Syrian economy will take decades to recover from war

Friday 11/03/2016
Syrian civilians carry supplies in Aleppo, Syria.

Beirut - The Syrian Centre for Pol­icy Research (SCPR) es­timated that by the end of 2014 Syria’s economic losses were more than $119 billion in gross domestic prod­uct (GDP) since the conflict started in 2011. Those losses have grown much larger since then and it will take the country several decades to recover, experts say.
Syria’s war is not only a tragedy for the state that experiences it but has effects on neighbouring coun­tries and even states well beyond its borders.
Millions of refugees have fled to Lebanon, Jordan, Iraq, Turkey and Egypt as well as to EU countries. How to deal with the thousands of refugees seeking shelter and a new way of life topped the agenda of Eu­ropean countries in 2015.
The World Bank estimates that 48% of more than 1 million refugees and migrants who arrived in the European Union in 2015 are from Syria. “Due to the 5-year-long civil war, Syria is the major country of origin for people who have sought refuge in neighbouring countries,” the World Bank said.
The European Commission an­nounced an emergency plan to spend more than $750 million in humanitarian assistance for mi­grants over three years. It called on member states to lift internal border controls “as quickly as pos­sible”.
The war has disrupted the Syrian economy. Estimates of the loss and destruction differ according to re­search methodology and what seg­ments detailed. Much depends on whether estimates include destruc­tion of industrial infrastructure and capital flight or if it includes the refugee exodus, the loss of educa­tion and the losses incurred by the national economy due to interna­tional sanctions.
Syrian Oil Minister Suleiman al- Abbas estimated the country’s di­rect and indirect oil and gas sector losses at approximately $60.4 bil­lion between 2011 and 2015. He did not mention whether this included the cost of the destruction of the petroleum surface facilities and infrastructure and whether the fig­ure included loss of exports due to international sanctions or crude oil produced and smuggled out by the Islamic State (ISIS).
Syrian oil and gas surface facili­ties have suffered a series of attacks. The gas fields and the country’s two refineries are in the western part of the country. They have remained under government control, sustain­ing little damage.
Abbas said: “Despite the difficult conditions, the ministry continued to supply acceptable volumes of natural gas to the power stations and to repair the damaged installa­tions so that the flow of gas contin­ued.”
According to official figures, the flow of gas in 2015 averaged 14.3 million cubic metres per day, of which 86% was allocated to the Ministry of Electricity for power generation and 11% to the Ministry of oil. Even though government control of gas production contin­ued despite the war, it is about 50% lower than pre-war March 2011 pro­duction figures.
Syria’s oil refineries at Homs and Banias processed a total of 84,000 barrels per day (bpd) of crude oil in 2015, about one-third of their name­plate capacity of 120,000 bpd each. Because of jihadist militias’ con­trol of the country’s oilfields, the Syrian government was producing little crude oil; as little as 40,000- 100,000 bpd, compared to approxi­mately 380,000 bpd in 2010. Iran, Russia, and to a lesser extent Ven­ezuela, supplied Syria with about 200,000 bpd of crude oil.
The International Energy Agency (IEA) report in June 2015 projected that the development of Syria’s oil and natural gas resources had been delayed indefinitely. The report added that even if fighting in the re­gion were to subside “it would take years for the Syrian domestic ener­gy system to return to pre-conflict operating status.” Oil assets have been attacked by allied and Russian jets.
Syria’s war has also, of course, taken a huge human toll. More than 260,000 people have died. The Syr­ian Observatory for Human Rights said 12,000 children had been killed. Millions have taken refuge in neighbouring countries. Thousands are escaping daily to Europe.
It is still a mooted question whether many of these refugees will return to Syria after the ces­sation of hostilities. Much will de­pend on the policies of the host countries and whether they would accept the refugees as permanent residents.