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