Now into its seventh year, the violent conflict in Syria continues to take a heavy toll on the life of Syrian people and on the Syrian economy. The death toll in Syria directly related to the conflict as of early 2016 is estimated between 400,000 (UN, Apr 2016) and 470,000 (Syrian Center for Policy Research, Feb 2016), with many more injured, and lives upheaved. More than 6.1 million people, including 2.5 million children, are internally displaced and 5.6 million are officially registered as refugees (UNHCR, September 2018).
The social and economic impacts of the conflict are also large—and growing. The lack of sustained access to health care, education, housing, and food have exacerbated the impact of the conflict and pushed millions of people into unemployment and poverty.
In addition, a severe decline in oil receipts and disruptions of trade has placed even more pressure on Syria’s external balances, resulting in the rapid depletion of its international reserves.
Assessing the Impact of the Syrian Crisis
Prior to the conflict, the World Bank Group provided support to Syria through technical assistance and advisory services on private sector development, human development, social protection and environmental sustainability.
At the onset of the conflict in 2011, however, all Bank operational activity and missions to Syria were halted. However, the Bank monitors the impact of the conflict on the Syrian people and the economy. It also dialogues regularly with the international community working on Syria in an effort to make sure it is ready to support post-agreement recovery efforts. In 2017, the Bank produced two reports on the impact of the Syrian conflict: (i) a Damage Assessment (DA) of Aleppo, Idlib, and Hama, and (ii) an Economic and Social Impact Analysis (ESIA) of the conflict on Syria, called the Toll of War.
The first, the DA, used satellite imagery, social media analytics, and public and partner data to assess the amount of damage caused by the conflict across six public sectors in three urban centers. Building on lessons from other conflict-affected countries, it used an evidence-based approach to: quantify the amount of physical damage caused to key infrastructure; assess the impact of the conflict on service delivery in a representative set of Syrian cities; and to examine trends in local resilience patterns.
The Toll of War report assessed the economic and social impact of the conflict Syria-wide, including its effects on physical and human capital, as well as its effects on the aggregate well-being of Syrians. The study examines the drivers of these impacts—physical destruction, losses in human lives, demographic mobility, and economic disorganization—to assess the relative importance of the impact on each. It found that:
- The human toll of the conflict (casualties and forced displacement) and damage to productive factors and economic activity has been extensive, damaging capital stock (e.g. about one-third of housing stock and one half of health and education facilities damaged or destroyed), while disrupting economic activity. From 2011 to 2016, cumulative GDP loss is estimated at $226 billion.
- Disruptions in economic organization are the most important driver of the economic impact, superseding physical damage. Conflict has disrupted economic activity by diminishing economic connectivity, reducing incentives to pursue productive work, and disconnecting networks and supply chains. Cumulative GDP loss due to disruptions in economic organization exceeds that of physical destruction by a factor of 20. This contrast is explained by how the economy reacts to different shocks. A “capital destruction only” is like some natural disasters: in a well-functioning economy, its effects on investment are limited (-22% in simulations) as capital can be rapidly rebuilt and repercussions contained. In comparison, economic disorganization reduces investments significantly (-80% in simulations); and effects propagated over time.
- The longer the conflict lasts, the more difficult recovery will be, as effects of economic deterioration become more persistent over time. Should conflict end in its 6th year, GDP is estimated to recoup about 41% of the gap with its pre-conflict level within 4 years, with cumulated GDP losses 7.6 times 2010 GDP by the 20th year. In comparison, GDP recoups only 28% of the gap in 4 years if it ends in its 10th year, with cumulated GDP losses 13.2 times 2010 GDP by the 20th year. Simulations also show that outmigration could double between the 6th and 20th year of the conflict.
The assessment and analysis together underscore the Bank’s ongoing dialogue with the UN, the EU, and other development partners, and provide an important understanding of Syria’s economy, infrastructure, service delivery, and institutions. The assessment and analysis do not provide, however, a picture of the reconstruction that will be needed once the conflicts in Syria stop.
Supporting Syrian Refugees and Host Communities
The impact of the Syrian crisis has been significant in Lebanon and Jordan, where conservative estimates put the proportion of Syrian refugees at 25% and 10% of the countries’ populations respectively. The Bank’s operational response in these countries has included: (i) analytical work on the social and economic impact of the influx; (ii) the rapid preparation of projects to assist hosting communities and refugees; and (iii) the mobilization of substantial grant funding from donor partners to support the host countries.
In collaboration with a wide range of partners and international financial institutions, the Bank led the establishment of the Global Concessional Financing Facility (GCFF), a mechanism that offers middle-income countries affected by an influx of refugees more favorable financing for development needs by combining grants from donors with loans from Multilateral Development Banks (MDBs).
To date, the Bank has supported around US$3 billion of projects in Jordan and Lebanon, mostly on concessional terms, directly addressing the impact of the Syrian refugee crisis and to help refugees and host communities. Such projects are addressing jobs and economic opportunities, health, education, emergency services and social resilience, and infrastructure.
The Bank also manages the Lebanon Syria Crisis Trust Fund (LSCTF), established in 2014 to provide grant financing to projects that mitigate the impact of the Syrian crisis. The LCSTF is funded by the UK, France, Norway, Finland, the Netherlands, Sweden, Switzerland, and Denmark, and has supported emergency projects including education, health, and municipal services.
Last Updated: Oct 11, 2018