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Post Conflict Recovery and Reconstruction

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December 5, 2019

Eight years of armed conflict and sanctions have caused severe damage to the Syrian economy, its macro-economic framework, its physical and social infrastructure, and its direct productive and social facilities. GDP has fallen by about 60%, fiscal and trade deficit rose to around 50% of GDP, 1/3 of the housing stock has been damaged or destroyed, and half of the population has been forcibly or voluntarily displaced. Additionally, the country has been politically and economically fragmented. The central government controls 60% of territory at present, while the remaining 40%, some of which contains rich of oil and agricultural resources, is controlled by rebel groups supported by different occupying powers.  

The war is near an end, but not the crisis, nor the political solution. A Syrian led Constitutional Committee is meeting in Geneva at present to prepare a Constitution that is expected to set the stage for a political transition based on December 2017 UN Security Council Resolution 2254.

The recovery and reconstruction process which is estimated to cost around US$ 300-400 billion over a ten years period will depend heavily on the political outcome of the conflict. Whether the final outcome will follow the output of the Constitutional Committee and the provisions of Security Council Resolution No. 2254, or be determined unilaterally by the central government in power is not clear at present. What is clear, however, is that recovery and reconstruction will be slow and piecemeal, until a globally recognized political solution is in place, which will enable the flow of external funding on a large scale. Domestic funding and support from Iran and Russia (both of which are subject to US sanctions) will only be able to finance a fraction of the huge reconstruction bill. The West continues to state that they will not extend funding until there is a meaningful political change.

In the meantime, the government will continue its current efforts directed at:

  • Restoring public services in various parts of the government controlled areas.
  • Rebuilding electricity plants, rehabilitating roads water and sewage networks and restoring irrigation canals.
  • Facilitating the rehabilitation and the reopening of industrial factories in both public and private sectors.
  • Repairing damaged agricultural land.
  • Ensuring availability of inputs for business and of basic consumer goods for ordinary citizens.
  • Reviving investment, real estate development and public private partnership (PPP) laws.
  • Providing institutional and financial support to SMEs.
  • Supporting exports, and
  • Providing direct financial support and protection to 40 specific products, and interest support to loans extended for the rehabilitation of SMEs.

At the same time, and according to local press reports, the government is preparing a recovery and reconstruction scheme covering the 2020-2030 period. It consists of two consecutive five years plans, based on various political and financing scenarios (Syria Steps, July 21, 2019). Details of these government plans have not been released. The fact remains that a realistic recovery and reconstruction plan which includes rehabilitating old and rebuilding new infrastructure, enhancing the productive capacity of the economy, rebuilding the country’s housing stock, and accommodating returning refugees and internally displaced people, in addition to numerous other tasks, cannot be drawn up until there is clarity over the political solution and over the state of external sanctions.   

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