SYRIA ECONOMIC MONITOR Conflict, Crises, and the Collapse of Household Welfare Spring 2024 Syria Economic Monitor Conflict, Crises, and the Collapse of Household Welfare Spring 2024 Middle East and North Africa Region ©2024 International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. 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TABLE OF CONTENTS List of Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi ‫الملخص التنفيذي‬ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv 1.  Conflict Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.  Recent Economic Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 The dire economic situation has continued to worsen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Trade activity remains weak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Currency depreciation and consumer price inflation are persistently high . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Syria’s fiscal budget shrinks further . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Syria continues to face funding shortfalls and limited access to humanitarian assistance . . . . . . . . . . . . . . .22 Household welfare further deteriorated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 3.  Outlook and Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Economic outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Development in Reverse: The Impact of the Syrian Conflict on Household Welfare . . . . . . . . . . . . 31 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 iii List of Figures Figure 1 The Conflict in Syria Became the Deadliest and One of the Most Protracted Conflicts of the Past Three Decades . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Figure 2 Conflict Intensity Peaked over the Summer of 2023 and Remains Concentrated in the Northern Governorates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Figure 3 The Uptick in Israel-Related Conflict Events Added to Conflict Intensity Overall . . . . . . . . . . . 4 Figure 4 New Displacement Surged after the February Earthquakes and again Following the Escalation of the Conflict in October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Figure 5 Syria’s Economic Activity Has Significantly Contracted since the Start of the Conflict . . . . . .8 Figure 6 Nighttime Light Data Indicate a Decline in Economic Activity in 2023, Concentrated in Northeastern and Western Syria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Figure 7 Gas Flaring Nighttime Light Data Indicates a Decrease in Syria’s Oil Production in 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Figure 8 Remote Sensing Vegetation Indices Suggest Enhanced Crop Yields in 2023, Largely due to Improved Weather Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Figure 9 Irrigated Cropland Area Decreased during the Syrian Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Figure 10 Cropland Areas along the Syria-Turkiye Border . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Figure 11 During the Conflict, Cropland Yields between Syria and Turkiye Have Significantly Diverged Despite Similar Climatic Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Figure 12 Syria’s Trade in Goods Has Dropped since the Start of the Conflict . . . . . . . . . . . . . . . . . . . . 13 Figure 13 Arab Countries Have Become More Significant Trade Partners . . . . . . . . . . . . . . . . . . . . . . . . 14 Figure 14 Maritime Data Indicate a Further Decrease in Trade Activities in 2023 . . . . . . . . . . . . . . . . . .14 Figure 15 Unrecorded Maritime Trade, Particularly for Oil Tankers, is Prevalent . . . . . . . . . . . . . . . . . . . 15 Figure 16 Israel’s Airstrikes on Syria’s Main Airports Severely Disrupted Air Travel . . . . . . . . . . . . . . . . 16 Figure 17 Syria Has Relied Heavily on Imports of Essential Commodities Since the Conflict . . . . . . . . 17 Figure 18 Syria Has Seen Frequent Periods of High Inflation and Rapid Depreciation Since 2011 18 Figure 19 Rapid Currency Depreciation and High Levels of Consumer Price Inflation Persisted Throughout 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Figure 20 Disparities in Food Basket Prices within Syria Widened in 2023 . . . . . . . . . . . . . . . . . . . . . . . 19 Figure 21 Syria’s Fiscal Budget Has Continuously Shrunk since the Start of the Conflict . . . . . . . . . . .20 Figure 22 The Syrian Government Continues to Tighten the Subsidy Programs . . . . . . . . . . . . . . . . . . .21 Figure 23 Donor Funding, which Increased Immediately Post-Earthquake, Has Since Gradually Declined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Figure 24 Humanitarian Aid Access, Especially for Food, in Northwest Syria, Has Notably Declined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Figure 25 Access to Services Has Declined since the Earthquakes, Especially in the Most-Affected Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Figure 26 A Cholera Epidemic Continued Amid a Chronic Shortage of Clean Water . . . . . . . . . . . . . . 25 Figure 27 Households Reported Insufficient Ability to Meet Basic Needs . . . . . . . . . . . . . . . . . . . . . . . . 26 Figure 28 The Earthquake Exacerbated the Severe Welfare Challenges Facing Affected Households, Increasing their Reliance on Coping Strategies . . . . . . . . . . . . . . . . . . . . . . . . . .26 Figure 29 The Share of Foreign Aid Received by Syria from Arab Countries Increased in 2023 . . . . . 29 Figure 30 Syria Has Become a Major Producer and Exporter of Captagon, the Revenues of which Exceed Revenues from Licit Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Figure 31 Extreme Poverty and Poverty Rates Have Dramatically Increased since the Beginning of the Syrian Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 iv CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE Figure 32 Poverty and Extreme Poverty Rates are Highest in the Northeast and Southwest of the Syrian Arab Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Figure 33 Multidimensional Vulnerability is High due to Weakened Livelihood Opportunities, and vulnerability is Highest in Al-Hasakeh, Dara, and As-Sweida . . . . . . . . . . . . . . . . . . . . . . 