World Bank: More than reconstruction, post-conflict Syria will need development aid

Harun Onder [L] and Saroj Kumar Jha [Georgi Gotev]

The economic disorganisation of Syrian society, lost connectivity and annihilation of business networks has an impact on GDP 20 times bigger than the destruction of buildings, World Bank officials have told EURACTIV.com.

A 148-page report on Syria by the World Bank, titled “The toll of the economic and social consequences of the conflict in Syria,” aims to provide a more complete picture of the conflict’s impact on the country’s economy.

EURACTIV spoke to the authors of the report, published in July, which looks at the country’s wider population, economy and institutions in addition to the damage done to infrastructure.

The war in Syria is estimated to have caused more than 400,000 deaths, forcing over half the population to flee their homes and seek safety within or outside the country, the report says.

Estimates show that about 6 out of every 10 Syrians now live in extreme poverty because of the war. In the first 4 years after the onset of the conflict, approximately 538,000 jobs were destroyed annually, with the result that 6.1 million Syrians are neither working, nor in any form of school or training.

Unemployment among young people reached 78% in 2015. The long-term consequences will be a collective loss of human capital leading to a shortage of skills in Syria. In the short-term many, especially young men, are joining groups fighting in the war simply to survive.

Saroj Kumar Jha, Regional Director at the World Bank’s Middle East Department covering Syria, Iran, Iraq, Jordan and Lebanon, told EURACTIV there was “more and more evidence that the drivers of protracted conflicts are essentially development-related”.

The physical damage, visible thanks to media reports, is a very small part of the economic damage the World Bank has identified, the official said. Lack of trust, lack of mobility, or the complete destruction of supply chains need to receive a lot more attention in the reconstruction process, he stressed.

“If the reconstruction focuses on rebuilding the physical infrastructure, the recovery process is going to be extremely slow”, Jha said, adding that instead, a development-inspired effort which would help mobilise more private investments and create jobs, would be more successful.

Referring to Syria, Lebanon, Jordan and Iraq, Jha argued in favour of transforming “the conflict-sensitive lands” into a “development space”. This involves rebuilding social trust, by supporting inclusive institutions, and creating jobs for everyone by adopting a more bottom-up approach to development policy.

There is also a need for more medium and long-term development support, particularly in education, health and livelihood support for forcibly displaced people, particularly in Lebanon and Jordan, which are hosting more than 3 million displaced people from Syria, the official said.

The official said the World Bank Group is supporting Lebanon and Jordan create opportunities for refugees as well as the host communities by supporting the establishment of special economic zones and attracting more private investment with economic reforms.

‘Invisible effects’

Harun Onder, Senior Economist at the World Bank and main author of the report, told EURACTIV  that the numbers of deaths, of displaced persons and of destroyed jobs was only “the tip of the iceberg”.

What is less visible, he said, is the economic disorganisation of Syrian society, the lost connectivity, and the destruction of business networks.

“We compared these invisible effects of the conflict, and we found that they have on average 20 times more effect on the Syrian GDP than the destruction of the buildings.”, Onder said.

“It also tells you, if you were in the country tomorrow, once the conditions permit, how you should approach the reconstruction process”, he added.

Asked whether European politicians realised the magnitude of the Syrian conflict, Jha eluded the question, saying the evidence in the report were useful for all parties involved in the conflict-resolution process. He voiced optimism that the crisis will eventually be solved, stressing the importance of taking the right approach in the international recovery effort.

Asked what role the EU could play, the World Bank official said it could offer a lot in the field of reconstruction, but also in conflict resolution.

“On the EU’s broader political role in conflict resolution, the Union has played a very central role and I can only confirm that we value the EU’s role on the humanitarian, diplomatic and developmental space”, the  World Bank official said.

Lobbying

The prospect of reconciliation has triggered keen interest from governments and firms looking to profit from Syria’s massive reconstruction needs.

The Assad regime’s closest allies, Russia and Iran, have been the most prominent beneficiaries of the Syria reconstruction gold rush, with China not far behind.

Some also warn that a possible “Marshall Plan” for Syria will end up enriching the regime of Bashar al-Assad.

This is why experts from the Brookings think-tank have proposed a set of rules, which can be summarised as follows: “Bypass Assad”, “Go Local”, “Go small” and “Go Slow”.