by Eran Yashiv
Even with foreign aid, it would take the Syrian economy decades to recover to its previous level: the IMF estimates 20 years of reconstruction
While
even before the crisis, Syria was a poor economy, in the last five
years GDP per capita fell to less than a third of its pre-war level.
Approximately 11 percent of the population in Syria were killed or
injured in the course of the war. In addition, late 2015 estimates point
to about 3.1 million refugees, 1.2 million migrants, and 6.4 million
displaced persons within Syria. Even with foreign aid, it would take the
Syrian economy decades to recover to its previous level: the IMF
estimates 20 years of reconstruction. Overall, Syria no longer
represents the stable rival with which Israel contended both in war and
in peace negotiations, and such stability is unlikely to be the case
going forward. Having a weakened, fractured rival is not necessarily
good news, as the experience of Lebanon has shown. In particular, if one
hoped to resolve the Syria-Israel conflict, the prospects of a
reasonable solution have dimmed significantly. That, of course, has
repercussions for other elements of Israel’s relations with the Arab
world, especially with Lebanon.
The
photo of wounded five-year old Omran Daqneesh sitting in an ambulance
taken on August 18, 2016 in the Qaterji neighborhood of the northern
Syrian city of Aleppo shocked the world, less than a year after pictures
of the body of three-year old Alan Kurdi, which was found on a beach in
Bodrum, sparked a similar reaction. Media reports over recent days also
speak of no markets, no milk supply, no medications, and dwindling food
supplies in the eastern, rebel-held parts of Aleppo that are home to
275,000 inhabitants. Indeed, probably more than one million residents of
the greater Aleppo region suffer related difficulties. And while photos
and harsh reports make a far greater impression than dry facts, it is
important to reflect on the devastation of the Syrian economy wreaked by
the civil war and the strategic implications of this economic disaster.
A Syrian rescue worker carries
children in eastern Aleppo after regime aircraft reportedly dropped
explosive-packed barrel bombs on the area, August 27, 2016. Photo: Ameer
Alhalbi / AFP
Even worse is the plight of people.
The Syrian population fell from 21.8 million in 2010 to 20.2 million
people by the end of 2015; demographic data suggest that had the
conflict not taken place, the population would have reached 25.6
million. Estimates of conflict-related deaths range from 150,000 to
470,000, and by the end of 2015, the number of wounded was estimated at
1.88 million people. This means that approximately 11 percent of the
population inside Syria were killed or injured in the course of the war.
Additionally, late 2015 estimates point to about 3.1 million refugees,
1.2 million migrants, and 6.4 million displaced persons within Syria.
Currently 85 percent of the population is below the poverty line, and
the unemployment rate has reached 53 percent. In economic terms of
production and income, therefore, Syria has been extremely hard hit in
terms of workers, not just capital. Many have fled, and those who stayed
on are studying and working much less. There is an estimated loss of
over 16,000 school years at all educational levels. A recent UNICEF
report placed the loss in human capital at $10.5 billion from the loss
of education of Syrian children and youth.
The strategic implications of these
figures are overwhelming: even with foreign aid, it would take the
Syrian economy decades to recover to its previous level. The extent and
nature of aid will be one of the key factors in determining the duration
of reconstruction. Some damages look almost impossible to repair –
people who fled the country may never come back; years of schooling are
forever lost; and the damage to physical capital and human capital will
probably require hundreds of billions of dollars to rebuild. The IMF
cites two recent episodes of war and reconstruction in the region: "It
took Lebanon, which experienced 16 years of conflict, 20 years to catch
up to the GDP level it enjoyed before the war, while it took
Kuwait…seven years to regain its pre-war GDP level"1
following the Iraqi invasion and the Gulf War. With the damage in Syria
far greater and the abundance of its resources smaller, the IMF
estimates 20 years of reconstruction. This means that even under the
best of circumstances Syria will need a very long period of time to
regain the (poor) status it had before the civil war.
Yet another significant implication of
these assessments is that a unified Syria would be a much more
promising proposition than a fragmented one, at least in terms of
economic rebuilding. All the more so, as international aid will not be
so readily given to those parts of a fragmented Syria that are anathema
to the rest of the world, such as the Islamic State. At the same time,
the tremendous economic difficulties will engender a perpetual source of
conflict, making unity all the more difficult.
Consequently, Syria no longer
represents the stable rival with which Israel contended both in war and
in peace negotiations, and such stability is unlikely to be the case
going forward. Having a weakened, fractured rival is not necessarily
good news, as the experience of Lebanon has shown. In particular, if one
were to aim to resolve the Syria-Israel conflict, the prospects of a
reasonable solution have dimmed significantly. That, of course, has
repercussions for other elements of Israel’s relations with the Arab
world, especially with Lebanon.
_________________________________
1“Syria’s Conflict Economy,” IMF Working Paper, WP/16/123, June 2016.
Eran Yashiv
Source: http://www.inss.org.il/index.aspx?id=4538&articleid=12274
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