34 List of Tables Table 1 The Impact of the Syrian Conflict on Syrian Cropland Yields . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Table 2 Budgeted Subsidies by Items in Syria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Table 3 Macroeconomic Outlook Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 List of Boxes Box 1 Evidence that the Conflict Persistently Weakened Agricultural Production in Syria . . . . . . . 11 Box 2 Monitoring Unrecorded Vessel Activity in Syria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15  v LIST OF ABBREVIATIONS AANES Autonomous Administration of North IDPs Internally Displaced Persons and East Syria LAS League of Arab States ACLED Armed Conflict Location & Event Data MENA Middle East and North Africa Project MODIS Moderate-Resolution Imaging AIS Automatic Identification System Spectroradiometer ASAP Anomaly Hotspots of Agricultural MoF Ministry of Finance Production MSNA Multi-Sectoral Needs Assessment CASH Cash Assistance Vouchers or Cash in MTI GP Macroeconomics, Trade, and Hand Investment Global Practice CBS Central Bank of Syria NASA National Aeronautics and Space CPI Consumer Price Index Administration DID Difference-in-Difference NDVI Normalized Difference Vegetation Index DMSP Defense Meteorological Satellite NGOs Non-governmental Organizations Program NTL Nighttime Light EEZ Exclusive Economic Zone OCHA Office For the Coordination of EIA Energy Information Administration Humanitarian Affairs EU European Union OFAC Office of Foreign Assets Control EVI Enhanced Vegetation Indices SANA Syrian Arab News Agency FAOSTAT Food and Agriculture Organization SDF Syrian Democratic Forces of the United Nations Statistics SIG Syrian Interim Government Department SSG Syrian Salvation Government FCV Fragility, Conflict, and Violence SYP Syrian Pound FTS Financial Tracking Service UAE United Arab Emirates GCC Gulf Cooperation Council UCDP Uppsala Conflict Data Program GDP Gross Domestic Product UN United Nations HNAP Humanitarian Needs Assessment UNHCR United Nations High Commissioner for Program Refugees HSOS Humanitarian Situation Overview in UNSC United Nations Security Council Syria US United States vii US$ United States Dollar WFP World Food Programme USD United States Dollar WHO World Health Organization USGS U.S. Geological Survey WTO World Trade Organization WASH Water, Sanitation and Hygiene yoy Year-on-year WDI World Development Indicators viii CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE PREFACE T he Syria Economic Monitor is a semi-annual Ivonne Stephanie Lara Cortes (Consultant), Robert report detailing recent economic develop- Andrew Marty (Data Scientist), and Sahiti Sarva (Data ments in the Syrian Arab Republic and its Scientist). near-term outlook. The Syria Economic Monitor is The Special Focus note “Development in produced by the World Bank’s Macroeconomics, Reverse: The Impact of the Syrian Conflict on Trade, and Investment Global Practice (MTI GP) in col- Household Welfare” was prepared by Sandra Baquie, laboration with the World Bank Data Lab. The report drawing on Redaelli and Infanzon Guadarrama describes key features of Syria’s macroeconomic (2024) “The Welfare of Syrian Households after a policy and situates them in the context of the ongoing Decade of Conflict”. Luan Zhao, Joanne Matossian, conflict in the country. It also presents findings from Yahui Zhao, and Benny Istanto prepared Box 1, “Con- recent World Bank analytical work on Syria. The Syria flict persistently weakened agricultural production in Economic Monitor is part of a broader effort by the Syria”. Luan Zhao, Andres Chamorro, and Cherryl MTI GP to better understand economic and social Mallari Chico wrote Box 2, “Monitoring unrecorded dynamics in countries affected by fragility, conflict, vessel activity in Syria”. and violence (FCV), while reflecting the unique con- Staff from the World Bank Data Lab, led by straints involved in working in an FCV environment. Holly Krambeck, advised on using alternative data This fourth edition of the Syria Economic to monitor economic activity in Syria and prepared Monitor was prepared by a team comprising Luan a document entitled “Support for World Bank Syria Zhao (Senior Economist, Task Team Leader), Sandra Economic Monitor” (LINK), which informed the analy- Baquie (Economist), Mounir Mahmalat (Senior Opera- sis presented in this edition. tions Officer), Peter Salisbury (Senior Consultant), The authors would like to express their grati- Karam Shaar (Senior Consultant), Anthony Biswell tude to Jean Christophe Carret (Country Director), (Senior Consultant), Joanne Matossian (Consultant), Eric Le Borgne (Practice Manager), Norbert Fiess Yahui Zhao (Consultant), Holly Krambeck (Program (Lead Economist), and May Ibrahim (Operations Manager, Data Lab), Maria Ruth Jones (Senior Analyst) for their valuable input during the prepara- Survey Economist), Alejandra Quevedo Cardona tion and review process for this report. The team is (Consultant), Andres Chamorro (Geographer), Benny also grateful to Zeina Khalil (Senior External Affairs Istanto (Consultant), Cherryl Mallari Chico (Con- Officer), who led the report’s publishing, communica- sultant), Gabriel Stefanini Vicente (Data Scientist), tions, and outreach strategy, and to Sean Lothrop ix (Senior Consultant), who edited the final version. staff and do not necessarily reflect the views of the Special thanks are due to Ekaterina Georgieva Ste- Executive Board of the World Bank or the govern- fanova (Senior Program Assistant) and Mabel Nomsa ments they represent. Mkhize (Program Assistant) for their excellent admin- For more information about the