On the eve of the 2011 unrest, Syria was a fast-growing, lower-middle-income country with an average annual GDP growth of 4.3%. Six years into the uprising-turned devastating conflict Syria’s GDP is estimated to have contracted 63%, amounting to a cumulative loss of $226 billion, about four times the 2010 GDP, a World Bank report titled “The Toll of War: The Economic and Social Consequences of the Conflict in Syria” stated.
The war’s damage to Syria has cost billions of dollars in destroyed infrastructure and lost productivity but the more severe toll is on the society, which has been torn apart and disrupted.
The lead researcher of the report, senior World Bank economist Harun Onder, said the dislocation of the economic system, what he called the “supply chain,” and social trauma have had a much more damaging effects on the economy than the actual physical destruction and loss of lives.
“In conflict situations, there are lingering social and psychological complications going on,” Onder said. “This is not only important because of social sake but because the social aspect of the conflict has a huge economic impact that is the main drive of economic collapse.”
He contended that the damage done to Syria’s society as well as the systems and institutions it needs to function will be complicated to fix and will constitute a bigger challenge than rebuilding infrastructure.
“The economic collapse in Syria is mainly about the destruction [of] economic organisation or what we call economic disorganisation. These are the invisible effects. What we can safely say is that the visible effects of the destruction in Syria are only the tip of the iceberg,” Onder added in a public presentation of the report at the American University of Beirut.
In the report, the World Bank provided a detailed analysis of the physical damage caused by the war, the loss of lives and demographic dispersion and the effect on the economy.
While the casualty toll is estimated at 400,000-470,000, more than half of the pre-conflict population of 22 million, including some 5 million fleeing the country, has been forcibly displaced.
An estimated 27% of housing has been damaged or destroyed in cities where the conflict has been the most intense — Aleppo, Hama, Idlib, Daraa, Homs, Deir ez-Zor, Tadmur, Raqqa, Douma and Kobane.
The report underlined that the damage has been particularly high in the health sector, with about half of all medical facilities having been damaged and 16% destroyed. In Aleppo, the report stated that 14 hospitals and 57 medical centres had been destroyed as of December 2016; 35% of the city’s pre-conflict health infrastructure had been destroyed.
Medical personnel were not spared. Physicians for Human Rights (PHR) has documented attacks on 400 facilities and the death of 768 health personnel between 2011 and 2016. This led to the flight of health service providers and a hollowing out of the entire health system. At least 15,000 of Syria’s 30,000 physicians have left. Only 70 of the 6,000 physicians who were in Aleppo at the start of the conflict were there in 2014, PHR said.
The results are similar in educational facilities. Some 54% of schools in the surveyed cities were damaged and 10% were destroyed.
The report also said the Syrian economy suffers from severe twin deficits, depleted foreign exchange reserves and an unsustainably high public debt. Conflict-related disruptions and international sanctions reduced Syrian exports 92% from 2011-15.
The report stated that an average of 538,000 jobs a year were lost from 2010-15. Youth unemployment reached 78% in 2015, while prices of basic commodities such as rice and sugar increased more than twofold and prices of fuel oil rose up to ten times.
“Today, six in ten Syrians live in extreme poverty,” the report added.
The report also explored possible recovery paths based on different conflict end dates. “Our results show that if the war were to end this year, the economy would recover 41% of the gap with its pre-conflict level over the following four years but it will recover only 28% of the gap in four years if the conflict ends in its tenth year,” Onder said.
“The longer the conflict continues the more difficult it will be to recover from it,” he added.
Forum panellist Maha Yehya, director of the Carnegie Middle East Centre, stressed that the shape of a future political settlement in Syria will be key to facilitating its reconstruction and recovery.
“How can we talk about a post-conflict reconstruction when a political transition has not taken place and where we may have to give way to a regime that has been accused of war crimes against its own people?” Yehya asked.
She said the political settlement should be centred on refugees and guarantee the secure and free movement of the population in the country in order to ensure sustainable reconstruction and stabilisation.