IMF: Mideast conflicts have erased economic gains of a generation

Violence in the Middle East and North Africa is bringing unprecedented challenges, according to a new report from the International Monetary Fund that analyzed the economies of 179 countries over several decades.

Rodi Said/Reuters
A Kurdish fighter from the People's Protection Units (YPG) carries his weapon as he walks at the Faculty of Economics building where a defaced picture of Syrian President Bashar al-Assad is seen in the background, in Hasakah, Syria, in August.

As a region that has been gripped by more conflict than any other for more than half a century, the Middle East today faces unprecedented challenges, the International Monetary Fund said Friday in a new report.

Unrest in countries such as Iraq, Libya, Syria, and Yemen has erased "development gains for a whole generation," causing deep recessions, high inflation, and damaged institutions. This is not to mention the loss of life, the emigration of skilled workers, and damage to physical infrastructure.

To quantify the economic costs of conflict, the IMF analyzed the economies of 179 countries since 1970, and released its findings on Friday, ahead of a high-level UN summit next week on refugees and migrants.

Syria’s output, for example, now is estimated to be less than half that of its pre-conflict levels in 2010. Inflation had surged by almost 300 percent there as of May 2015, reports the IMF. Yemen’s GDP declined by up to 35 percent last year alone. Libya's fell nearly the same in 2014, in part because of a steep decline in oil prices.

“We estimate that even with a relatively high annual growth rate of 4.5 percent, it would take Syria more than 20 years just to rebound to its 2010 pre-conflict GDP level,” writes Christine Lagarde, the managing director of the IMF, in a blog post.

To help rebuild the region, the IMF warns, the world will need to scale up development aid in the form of grants and concessional loans. The $11 billion that has already been pledged by countries for Syria and the region through 2020 "would not be enough given the magnitude of the crisis," wrote Ms. Lagarde.

The IMF reports that 20 million people are displaced, and 10 million more are refugees – “a scale not seen since the end of World War II.”

“The immense humanitarian costs that these conflicts inflict are difficult to grasp,” writes Lagarde.

The implications are not just devastating to the countries facing armed conflicts, but also to the growth of neighboring countries and to those taking in millions of refugees.

The influx of refugees from Syria and Yemen to Europe has had only a small economic impact and some positive effects, according to the IMF. That’s in large contrast to what’s happening in the Middle East and North African host countries.

Migrants competing for informal employment in Lebanon, for example, have pushed down wages and put more strain on already tight public services there, such as health care and education. Though half of Syrian refugee children have been able to enter Lebanon's public education system, they've expanded classroom sizes, which, “combined with inadequate teacher training – has reduced overall education quality,” the IMF says.

This report includes material from Reuters and the Associated Press.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.