World Bank’s istrative support, and to Abdullah Alruwaishan for the activities in Syria or to download a digital copy of Arabic translation of the Executive Summary. The this report, please visit https://www.worldbank.org/ team is also grateful to Robert W. Reinecke, Salem en/country/syria/overview#1. For questions and Massalha, and Shehab El-Dien for their assistance comments on the content of this publication, please with the formatting and design of the report. contact Eric Le Borgne (eleborgne@worldbank.org), The data cut-off date for this Syria Economic Norbert Matthias Fiess (nfiess@worldbank.org), and Monitor was March 31, 2024. The findings, inter- Luan Zhao (lzhao1@worldbank.org). Media inquiries pretations, and conclusions expressed in the Syria should be addressed to Zeina Khalil (zelkhalil@world- Economic Monitor are those of individual World Bank bank.org). x CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE EXECUTIVE SUMMARY T he conflict in Syria continues to be the in March 2024 still below those observed before the deadliest of this century. Between 2011 start of the ongoing conflict in the Middle East. Since and 2022, Uppsala Conflict Data Program October, military groups affiliated with the Iran-backed (UCDP) recorded more than 407,000 battle-related “axis of resistance” have carried out many attacks on deaths in Syria. With no prospects of an imminent US bases in northeast Syria and Israeli targets in the political settlement, the Syrian conflict has become Golan Heights, while Israeli and US militaries have one of the most protracted conflicts in recent history. targeted various locations across Syria, resulting in To date, the conflict in Syria ranks second in duration, dozens of fatalities, including civilians, and extensive with only the Afghan civil wars of 1989–2001 and damage to civilian infrastructure. 2006–2021 lasting longer since 1990. The dire economic situation continued to Syria experienced multiple overlapping worsen in 2023. Economic activity, as proxied by shocks in 2023. In February, two devastating nighttime light emissions, declined by 1.2 percent earthquakes and a series of aftershocks struck the year-on-year (yoy), especially along Syria’s western country’s northern provinces, inflicting terrible human borders, in part due to weakened trade activity. losses and extensive physical damage across areas Indeed, maritime data indicates a roughly 10 percent that were already reeling from the conflict. Increased decrease in Syrian port visits in 2023, even after fighting and remote violence in northern Syria since accounting for unrecorded maritime activity, preva- September 2023 brought annual fatalities to a four- lent among vessels like oil tankers evading detection year high and triggered a fresh wave of internal near Syrian waters. Nighttime gas-flaring data also displacement, compounding the displacement shows a 5.5 percent yoy drop in oil production, partly caused by the earthquakes. due to earthquake- and conflict-related infrastructure The Middle East conflict has spilled over damage. In 2023, the Syrian pound depreciated sub- Syria’s borders. The Armed Conflict Location & Event stantially by 141 percent against the US dollar, while Data Project (ACLED) recorded 201 conflict events consumer price inflation is estimated to have risen by and 236 fatalities in Syria linked to Israeli attacks 93 percent, exacerbated by government subsidy cuts. between October 2023 and March 2024. Repeated After rebounding in the wake of the Febru- Israeli airstrikes on Syria’s main airports led to a ary 2023 earthquake, aid flows to Syria have 42 percent decline in flights in the fourth quarter of declined, and access to humanitarian assistance 2023 compared to the previous quarter, with levels has become more challenging. According to the xi UN Financial Tracking Service (FTS) statistics, total Iranian-linked groups and Israel. A broader regional funding for humanitarian assistance amounted to conflict would also inflate commodity prices, which is US$2.8 billion in 2023, down by 5 percent from the a concern for Syria as it is a net food and fuel importer. previous year. Diminished external aid, coupled with A possible redirection of aid and international assis- soaring prices and reduced access to essential tance due to the ongoing conflict centered in Gaza goods, has deepened welfare challenges for Syrian may exacerbate Syria’s humanitarian crisis, poten- households. According to the REACH Humanitarian tially worsening malnutrition, deepening poverty, and Situation Overview in Syria (HSOS) surveys, access increasing the likelihood of disease outbreaks. to health services, sewage systems, and food markets Captagon may have become the most valu- has continued to deteriorate in the areas of northern able sector of Syria’s economy. Syria has become Syria most affected by the earthquake. Heightened a major producer and exporter of captagon, a highly financial vulnerability is increasingly prompting addictive and illegal fenethylline-based drug that households to purchase goods on credit as a cop- became popular in the Middle East and particularly ing strategy. GCC countries. Using a novel dataset on drug seizures Subject to extraordinarily high uncertainty, worldwide, this report estimates the annual market real GDP is projected to contract by 1.5 percent value of captagon of Syrian origin to amount to up to in 2024. This projection assumes that the regional US$5.6 billion between 2020 and 2023. Actors based conflict will remain largely contained this year. Infla- in or linked to Syria profit from the sale of captagon to tion is expected to remain high in the short term due up to US$1.8 billion per year, almost twice the revenue to the pass-through effects of currency depreciation, generated from all licit Syrian exports in 2023. along with persistent shortages and potential further Special Focus: The Syrian conflict