Syrian war strangles regional economic growth says World Bank

A Kurdish Syrian woman walks with her child past the ruins of the town of Kobane, Aleppo Governorate, northern Syria, March 25, 2015. (AFP)

• War has led to higher debt burdens, deteriorating labor markets, and more restricted access to public services such as health care and electricity
• Conflict has been responsible for annual reductions in economic growth of 1.2% points in Iraq, 1.6% points in Jordan, and 1.7% points in Lebanon in the last decade

LONDON: A decade of conflict in Syria has strangled economic growth among its neighbors and driven poverty higher in Iraq, Jordan and Lebanon, the World Bank said on Thursday
The war has also led to higher debt burdens, deteriorating labor markets, especially for youth and women, and more restricted access to public services such as health care and electricity, the lender said in a new report.
It estimates the conflict has been responsible for annual reductions in economic growth of 1.2 percentage points in Iraq, 1.6 percentage points in Jordan, and 1.7 percentage points in Lebanon in the last decade. Poverty rates have also increased across all three countries over the same period, led by Lebanon where economic conditions have deteriorated further in recent weeks amid a currency crisis.
“The overall economic impact of the Syrian conflict on Iraq, Jordan, and Lebanon has been disproportionately high compared to similar situations elsewhere in the world in the last few decades” said Saroj Kumar Jha, World Bank regional director for the Mashreq. “Looking forward, the international community can support the stability and prosperity of the Mashreq much more effectively through a strategy that combines a medium-term perspective, instead of quick fixes, and a regional focus that builds on cross-border linkages and coordinates a response across borders.”
The report is published as the US imposes the most sweeping sanctions yet against Syrian President Bashar Assad in an attempt to ratchet up pressure on the regime.
The economic fallout from the war has been felt in a number of ways by neighboring countries such as the demographic shock caused by the influx of millions of refugees to the collapse of tourism revenues.
At the peak, refugees exceeded a quarter of the local populations in Jordan, Lebanon, and the Kurdistan Region of Iraq, the highest refugee concentration anywhere, the World Bank said.
The report said that regional states are largely unprotected against economic shocks because of weak social safety nets that often lead to reliance on short-term fixes to disruption, such as the use of diesel generators and water trucks.
It found that refugee children receive 5.4 fewer years of education than their host country peers in Lebanon, and 3.7 fewer years in Jordan, which is largely driven by low enrollment in secondary and tertiary levels. The World Bank estimates the human capital gain from closing these gaps could add to GDP growth by 1.1 percent in Lebanon and 0.4 percent in Jordan. 
The World Bank report calls for a regional response that focuses on building on cross-border connectivity which it said can deliver better outcomes across the Mashreq.