· Syria’s GDP stands at half of its pre-conflict level.
· The Syrian Pound has depreciated by 400%.
· Jobs have been destroyed at an estimated average rate of 538,000 per year.
· More than three in four Syrians of working age are not earning an income.
· More than 80% of Syrians live below the poverty line; seven in ten Syrians reportedly live in extreme poverty.
Explosive violence and economic insecurity go hand-in-hand, particularly when civilian infrastructure is widely damaged. Syria proves no exception to this rule. Widespread bomb damage has left millions needing aid to survive. In the section below, AOAV examines the economic harm in Syria from the use of explosive weapons.
The GDP of a country experiencing conflict typically falls by an average of two percentage points. Syria’s GDP fell by over five times this after the start of the conflict in 2011. By 2015, total GDP stood at half its pre-conflict levels. The estimated foregone output (the expected output if there was no conflict) amounts to four times the size of Syria’s GDP in 2010; a cumulative loss of some $226 billion.[i]
The most severely affected sector is that of mining (including oil and gas). Oil and gas production, prior to the Syrian conflict, was the main source of government revenue, but by 2016, daily oil production had dropped from a peak of 368,000 barrels of oil per day to less than 40,000.[ii] Much of this was down to the instability created by the conflict, alongside damage to facilities and pipelines.
Non-oil GDP also declined by an annual rate of 15.5% between 2011 and 2014, and was estimated to decline a further 4.9% and 4.3% in 2015 and 2016 respectively.[iii] Government oil production has come to a virtual halt over the course of the war. In 2010, Syria produced 386,000 barrels of oil per day. Having reduced drastically throughout the conflict, in 2017 16,700 barrels per day were produced – just 4% of that produced pre-crisis.
The extent of explosive damage to pipelines and facilities remains unclear but is said to be extensive; much of Syria’s oil fields fell under opposition or ISIS control, becoming the target of various bombing campaigns. A major oil pipeline in Homs was hit by an explosion in 2012 – Syrian activists said the damage was down to regime airstrikes, while state media blamed ‘terrorist groups’. Other pipelines and extractive infrastructure have also been damaged by explosive weapons. Many of the ISIS-controlled oil fields came under heavy bombardment from US-led coalition forces in their attempt to curtail oil revenues to ISIS (discussed in more detail under the environment section of this research).
Overall, every sector of Syria’s economy has been severely affected by the war. Manufacturing, domestic trade and construction have declined, on average, by more than 70%. The contribution of agriculture and government services has risen as a proportion of GDP from about 30% in 2010 to 46% in 2014, despite these sectors having contracted in real terms by more than 40%.
Currency and debt
Due to the large military expenses associated with waging conflict, capital expenditures have fallen rapidly, to about 0.5% of GDP in 2016, compared to 9% of GDP in 2010, while current expenditure has increased by 6% of GDP in 2016 compared to 2010.[iv] The Syrian Pound had depreciated by 400% by March 2017 when it was trading at 514.43,[v] a fall exacerbated by a sharp decline in tourism and oil exports. In January 2018, it was trading at 515. Lines of credit from Iran and assistance from Russia have helped government finances, but the already high public debt has taken a battering, doubling between 2011 and 2014.[vi] It was estimated that public debt stood at 94.8% of GDP in 2017. In terms of GDP growth rate, Syria currently stands in last place in the CIA’s World Factbook, and 194th in GDP per capita.
For consumers, prices rose by more than 300% between March 2011 and May 2015. This rise reflects a combination of supply shortages of basic goods such as food, medicine, and fuel, along with cuts in government subsidies (water, food, electricity, and fuel) and the depreciating currency, but it also reflects the impact of war – and explosive violence – on supply chains and purchasing power. As a result of food price inflation, the 2015 FAO/WFP report found that households were having to spend a disproportionate amount on food – well over 50% of income in many areas. Such levels of spending were confirmed by interviews conducted in 2018 – with such prices, many are having to choose between buying water or food and rate of malnutrition have risen (see section on health).