had a subsidy cuts to food and fuel. devastating impact on household welfare, driving Heightened regional tensions pose consid- a sharp deterioration in living conditions and pov- erable downside risks to the economy. Escalating erty indicators. According to survey data collected cross-border attacks could damage infrastructure, by humanitarian organizations, extreme poverty rose potentially further disrupting supply chains and from a negligible level in 2009 to roughly 25 percent by increasing logistics costs. Attacks by the Islamic mid-2022. Multiple external factors, including the 2019 State are likely to intensify amid increased pressure financial crisis in Lebanon, the COVID-19 pandemic, on government security forces from US and Israeli and Russia’s invasion of Ukraine, have further eroded attacks. The high tensions following events such as the welfare of Syrian households, and the massive Israel’s bombing of an Iranian consulate in Damas- Türkiye-Syria earthquakes in February 2023 devastated cus on April 1, 2024, risk increasing attacks by both areas that were already severely affected by the conflict. xii CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE ‫الملخص التنفيذي‬ ‫استمر الوضع االقتصادي املرتدي يف التدهور خالل عام ‪.2023‬‬ ‫إذ انخفض النشاط االقتصادي امل ُقاس مبستويات اإلضاءة الليلية بنسبة‬ ‫ة عىل طول الحدود الغربية لسوريا‪،‬‬ ‫‪ 1.2‬باملئة عىل أساس سنوي‪ ،‬خاص ً‬ ‫حرب‬ ‫ا تزال الحرب يف سوريا األكرث دموية يف هذا القرن‪ .‬فهي ٌ‬ ‫خلفت معاركها أكرث من ‪ 407,000‬حالة وفاة خالل الفرتة من ‪2011‬‬ ‫إىل ‪ 2022‬طبقاً لربنامج أوبساال لبيانات النزاعات‪ .‬ذلك وال تبدو يف‬ ‫ل‬ ‫ويُعزى ذلك جزئياً إىل ضعف النشاط التجاري‪ ،‬وبالفعل تشري البيانات‬ ‫األفق أي تسوية سياسية بعد لهذه الحرب التي أضحت واحدة من أطول‬ ‫البحرية إىل انخفاض مقداره ‪ 10‬يف املئة تقريباً يف الزيارات إىل املوانئ‬ ‫ة املرتبة الثانية يف قامئة الرصاعات‬‫الرصاعات يف التاريخ الحديث محتل ً‬ ‫السورية عام ‪ 2023‬حتى مع احتساب االنشطة البحرية غري املسجلة‬ ‫األطول منذ ‪ ،1990‬وال يسبقها يف القامئة سوى الحربني األهليتني األفغانيتني‬ ‫الشائعة أوساط السفن كناقالت النفط التي تتجنب الكشف عنها بالقرب‬ ‫خالل الفرتة ‪ 2001–1989‬والفرتة ‪.2021–2006‬‬ ‫من املياه السورية‪ .‬ت ُظهر بيانات حرق الغاز ليالً أيضاً انخفاضاً سنوياً‬ ‫شهدت سوريا صدمات متعددة ومتداخلة يف عام ‪.2023‬‬ ‫يف إنتاج النفط بنسبة ‪ 5.5‬يف املئة‪ ،‬ويرجع ذلك جزئياً إىل األرضار التي‬ ‫لقد شهدت محافظات الشامل السوري خالل شهر شباط‪/‬فرباير زلزالني‬ ‫لحقت بالبنية التحتية نتيجة الزلزال والرصاع يف البلد‪ .‬وشهد العام ‪2023‬‬ ‫ة خسائر برشية‬ ‫مدمرين تلتهام سلسلة من الهزات االرتدادية ملحق ً‬ ‫أيضاً انخفاضاً كبريا ً يف قيمة اللرية السورية مقابل الدوالر األمرييك بنسبة‬ ‫فادحة وأرضار مادية جسيمة مبناطق كانت تعاين من الرصاع أساساً‪،‬‬ ‫‪ 141‬يف املئة‪ ،‬يف الوقت الذي تشري التقديرات إىل ارتفاع معدل تضخم‬ ‫وأفضت املعارك وأعامل العنف املتصاعدة يف شامل سوريا منذ سبتمرب‬ ‫أسعار املستهلكني بنسبة ‪ 93‬يف املئة وتفاقمه نتيجة التخفيضات يف‬ ‫‪ 2023‬إىل وصول عدد القتىل السنوي إىل أعىل مستوى له منذ أربع‬ ‫الدعم الحكومي‪.‬‬ ‫سنوات‪ ،‬وأدت إىل موجة نزوح جديدة ضاعفت من آثار النزوح التي‬ ‫بعد انتعاشها يف أعقاب زلزال شباط‪/‬فرباير ‪ ،2023‬انخفضت‬ ‫خلفتها الزالزل‪.‬‬ ‫تدفقات املساعدات إىل سوريا‪ ،‬وأصبح الوصول إىل املساعدات اإلنسانية‬ ‫جل‬ ‫امتد الرصاع يف الرشق األوسط عرب الحدود السورية‪ .‬فقد س ّ‬ ‫أكرث صعوبة‪ .‬بلغ إجاميل التمويل املخصص للمساعدات اإلنسانية يف عام‬ ‫مرشوع بيانات مواقع وأحداث النزاعات املسلحة ‪ 201‬حدث نزاع و‪236‬‬ ‫‪ 2023‬مبلغ وقدره ‪ 2.8‬مليار دوالر أمرييك وفقًا إلحصاءات دائرة التتبع‬ ‫حالة وفاة مرتبطة بالهجامت اإلرسائيلية خالل الفرتة بني ترشين األول‪/‬‬ ‫املايل التابعة لألمم املتحدة‪ ،‬أي بانخفاض بنسبة ‪ 5‬يف املئة عن العام‬ ‫أكتوبر ‪ 2023‬ومارس ‪ ،2024‬وأدت الغارات الجوية اإلرسائيلية املتكررة‬ ‫السابق‪ .‬وقد أدى تناقص املساعدات الخارجية‪ ،‬إىل جانب ارتفاع األسعار‬ ‫عىل املطارات الرئيسية يف سوريا إىل انخفاض عدد الرحالت الجوية‬ ‫وانخفاض إمكانية الحصول عىل السلع األساسية‪ ،‬إىل تعميق تحديات‬ ‫بنسبة ‪ 42‬يف املئة يف الربع األخري من عام ‪ 2023‬مقارنة بالربع السابق‪،‬‬ ‫الرعاية االجتامعية لألرس السورية‪ ،‬حيث استمر الوصول إىل الخدمات‬ ‫واستمر الوضع عىل حاله وظلت مستويات الرحالت الجوية يف آذار‪/‬مارس‬ ‫الصحية وشبكات الرصف الصحي وأسواق املواد الغذائية يف التدهور‬ ‫‪ 2024‬أقل مام كانت عليه قبل بدء الرصاع القائم يف الرشق األوسط‪.‬‬ ‫يف مناطق شامل سوريا األكرث ترضرا من الزلزال وفقًا الستطالعات‬ ‫ومنذ ترشين األول‪/‬أكتوبر‪ ،‬نفذت مجموعات عسكرية تابعة ل“محور‬ ‫”ريتش“ للوضع اإلنساين يف سوريا‪ ،‬يف الوقت الذي يضغط ضعف القدرة‬ ‫املقاومة” املدعوم من إيران العديد من الهجامت عىل قواعد أمريكية‬ ‫املالية املتزايد عىل األرس ويضطرهم إىل رشاء السلع الغذائية بالدين‬ ‫يف شامل رشق سوريا وأهداف إرسائيلية يف مرتفعات الجوالن‪ ،‬يف حني‬ ‫كاسرتاتيجية للتكيف‪.‬‬ ‫استهدف الجيشان اإلرسائييل واألمرييك مواقع مختلفة يف جميع أنحاء‬ ‫وصلت حالة عدم اليقني إىل مستويات عالية جداً‪ ،‬ومن‬ ‫سوريا‪ ،‬مام أسفر عن مقتل العرشات‪ ،‬بينهم مدنيون‪ ،‬وإلحاق أرضار‬ ‫املتوقع بالتايل انكامش الناتج املحيل اإلجاميل الحقيقي بنسبة ‪ 1.5‬يف‬ ‫جسيمة بالبنية التحتية املدنية‪.‬‬ ‫‪xiii‬‬ ‫رمبا أصبح الكبتاغون القطاع األكرث قيمة يف االقتصاد السوري‪.‬‬ ‫املئة يف عام ‪ .2024‬ويفرتض هذا التوقع االستمرار يف احتواء الرصاع‬ ‫أصبحت سوريا منتجا ومصدرا رئيسيا للكبتاغون‪ ،‬وهو عقار شديد اإلدمان‬ ‫اإلقليمي إىل حد كبري بقية هذا العام‪ ،‬يف حني يُتوقع أن تبقى مستويات‬ ‫وغري قانوين يعتمد عىل الفينيثيلني وأصبح شائعا يف الرشق األوسط‬ ‫ة عىل املدى القصري نتيجة اآلثار العابرة النخفاض قيمة‬ ‫التضخم مرتفع ً‬ ‫وخاصة دول مجلس التعاون الخليجي‪ .‬باستخدام مجموعة بيانات‬ ‫العملة وأن يستمر نقص الغذاء والوقود واحتامل زيادة خفض الدعم‬ ‫جديدة عن مضبوطات املخدرات يف جميع أنحاء العامل‪ ،‬يقدر هذا التقرير‬ ‫الحكومي لها‪.‬‬ ‫القيمة السوقية السنوية للكبتاغون سوري املنشأ مبا يصل إىل ‪ 5.6‬مليار‬ ‫تشكل التوترات اإلقليمية املتصاعدة مخاطر سلبية جسيمة‬ ‫دوالر أمرييك بني عامي ‪ 2020‬و ‪ .2023‬تستفيد الجهات الفاعلة يف سوريا‬ ‫عىل االقتصاد‪ .‬فقد يؤدي تصاعد الهجامت عرب الحدود إىل إلحاق أرضار‬ ‫واملرتبطة بها من بيع الكبتاغون مبا يصل إىل ‪ 1.8‬مليار دوالر أمرييك‬ ‫بالبنية التحتية‪ ،‬مام قد يتسبب يف املزيد من االختالالت يف سالسل‬ ‫سنويا‪ ،‬أي ما يقرب من ضعف اإليرادات املتأتية من جميع الصادرات‬ ‫التوريد وزيادة التكاليف اللوجستية‪ .