The Toll of War: Economic and Social Impact Analysis (ESIA) of the Conflict in Syria- Key Facts

What is the goal of the Syria ESIA? The Syria ESIA aims to provide a more complete picture of the impact of the conflict by studying its effect on the country’s population, economy and institutions in addition to the damage to infrastructure. While a comprehensive analysis is not possible during an active conflict, the report focuses on four key areas for the period 2011 to early-2017: (i) damage to property and infrastructure, (ii) loss of lives and the movement of people, (iii) economic outcomes, and (iv) human development outcomes. To overcome the lack of access to conflict zones, the assessment of physical damage relied on satellite imagery, cross checked where possible with social media postings from the territory or other available information. The impact on ten cities and six sectors was analyzed, with the results extrapolated to eight governorates by using a conflict intensity and asset base comparison technique. Information from partner agencies was also used to assess the movement of people due to conflict, and economic and human development outcomes. These cumulative assessments were compared with a projection, based on statistical methods, of how Syria would have developed in the absence of conflict, to arrive at an estimate of the social and economic impacts of the now 6-year-old war. The report does not focus on reconstruction, nor does it offer an estimate of the costs of reconstruction, but rather offers as comprehensive an analysis as possible of what has happened to Syria across multiple dimensions, and the expected consequences of ongoing conflict.  How is the ESIA different from other studies of the conflict in Syria? With the use of economic models, the Syria ESIA provides a detailed analysis of a broad range of individual effects, from the rise in poverty to changes in agriculture, while also synthesizing the various analyses into a comprehensive assessment of the damage inflicted by the war. This approach allowed the report to compare the distinct roles played by the level of casualties, physical destruction and disruptions to the economic system in determining the overall impact of the conflict. Economic models were also used to study impacts which either cannot be observed or for which data does not yet exist, such as the effect of migration on economic outcomes or the impact of damages after the conflict has ended. What are the key findings of the Syria ESIA? The report features numerous findings as part of its stocktaking assessment. These include the following: • The war in Syria has been estimated to have caused more than 400,000 deaths and forced over half the population to flee their homes and seek safety either within or outside the country’s border, leading to significant deterioration in the quality of life of Syrian civilians. 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 thousand 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 percent in 2015. The long-term consequences of this inactivity 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.  • The urban-centered nature of the conflict has aggravated physical damages, particularly in the health sector, as medical facilities were specifically targeted. Estimates show that about 27 percent of all housing units have been destroyed or partially damaged across the cities covered in this study. About half of all medical facilities have been partially damaged, and about 16 percent of them destroyed in the same area. This damage to infrastructure has led to an overall deterioration in health across the country, and the reemergence of communicable diseases such as polio. More people are estimated to have died from the breakdown of the health system than directly from the fighting.  • These factors have also led to a collapse in economic activity. The cumulative losses in Gross Domestic Product over the course of the conflict have been estimated at $226 billion, about 4-times the Syrian GDP in 2010.  The report takes additional steps to go beyond stocktaking and shed light on the mechanisms through which the conflict has affected economic outcomes. This approach helps to show that the disruptions to the economic system have had a far more significant impact than physical damage, and the longer the war continues the more severe will be its consequences, making recovery ever harder. More specifically: • Cumulative GDP losses due to disruptions of the economic system are 20 times higher than those caused by physical destruction during the first six years of conflict. These disruptions reduce the incentive to engage in productive activities, and interrupt economic networks and supply chains. To measure their severity, the report compares the impacts of economic disruptions with a “physical destruction only” scenario, such as occurs during some natural disasters. In a well-functioning economy, the effects of physical destruction on investments are limited, with economic models predicting only a 22 percent reduction in investments during conflict years. Physical property is partially rebuilt in this scenario and economic repercussions are contained. By destroying economic systems and profitability along with them, economic disruptions by contrast reduce investments significantly, with economic models showing an 80 percent reduction during conflict years. The initial impacts of economic disruptions also persist over time, continuing to cause damage.  • Although the rate of economic deterioration slows down over the course of the conflict, the effects become more persistent. The report uses an economic model to estimate rates of recovery in relation to the duration of the conflict. Should the conflict end in its 6th year, the baseline for calculations, GDP would recoup about 41 percent of the gap with its pre-conflict level in the following 4 years. Overall in this scenario, the cumulative GDP losses will reach almost 8 times the 2010 GDP by the 20th year. In comparison, GDP recoups only 28 percent of the gap in 4 years if the conflict ends in its 10th year, and cumulative losses will be at around 13 times the 2010 GDP. Economic models also show that refugees fleeing across the border in search of safe havens could double between the 6th and 20th year of an ongoing conflict.   Beyond assessing the damage caused by the conflict, will the findings of the ESIA have any future use? While it is not the focus of the ESIA, the detailed analysis it provides of the social and economic impacts of the war would help prioritize actions in any of future reconstruction and recovery process. The findings show that rebuilding infrastructure would be only part of the challenge. The priorities would include rebuilding systems and institutions and, above all, addressing the needs of the large, inactive population. The ESIA would only be a starting point, however because the impact assessment and the recovery and reconstruction needs are different both analytically and numerically: whereas the former tells us what has happened, the latter shows the best way to go forward. By separating the main channels of impact, this study helped prepare the knowledge base that can be used to prioritize actions and determine the scale and composition of aid in the future. 

from World Bank Search – NEWS


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