed by the crisis. Over the short and medium term, Syria’s recovery will ultimately depend on the end of the ongoing conflict and the scope of political and economic reform that follows.
Once the situation stabilizes, Syria will have to grapple with immediate economic challenges including output and employment collapse in the trade sector, accelerated exchange rate depreciation in the parallel market, the hoarding of hard foreign currency, likely foreign exchange reserve losses, rising inflation, and legal and financial issues associated with frozen assets. Syria 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.
In the medium to long term, Syria would still need to push its unfinished structural reform agenda, with the goal of creating the conditions for strong economic growth and job creation. To meet that goal it needs todevelop its non-oil sectors and maintaining fiscal sustainability while at the same time providing social protection to a growing number of young unemployed Syrians, and to regions affected by climate change.
Last Updated: Sep 30, 2014