‬من املرجح أن تشتد هجامت‬ ‫السورية املرشوعة يف عام ‪.2023‬‬ ‫تنظيم الدولة اإلسالمية وسط زيادة الضغط عىل قوات األمن الحكومية‬ ‫فصل تحلييل خاص‪ :‬كان تأثري الرصاع السوري عىل رفاه األرسة‬ ‫من الهجامت األمريكية واإلرسائيلية‪ .‬إن التوترات الشديدة التي أعقبت‬ ‫مدمراً وأدى إىل تدهور حاد يف الظروف املعيشية ومؤرشات الفقر‪ .‬لقد‬ ‫أحداثا مثل قصف إرسائيل لقنصلية إيرانية يف دمشق يف ‪ 1‬نيسان‪/‬أبريل‬ ‫ارتفعت معدالت الفقر املدقع من مستوياتها الضئيلة التي ال تكاد تُذكر‬ ‫‪ ،2024‬تهدد بزيادة الهجامت من قبل كل من الجامعات املرتبطة بإيران‬ ‫يف عام ‪ 2009‬إىل ما يقرب من ‪ 25‬يف املئة بحلول منتصف عام ‪ 2022‬وفقًا‬ ‫وإرسائيل‪ .‬سيؤدي نشوب رصاع إقليمي أوسع أيضً ا إىل تضخم أسعار‬ ‫مسوحها‪ .‬واجتمعت العديد‬ ‫للبيانات التي جمعتها املنظامت اإلنسانية يف ُ‬ ‫السلع األساسية الذي يُعد من أهم مصادر القلق لسوريا كونها مستورد‬ ‫من العوامل الخارجية لتزيد من ضعف مستوى معيشة األرسة السورية‬ ‫صاف للغذاء والوقود‪ .‬كام تؤدي إعادة توجيه املساعدات الدولية‬ ‫ِ‬ ‫منها األزمة املالية يف لبنان يف عام ‪ ،2019‬وجائحة كورونا‪ ،‬والغزو الرويس‬ ‫املحتملة بسبب الرصاع الحايل املتمركز يف غزة إىل تفاقم األزمة اإلنسانية‬ ‫ألوكرانيا‪ ،‬كام أن الزالزل الهائلة التي رضبت تركيا وسوريا يف شباط‪/‬فرباير‬ ‫يف سوريا‪ ،‬مام قد يؤدي إىل تفاقم سوء التغذية‪ ،‬وتعميق الفقر‪ ،‬وزيادة‬ ‫‪ 2023‬قد دمرت املناطق التي كانت مترضرة بشدة من النزاع‪.‬‬ ‫احتامل تفيش األمراض‪.‬‬ ‫‪xiv‬‬ ‫‪CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE‬‬ 1 CONFLICT CONTEXT T he war in Syria continues to be the world’s in Ukraine (117.2), Somalia (45.5), and Myanmar (31.9) deadliest conflict of the past three decades record higher fatalities per capita.1 (Figure 1A). Between 2011 and 2022, the In 2023, Syria experienced the most Uppsala Conflict Data Program (UCDP) recorded more intense military escalation of the past four years. than 407,000 battle-related deaths in Syria—more than After a brief reduction of violence following the Feb- any other conflict of the past three decades—almost ruary 6 earthquake, the number of violent events and twice as many as were recorded in the Afghan civil war the number of fatalities surpassed previous levels between 2006 and 2021 and four times as many as during the summer (Figure 2A). In October, govern- during the first year of war in Ukraine in 2022. The Syr- ment forces launched a major offensive against ian conflict was also among the quickest to escalate, opposition groups in Syria’s northwestern Idleb with only the Ethiopian conflict in Tigray of 2021 and governorate,2 causing hundreds of civilian casualties 2022 causing more conflict-related deaths in the first and severely disrupting essential public services.3 two years. As political settlements to end the conflict Violence also surged in the northeast between remain elusive and extremist groups, notably the so- called Islamic state, continue to wage insurgencies, 1 According to ACLED. the Syrian conflict has also become one of the most 2 Hezaber, Husam and Ali Haj Suleiman. 2023. “Northwest protracted conflicts in recent history. In its duration, Syria witnesses most intense military escalation in three the Syrian conflict is surpassed only by the Afghan years.” Al Jazeera, October 31, 2023. https://www. civil wars of 1989–2001 and 2006–2021, as fatalities aljazeera.com/news/2023/10/31/northwest-syria- decreased slower than during any other conflict of witnesses-most-intense-military-escalation-in-three-years 3 Agence France Press. 2023. “More than 4,360 dead the past three decades (Figure 1B). With recurring in Syria war in 2023 – war monitor.” The Jordan escalations of violence, the Syrian conflict remains the Times, December 31, 2023. https://www.jordantimes. 4th most deadly conflict in 2023 on a per-capita basis. com/news/region/more-4360-dead-syria-war-2023- With 27 deaths per 100,000 people, only the conflicts %E2%80%94-war-monitor. 1 The Conflict in Syria Became the Deadliest and One of the Most Protracted Conflicts of FIGURE 1 •  the Past Three Decades A. Conflict-related deaths B. Conflict-related deaths (Thousand people) (Fatalities, cumulative) 100,000 Syria 2011–2022 90,000 Afghanistan 2006–2021 80,000 70,000 Ethiopia 2021–2022 60,000 50,000 Ethiopia 1989–1991 40,000 30,000 Ukraine 2022 20,000 Ethiopia 1999–2000 10,000 0 t=1 t=11 Afghanistan 1989–2001 t=2 t=12 t=0 t=4 t=8 t=10 t=14 t=6 t=7 t=9 t=3 t=5 t=13 t=15 DR. Congo 1996–1999 Syria 2011–2022 Afghanistan 2006–2021 Bosnia and Ethiopia 2021–2022 Ethiopia 1989–1991 Herzegovina 1992–1995 Ethiopia 1999–2000 Afghanistan 1989–2001 Bosnia and DR. Congo 1996–1999 Iraq 2013–2017 Herzegovina 1992–1995 0 50 100 150 200 250 300 350 400 450 Iraq 2013–2017 Source: UCDP Georeferenced Event Dataset v. 23.1. Note: The UCDP Georeferenced Event Dataset v. 23.1 collects data on state-based armed conflict, non-state conflict, and one-sided violence globally between 1989 and 2022. A country is coded as having experienced a conflict in any given year if the number of battle-related fatalities exceeds one hundred per one million people. Period t = 0 signifies the year a conflict initiates for each respective country, while the last year indicates its resolution or cessation. September and November, with clashes between the most protests occurred in As-Sweida and Dar’a, Syrian Democratic Forces (SDF) and tribal groups major demonstrations took place throughout August in Deir-ez-Zor governorate and a series of Turkish and September in cities both under government airstrikes on Autonomous Administration-held areas, and opposition control, including Damascus, Daraa, disrupting the supply of water and electricity for much Tartous, Aleppo, Homs, and Deir-ez-Zor.7 These dem- of the population (Figure 2B). By October, the onset onstrations surpassed previous protest waves both of the ongoing conflict in the Middle East precipitated various attacks by military groups linked to the “axis 4 U.S. Department of Defense. 