By March 2014, about 6.5 million people were internally displaced, and 2.5 million Syrian refugees were registered with the United Nations High Commission for Refugees in neighboring countries. The death toll was estimated to have exceeded 130,000, with many 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 had increased. Polio, which had been eradicated in Syria, had reappeared in several governorates, the Ministry of Health diagnosing 89 cases across the country by the end of 2013. Nutrition is another great concern in many parts of the country; informal reports show that what food there is in many areas is of poor nutritional quality, while in other areas food is rarely available at all.
According to the Ministry of Education about 4,000 schools have been destroyed or been used to shelter Internally Displaced Persons since the beginning of the conflict. The vast majority of affected schools are located in the conflict zones of Aleppo, Idlib, Dara'a, and Rural Damascus. School dropout rates were estimated at 52% by the end of 2013. The overall poverty rate had reached 75% by the end of 2013, with large differences across governorates. Extreme poverty is 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 Syria’s macroeconomic performance.
Despite accelerating over the last decade, economic growth had not, however, 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. Their impact had been particularly severe in the east, spurring internal migration to larger regional cities and the Damascus suburbs, and fueling social and political discontent.
Syria’s GDP had remained dependent on the oil and agriculture sectors, themselves subject to fluctuating oil prices and rainfall. Oil exports, exports of services, and foreign transfers of income and remittances, were the main sources of foreign earnings, sources now being seriously curtailed by the crisis. Over the short and medium term, Syria’s recovery will ultimately depend on the end-game of the ongoing conflict and the scope of political and economic reform that follows.
Once the political 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. In the medium to long term, Syria would still need to push its unfinished structural reform agenda, with the twin goals of creating the conditions for strong economic growth by developing non-oil sectors to cope with the decline in oil production and the need for job creation, and maintaining fiscal sustainability while providing social protection to a growing number of young unemployed, and to regions affected by climate change.
In order to achieve these goals, Syria will need to further diversify its economy and improve private sector development and exports. Syria will also need to increase its productivity by raising the skills of its labor force and improving its technological base.
Other challenges would include the quality of the education system to provide the young labor force with economically relevant skills. Syrian workers appear uncompetitive by regional standards. Major upgrading of the quality of the human resource base would be required to take up the challenge of opening up the economy. This includes upgrading the quality of education in schools, universities and vocational training systems, and matching them with capable civil servants to manage the transition process.
Lastly, in line with many Middle Eastern and North African countries, Syria also faces major environmental and natural resources challenges. Most water basins are under stress and water deficits are expected to worsen due to unsustainable water usage in agriculture and increases in urban water demand. Climate change has also affected agriculture production, adversely affecting the government’s food security target.
Last Updated: Mar 20, 2014