Rapidly-shrinking job opportunities and scaled-down social security programmes have further aggravated Syria’s humanitarian crisis.[vii] Jobs were being destroyed at an estimated rate of approximately 538,000 per year between 2010 and 2015, adding 482,000 people to the unemployment pool every year.[viii] More than three in four Syrians of working age are not involved in any economic value generation. Unemployment among youth reached 78% in 2015.[ix]
The loss of electrical power across many areas of Syria, widespread damage to infrastructure and the high cost of fuel have also contributed significantly to the loss of employment, as the war has forced many employers out of business. Such a downturn has been exacerbated by the loss and the displacement of skilled workers such as engineers and doctors. These same skilled labourers, however, also struggle to find employment in host countries, where their qualifications are either not valued or their language skills are deemed insufficient. One former engineer that AOAV interviewed in Gaziantep, for example, was happy to find employment, though instead of the petroleum industry he used to work in, he now worked in a bakery. His qualifications in engineering from Syria were unrecognised in Turkey.[x]
In north Syria, 70% of the populace are said to work in agriculture and livestock.[xi] However, extensive damage to agricultural infrastructure, and the systems that power it, through both explosive violence and neglect, has also meant that the amount of work in this area has been seriously impacted. Small-scale farmers have lost yields through displacement, pushing them into poverty; others have been forced to shift to cultivating less labour- and resource-intensive crops, such as coriander and other herbs.[xii]
Such shifts have had consequences. The amount of paid work available has shrunk and there has been a concentration of wealth among larger businesses.[xiii] This area, like many others, has also suffered due to the loss of skilled workers, who are relied upon for expertise and repairs. The loss of skilled-workers, particularly engineers, has led to a loss of business and infrastructural operation in many areas, as many have fled to find refuge elsewhere.[xiv]
Post-conflict it is likely that Syria will hold a weak labour market. The disruption to education, and the numbers of IDPs and refugees, will leave a shortage of skilled workers, teachers, professionals, and physicians for example – similar to what AOAV recorded in post-war Sri Lanka. Many refugees may choose to stay in host countries rather than face the insecurity and instability in post-conflict Syria.
Approximately seven in ten Syrians live in extreme poverty, unable to meet basic food and non-food needs.
So widespread is this economic deprivation that many Syrians, including children, have had to find jobs in the informal sector to survive. The main reasons for such endemic poverty are the loss of property, jobs, and access to public services, including power, health and clean water, as well as rising food prices. Many items are no longer available on the market and, where they are, the prices are as much as triple as that of previous years.[xv]
The cost of living, and of accessing vital resources, has become significantly higher. Prices for fuel oil increased 10-fold between 2011 and 2015. Rice and sugar prices rose by 230% in the same period.[xvi] 6.5 million people in Syria face large food consumption gaps and extreme loss of livelihood assets, contributing to food consumption gaps, with a further 4 million people are at risk of becoming food insecure.
So bad are the levels of poverty that some Syrians have begun to rely on their children to help feed the family. Typically, boys have to undertake such work, because cultural values often prevent adult women from finding employment.[xvii]. Girls, on the other hand, are often married off and Syria reportedly has seen an increase in child marriage – freeing up the family from an extra mouth to feed.[xviii] (This is discussed in more detail under the section on Society and Culture.)
Levels of poverty and hardship are further exacerbated by explosive violence damage to infrastructure. Many in Syria live without electricity or access to clean water. Some rely on power generators, if they can afford it, and – for water – many are forced to turn to unsafe sources. A refugee living in Turkey explained that two of her sisters, still living in Aleppo, tried to filter the water themselves using cloth. It was the only water they could access, and was clearly contaminated. The sisters also had no electricity, so had to pay a neighbour to access power from a generator – but as this was also recorded on their electricity meter, they ended up having to pay two bills each month. It was said that they relied entirely upon their family abroad to pay their bills, as they had been long forced into unemployment.
Omar Sobneh, the WASH sub-cluster coordinator for Syria, told AOAV that many Syrians were spending up to 25% of whatever small income they had to access safe water, with their monthly earnings ranging from between $50 to $100.[xix]
Refugee communities often face similar levels of unemployment and poverty. In Turkey, child labour amongst refugees was not uncommon, while many families found themselves living in cramped and unsanitary conditions. Syrian refugees were often on low wages, particularly children and those without a work permit – groups that could be more easily exploited.[xx]
The housing some refugees are forced to live in reflects this. Many were sharing a home with three other families, with up to fifteen in a room. Some organisations even reported that refugees, unable to afford a room in shared accommodation, would rent a shared bed with an allotted time slot, such as eight hours, in which they could sleep on a rotational basis.[xxi]
In 2017, the US contributed $169.6 million to mine action projects in Iraq and Syria. In addition, the US contributed $63 million to support clearance in areas liberated from Islamic State in northeast Syria, as well as risk education activities. This is six-times higher than US funding provided in 2016. Syria also received substantial funds from Germany, with $13.9 million provided for mine-related activities. In June 2018, Australia announced new funding to cover mine action activities conducted by UNMAS in Syria (A$8 million/US$6 million) over 2018 to 2019.
In total, Syria received $89.4 million of international support for mine-related activities in 2017. And, since 2012, international contributions to mine action in Syria has jumped from just $1 million in 2012 to almost $90 million in 2017.
Yet, whilst some areas have seen a rise in aid, others have increasingly struggled as the conflict unfolded. In 2018, a joint UN-EU pledging conference in Brussels raised $4 billion, but this was less than half of the $9 billion needed to help those in Syria and living as refugees. And whilst funding has increased year on year in response to humanitarian aid requirements, the amounts needed have not been met, according to OCHA’s Financial Tracking Service.
In a sense, the vast need for humanitarian aid has created its own economy in Syria, with millions reliant upon assistance – with certain donated goods traded in a refugee grey economy.[xxii] And yet, in 2018, aid was said to be reaching less than 20% of those in desperate need in Syria, particularly those in hard to reach areas.