2024. “Deputy Pentagon of resistance” on US bases in Syria’s northeast4 and Press Secretary Sabrina Singh Holds a Press Briefing.” on Israeli targets in the occupied Golan Heights,5 as January 18, 2024. https://www.defense.gov/News/ well as a series of attacks by Israeli and US militaries Transcripts/Transcript/Article/3649790/deputy- pentagon-press-secretary-sabrina-singh-holds-a-press- on various targets across Syria, resulting in dozens briefing/. of fatalities, including civilians, and extensive dam- 5 Crisis Analysis. 2024. “Israel–Gaza Conflict Implications age to civilian infrastructure.6 Throughout 2023, the for the MENA Region”. January 2024. Armed Conflict Location and Event Data Project 6 Hassan, Mohammed. 2024. “US response to Tower (ACLED) recorded 6,234 conflict-related deaths and 22 attack in Jordan: Less intense, more restrained 12,741 violent events in Syria, an increase of 5 and than anticipated.” Middle East Institute, February 9, 2024. https://www.mei.edu/publications/us-response- 3 percent from 2022. tower-22-attack-jordan-less-intense-more-restrained- Protests erupted in the southern governor- anticipated. ates of Dar’a and As-Sweida in August 2023, 7 Crisis Analysis – Syria. 2023. “August ’23 Monthly Report.” which quickly spread across the country. While https://ca-syr.org/periodical/august-2023-monthly-report. 2 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE Conflict Intensity Peaked Over the Summer of 2023 and Remains Concentrated in FIGURE 2 •  the northern Governorates A. Violent events and fatalities, 2019 to 2023 B. Heatmap of fatalities, 2023 (Number per month) 2,500 2,000 1,800 2,000 1,600 1,400 1,500 1,200 1,000 1,500 800 600 500 400 200 0 0 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22 May-22 Sep-22 Jan-23 May-23 Sep-23 Jan-24 Number of Fatalities Violent events Protests and riots Fatalities (RHS) Source: ACLED, https://acleddata.com/. in number and size. Protests were initially triggered and Damascus, significantly disrupting air traffic (see by deteriorating living conditions and high inflation, Section II.B).9 However, both the number and impact driven by a reduction in subsidies for fuel and other of Israel-related conflict events remain limited within basic necessities as well as a significant drop in the the context of Syria’s broader conflict environment. parallel-market value of the Syrian pound against the From October until March 2024, Israeli attacks exhibit US dollar. By late August, protests had evolved into a a similar lethality as the average of attacks Israel movement expressing political demands concerning conducted in previous periods with the exception of corruption, governance, and political representation. March 2024 (Figure 3A), while the share of Israel- While largely peaceful, on some occasions, protests related events has never accounted for more than 4 escalated into violence and led to clashes with secu- percent of all conflict events in Syria in a given month rity forces. (Figure 3B). Israel’s attacks following the onset of the The military escalations of September and ongoing conflict in the Middle East added to the October 2023 triggered a fresh wave of displace- intensity of the Syrian conflict overall. Between ment in Syria’s northern regions, compounding October 2023 and March 2024, ACLED recorded a the displacement caused by the February 2023 total of 201 conflict events and 236 fatalities linked earthquakes. As the February earthquake destroyed to Israeli attacks within Syria, the highest number of hundreds of thousands of housing units, approxi- conflict events involving Israel since the project began mately 500,000 to 600,000 people became homeless monitoring the Syrian conflict in 2017. These strikes include various targeted assassinations of Iranian 8 Shotter, James, Guy Chazan, and Andrew England. and Iran-linked personnel, which killed at least 17 “Israel’s consulate assault raises stakes in shadow war with members of Iran’s Revolutionary Guards between Iran.” Financial Times, April 2, 2024. https://www.ft.com/ content/34ac0176-1094-438f-9362-18c0d271a195. October 7 and April 3,8 caused significant collateral 9 Agence France Press. 2023. “Syria’s two main airports damage and fatalities, and increased conflict-related still shut month after Israeli strikes: monitor.” Arab News, risks (see Section III.B). Repeated strikes on critical November 22, 2023. https://www.arabnews.com/ infrastructure also targeted the airports of Aleppo node/2413286/middle-east. Conflict Context 3 FIGURE 3 • The Uptick in Israel-Related Conflict Events Added to Conflict Intensity Overall A. Israel-related conflict events and fatalities, 2017 to 2024 B. Israel-related conflict events in Syria: Total number and proportion (Number per month) (Number; percent) 80 70 4% 70 60 Mar-24 3% 60 50 50 Dec-23 40 2% Fatalities 40 30 30 Feb-24 Oct-23 20 1% Nov-23 20 Jan-24 10 10 0 0% Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22 May-22 Sep-22 Jan-23 May-23 Sep-23 Jan-24 0 0 10 20 30 40 50 60 70 Israel-related events Share of Israel-related events (RHS) Events Source: ACLED, https://acleddata.com/. Note: Israel-related conflict events in Syria encompass airstrikes, and confrontations between Israeli forces and actors within Syria, including the Syrian government, Iranian-backed groups, or Hezbollah. FIGURE 4 • New Displacement Surged after the February Earthquakes and again Following the Escalation of the Conflict in October A. New displacements by governorate, 2023 B. Total new displacements and stock of IDPs, 2016 to 2023 (Thousand per month) (Thousands of people) 120 3,000 7,200 100 2,500 6,800 80 2,000 60 1,500 6,400 40 1,000 6,000 20 500 0 0 5,600 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 2018 2019 2020 2021 2022 2023 Aleppo Deir-ez-Zor Idleb Others New IDPs IDP stock (RHS) Source: Internal Displacement Monitoring Center, https://www.internal-displacement.org/countries/syria; Humanitarian Data Exchange – Office For the Coordination of Humanitarian Affairs (OCHA), Syrian Arab Republic: IDP Movements and IDP Spontaneous Return Movements Data – Humanitarian Data Exchange (humdata.org). 