WASHINGTON, April 12, 2016 – Development institutions can take immediate actions inside and outside Syria to help make peace happen today, according to a new World Bank report released today. With the battles still ongoing, the Middle East and North Africa’s short-term prospects remain grim as the humanitarian and economic situation in the war-torn countries keeps deteriorating.
The report provides an economic outlook for the Middle East and North Africa (MENA), predicting that regional GDP growth will average 3 percent for 2016. Due to a combination of civil wars and refugee inflows, terrorist attacks, cheap oil, and a subdued global economic recovery, prospects for faster growth are slim. Civil wars have severely harmed the economies of Syria, Libya, Yemen, and Iraq, and have had spillover effects on the economies of Lebanon and Jordan. MENA’s oil-importing countries will see their growth slow down, despite low oil prices, because of persistent security concerns and slow activity in tourism and remittance inflows. Growth in oil exporting countries, including the six GCC countries, will be affected by persistently low oil prices.
“While the short-term outlook remains ‘cautiously pessimistic’, there is an opportunity to start addressing the main source of the slowdown—the civil war in Syria—by an inclusive reconstruction strategy,” said Shanta Devarajan, World Bank Chief Economist of the MENA Region.
According to the report, peace and reconstruction are two sides of the same coin and a reconstruction strategy for Syria—the most war-ravaged country in the region—could help foster a sustainable peace.
As Syria enters its sixth year of civil war, the conflict has claimed upwards of 470,000 lives, pushed half of the Syrian population out of their homes, and destroyed $70-80 billion in capital stock by mid-2014. Inside the country, the situation has dramatically worsened over the past year, particularly in contested areas. The need for more mitigation and resilience projects inside the country becomes acute. The lack of basic services such as health, water, sanitation, electricity and education, has had devastating humanitarian consequences.
The World Bank Group’s latest MENA Economic Monitor argues that given the persistent impact of the civil war on the Syrian society, and while full-scale reconstruction may have to wait for peace before it can start, development institutions can commit to support an ambitious and inclusive reconstruction strategy that might in itself foster peace. The report illustrates that a more audacious development agenda can help bring about relief and appeasement in the short-term, and stability in the long-term.
The report underscores the need to engage more actively in all sectors in Syria through partnerships with neutral and well-established non-state actors. By securing grant funding and technical assistance, international organizations can provide needed relief in the country while generating and disseminating knowledge. This would allow the international community to gradually scale up its assistance once peace is reached. Short term interventions that can have considerable gains in the context of a sustained ceasefire agreement include providing jobs and economic empowerment now, especially for female-headed households. Training health workers will fill the gap of the exodus of the qualified in the short-term, and provide incentives for talented medical providers to return to Syria in the longer term.
The report calls on development organizations to champion a comprehensive and inclusive reconstruction plan. “Rebuilding a stable Syria also means addressing the underlying causes of civil war, notably regional disparities and inequitable resource distribution,” said Quy-Toan Do, World Bank Senior Economist and co-author of the report. “The reconstruction of the country cannot be solely driven by infrastructure projects; it has to deliver inclusive institutions that are necessary for rebuilding trust and mitigating social tensions.”