Explosive violence in Syria has also had wider economic impacts, particularly on countries hosting large numbers of refugees. Lebanon, for instance, has been particularly impacted. With 1.5 million Syrian refugees living there – more than a quarter of the population of Lebanon – such an influx has, in some areas, caused the population to double. It has even meant that in some towns and villages, the host community has been rendered a minority. Such an influx has also led to a doubling of levels of unemployment and placed considerable strain upon Lebanon’s economy – humanitarian aid being insufficient to support all the needs of refugees.[xxiii] Overall, it is estimated that the Syrian crisis, by 2017, had cost Lebanon some $20 billion.
Since the beginning of the Syrian war, GDP growth in Lebanon has also declined drastically. According to Talal F Salman, Economic Advisor to the Minister Project Director in Beirut, ‘by the end of 2017 the GDP stood at $53 billion when, if it had continued at a normal rate, it should have been $80 billion.’ This doesn’t stem from the refugee crisis alone; Syria is Lebanon’s only overland connection with the rest of the world, and more than 20% of total exports and about 6% of total imports transit by land through Syria. Since the war, both overland imports and exports have been severely disrupted. Tourism and other areas of the services sector, which make up 70% of Lebanon’s GDP, have also been harmed by the Syrian war.[xxiv] It is believed that the influx of refugees, fear of conflict spill-over, as well as the possibility of conflict with Israel, have all curtailed tourism to Lebanon.
The economic situation in Syria is critical and – predictably – the poorest there have been impacted the most. Whilst it is likely the economy will recover as the levels of violence in Syria declines, such a recovery will certainly be uneven and will have adverse impact in environmental terms, too. Overall, poverty in Syria is likely to be long-lasting, particularly for those displaced by the explosive violence, and it will require the international community to continue supplying redevelopment aid, as well as for mine-clearance and victim assistance, for years, even decades, to come.
To read the full report, key findings, other sections, or another related articles, interviews and videos, please see here.
[i] World Bank, 2017, ‘The Toll of War: The Economic and Social Consequences of the Conflict in Syria’.
[ii] World Bank, April 2017, ‘MENA Economic Report: The Economics of Conflict Reconstruction in MENA’.
[iii] World Bank, April 2017, ‘MENA Economic Report: The Economics of Conflict Reconstruction in MENA’.
[iv] World Bank, April 2017, ‘MENA Economic Report: The Economics of Conflict Reconstruction in MENA’.
[v] World Bank, April 2017, ‘MENA Economic Report: The Economics of Conflict Reconstruction in MENA’.
[vi] World Bank, April 2017, ‘MENA Economic Report: The Economics of Conflict Reconstruction in MENA’.
[vii] World Bank, 2017, ‘The Toll of War: The Economic and Social Consequences of the Conflict in Syria’.
[viii] World Bank, 2017, ‘The Toll of War: The Economic and Social Consequences of the Conflict in Syria’.
[ix] World Bank, 2017, ‘The Toll of War: The Economic and Social Consequences of the Conflict in Syria’.
[x] Interview with a refugee from Aleppo, anon., in Istanbul, Turkey. October 29th 2018.
[xi] Interview with Dr Omar Atik, Shafak, in Gaziantep, Turkey. October 26th 2018.
[xii] Interview with Dr Omar Atik, Shafak, in Gaziantep, Turkey. October 26th 2018.
[xiii] Interview with Francesco Baldo, UNDP Syrian Early Recovery coordinator via Skype. October 16th 2018.
[xiv] Reported by Eyad Nahhas at Ihsan Relief and Development, as well as Dr Omar Atik at Shafak and Frnacesco Baldo at UNDP
[xv] Interview with Omar Sobeh, Hand in Hand for Syria, WASH cluster coordinator, in Gaziantep, Turkey, October 23rd 2018.
[xvi] World Bank, 2017, ‘The Toll of War: The Economic and Social Consequences of the Conflict in Syria’.
[xvii] Presentation by Burcin Cevik, International Rescue Committee, Child Protection Sub-Cluster meeting in Gaziantep, Turkey, October 23rd 2018.
[xviii] Interview with Francesco Baldo, UNDP Syrian Early Recovery coordinator via Skype. October 16th 2018.
[xix] Interview with Omar Sobeh, Hand in Hand for Syria, WASH cluster coordinator, in Gaziantep, Turkey, October 23rd 2018.
[xx] Interview with representatives from Citizen’s Assembly, in Istanbul, Turkey, November 1st 2018.
[xxi] Interview with representatives from Citizen’s Assembly, in Istanbul, Turkey, November 1st 2018.
[xxii] Interview with Francesco Baldo, UNDP Syrian Early Recovery coordinator via Skype. October 16th 2018.
[xxiii] Interview with Talal F Salman, Economic Advisor to the Minister Project Director, in Beirut, Lebanon. March 1st 2018.
[xxiv] Interview with Talal F Salman, Economic Advisor to the Minister Project Director, in Beirut, Lebanon. March 1st 2018.
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