4 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE and experienced temporary displacement within their displaced, including 7.2 million IDPs and 6.7 million own communities,10 while more than 100,000 people refugees abroad (Figure 4B).12 were recorded as Internally Displaced Persons (IDPs) by having been forced to migrate to other regions 10 See World Bank, 2023. Syria Economic Monitor: within Syria (Figure 4A). While fewer displacements The Economic Aftershocks of Large Earthquakes. occurred between May and August due to a lower Washington, D.C: World Bank Group. http://documents. intensity of fighting, clashes between the SDF and worldbank.org/curated/en/099540309012311026/ tribal groups as well as the Turkish military offensive in IDU0a8823acd034ac04efd0abc20842c479023f4. September displaced more than 20,000 people in the 11 Agence France Press. 2023. “As aid runs out, Syria’s displaced fear dying of hunger.” The Jordan Times, Deir-ez-Zor governorate alone. The government-led December 7, 2023. https://www.jordantimes.com/news/ offensive in Idleb in October 2023 displaced an addi- region/aid-runs-out-syrias-displaced-fear-dying-hunger tional 120,000 people.11 As of the end of 2023, more 12 UNHCR’s Refugee Population Statistics Database unhcr. than half of Syria’s pre-conflict population remained org/refugee-statistics/download/?url=fNlG45. Conflict Context 5 2 RECENT ECONOMIC DEVELOPMENTS The dire economic situation has shocks, including spillover effects from economic continued to worsen crises in neighboring Lebanon and Turkiye starting in late 2019, the COVID-19 pandemic and subsequent A decade of conflict has devastated the Syrian cholera outbreak, the spike in global commodity economy. According to official statistics, Syria’s prices following the war in Ukraine, the February 2023 gross domestic product (GDP) shrank by 54 percent earthquakes in Syria and Turkiye, and more recently, between 2010 and 2021. The impact of the conflict the increased attacks and trade disruptions related to is likely much larger according to the nighttime light the ongoing Middle East conflict. (NTL) data, which offer a more timely, granular (with NTL analysis indicates a decrease in readily available spatial information), comprehensive economic activity in 2023 by 1.2 percent (covering all of Syria’s territory), and potentially more year-on-year (yoy), concentrated in northeastern reliable means of tracking overall economic activity at and western Syria. In the absence of statistics on both the aggregated and sectoral level compared to regional economic output, typically measured as official estimates. A quantitative analysis of the relation- regional GDP, NTL analysis allows for an understand- ship between NTLs and economic activity indicates a ing of the spatial dynamics of economic activity in sharper 84 percent contraction in economic activity Syria.14 For example, in recent years, economic activ- from 2010 to 2023 (Figure 5A). However, an analysis of nighttime gas flaring data indicates significantly higher 13 The amount of gas flared for a given quantity of oil oil and gas output than official estimates, possibly extracted is largely influenced by the technology indicating growth in informal and illicit economic activ- employed and the geological properties of the oil ity within the energy sector since the outbreak of war, fields. Should less be invested to mitigate gas flaring after the start of the conflict, there might be an which is not captured in official statistics (Figure 5B).13 increase in nighttime gas flaring for a given level of oil The conflict has weakened Syria’s capacity production. to absorb external economic shocks. In recent 14 The spatial dimension of developments takes on a years, the economy has faced multiple external critical dimension in FCV contexts: averaging across 7 FIGURE 5 • Syria’s Economic Activity Has Significantly Contracted since the Start of the Conflict A. Real GDP B. Real oil GDP C. Real non-oil GDP (2010=100) (2010=100) (2010=100) 120 160 120 140 100 100 120 80 80 100 60 80 60 60 40 40 40 20 20 20 0 0 0 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Conventional GDP Conventional oil GDP Conventional non-oil GDP NTL-based GDP estimates NTL-based oil GDP estimates NTL-based non-oil GDP estimates Source: National Aeronautics and Space Administration (NASA)’s Black Marble nighttime lights product suite and Defense Meteorological Satellite Program (DMSP) satellites; World Development Indicators (WDI); Syria Central Bureau of Statistics; World Bank staff estimates. Note: The NTL data from 2000 to 2012 is obtained from DMSP, while data from 2014 to 2023 is sourced from NASA’s Black Marble. For the year 2013, figures are derived by averaging NTL data from BM and DMSP. Estimations for NTL-based oil GDP utilize Syria's pre-conflict coefficient between flaring NTL and oil GDP, calculated at 1.24 through linear regression, and 2011–2022 flaring NTL data to predict post-conflict oil GDP. Estimations for NTL-based non-oil GDP utilize Syria's pre-conflict coefficient between non-flaring NTL and non-oil GDP, calculated at 1.49 through linear regression, and 2011–2022 non-flaring NTL data to predict post-conflict non-oil GDP. NTL-based GDP estimates are then derived by summing the NTL- based oil GDP estimates and NTL-based non-oil GDP estimates, weighted by the proportion of oil GDP in the total GDP. FIGURE 6 • Nighttime Light Data Indicate a Decline in Economic Activity in 2023, Concentrated in Northeastern and Western Syria Source: Satellite images from NASA’s Black Marble; World Bank staff estimates. Note: Nighttime light emissions are commonly used as a proxy for overall economic activity. ity has fallen significantly in the port cities of Lattakia areas of the country can be highly misleading as conflict and Tartous, in part due to the halved international intensity varies widely across time and space, which in trade activity since 2019 (see Section III.B), as well turn generates a large heterogeneity of economic and as in Damascus, the capital. In 2023, economic social conditions across time and space. 