In addition to the devastating magnitude of human suffering, the last four years of instability in the Middle East and North Africa have taken a massive economic toll that threatens the long-term prospects of the region. Going forward, any potential political solutions will have to be accompanied by the substantial funding needed to consolidate peace and pave the path back to stability.
History has demonstrated that the international community can come together to address such a critical challenge. “The Bretton Woods conference for the reconstruction of Europe began in 1944, a full year before the Second World War ended,” said Hafez Ghanem, World Bank Vice President for the Middle East and North Africa. “If you want to reconstruct Syria, Yemen, Libya and Iraq, you do not wait until the war is over. You start now.”
While damage assessments are being constantly updated, there is a clear sense of the anticipated costs. In Syria alone, it is estimated that $170 billion will be needed for reconstruction. Across the region – from Libya, to Yemen, to Gaza, to Iraq and all other countries affected by conflict and instability – the costs are staggering.
The ongoing conflicts have also placed an immense strain on neighboring countries, stoking social and economic tensions in peaceful, albeit fragile countries. Syria’s neighbors have kept their borders open throughout the fighting, with Lebanon providing sanctuary for over one million refugees, and Jordan for over 600,000. The impact on Lebanon, with a population of less than five million, is the equivalent of the entire population of Mexico seeking refuge in the United States. The rapid surge in population has pushed up government expenditures, at the same time as conflict has caused a significant loss of revenues due to interrupted trade and investment. This represents an economic crisis, and with humanitarian aid stretched thin, both Jordan and Lebanon have been struggling to cover the shortfall between lost revenues and increased responsibilities.
Even countries in the region that are not hosting refugees are in urgent need of funds to kick-start growth. Instability has caused a regional economic slowdown, which, among other effects, has perpetuated widespread and chronic youth unemployment, a critical factor that led to the Arab Spring.
The stream of desperate refugees trying to reach Europe has driven home the fact that peace and stability in the Middle East and North Africa is a global concern, and a global responsibility. The question therefore is how the international community will provide the financing needed to stabilize countries across the region, and create the conditions for recovery and reconstruction. Grant resources are scarce, and the needs far outstrip the resources of donor countries and international development organizations alike. Potential investors in the region are also wary due to the pervasive instability.