8 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE FIGURE 7 • Gas Flaring Nighttime Light Data Indicates a Decrease in Syria’s Oil Production in 2023 Source: Satellite images from NASA’s Black Marble; World Bank staff estimates. Note: Nighttime lights in gas flaring locations are considered as a proxy for oil production or oil GDP. activity continued to decline in the same areas, ated in October 2023, caused significant damage alongside a significant decrease in northeast Syria to critical infrastructure, services, and resources in related to reduced oil production (further detailed in Syria’s northeastern region, including over half of the next paragraph). Meanwhile, an increase in NTL the Kurdish-held power plants and oil infrastructure, emissions in the severely affected northwest may further affecting oil production.16,17 reflect disaster-relief efforts following the February Following the near-historical low in 2022, earthquakes. agricultural production rebounded in 2023 amid Nighttime gas flaring data points to a improved weather conditions. Official statistics decrease in oil production in 2023 of 3.5 percent indicate a doubled wheat harvest for 2023, yielding yoy, partly due to earthquake- and conflict-related 2 million metric tons compared to the previous year’s infrastructure damage. As a result, oil production in Syria has fallen from 383 thousand barrels a day in 2010 to 90 thousand barrels a day in 2023, according 15 Syria TV. 2023. “Tanker Convoy Enters SDF Areas to to the US Energy Information Administration. While Transport Oil to Regime.” The Syrian Observer, October production was already in decline before the conflict 20, 2023. https://syrianobserver.com/news/85738/ due to aging oil fields, the war has sharply accelerated tanker-convoy-enters-sdf-areas-to-transport-oil-to-regime. the fall. The Syrian Democratic Forces, in collaboration html. with international coalition forces, currently control the 16 El Husseini, Rouba. 2023. “Turkey destroying NE Syria oil, power facilities: Kurds.” Al Monitor, October 11, majority of oil fields in the northeastern Deir-ez-Zor 2023. https://www.al-monitor.com/originals/2023/10/ and Hasakeh governorates, which account for over turkey-destroying-ne-syria-oil-power-facilities-kurds. 85 percent of Syria’s oil production, according to the 17 This includes the power generation of the Rumeilan nighttime gas flaring data,15 showcasing a 6 percent Company, the operator of Syria’s largest oil fields, contraction in oil production in 2023 (Figure 7C). In dealing a blow to the energy-dependent economy of February 2023, the earthquake inflicted physical the northeast and leading to fuel shortages. The Syria Report. 2023. “Turkey and Damascus’ Retaliatory damage on the Banias refinery, Syria’s largest refin- Attacks Destroy Critical Civilian Infrastructure in the ery, coupled with electricity outages and disrupted North.” October 11, 2023. https://syria-report.com/ supply chains, negatively impacting oil production turkish-and-damascus-retaliatory-attacks-destroy-critical- and processing. Turkiye’s bombing campaign, initi- civilian-infrastructure-in-the-north/. Recent Economic Developments 9 FIGURE 8 • Remote Sensing Vegetation Indices Suggest Enhanced Crop Yields in 2023, Largely due to Improved Weather Conditions A. Normalized Difference Vegetation Index (NDVI) and precipitation B. Syria, Standardized Anomaly in croplands, 2023 compared (Daily average in a year; millimeter; cropland during growing cycle) to 2012–2022 1.0 20 0.8 18 0.6 16 14 0.4 12 0.2 10 0.0 8 –0.2 6 –0.4 4 –0.6 2 –0.8 0 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 NDVI – zscore Rainfall (RHS) Source: U.S. Geological Survey (USGS)/Moderate-Resolution Imaging Spectroradiometer (MODIS), Vegetation Indices; World Bank staff estimates. Note: (A) NDVI is a satellite-derived proxy of vegetation status, which represents agricultural production to some extent. (B) Enhanced vegetation indices (EVI) standardized anomaly is a dimensionless measure that accounts for variations in the mean and standard deviation of the time series data, allowing for a more robust comparison of anomalies across different time periods. The map only shows the crop yield conditions at croplands. 1 million metric tons.18 This sharp improvement is from US$8.8 billion in 2010 to US$0.7 billion in 2022, confirmed by remote sensing vegetation indices, with oil exports accounting for the largest drop in trade which surpassed the levels of both the previous year activity (Figure 12A). Imports have also contracted since and the 2011–2022 average, signifying a healthier the onset of conflict, albeit less sharply than exports. vegetation cover and better agricultural conditions Imports have declined from US$17.5 billion in 2010 to (Figure 8). This improvement, particularly notable in US$3.2 billion in 2023, according to official data, and the northeastern region, can be attributed to favor- from US$18.8 billion in 2010 to US$4.8 billion in 2022, able weather patterns, including increased rainfall levels between March and May 2023.19 Neverthe- less, the protracted conflict has resulted in damage 18 The wheat yield, reflecting combined announced to infrastructure and irrigation systems, along with yields from the Syrian government, the Autonomous disruptions in land utilization, persistently hindering Administration of North and East Syria (AANES), agricultural production (Box 1). the Syrian Salvation Government (SSG), and the Syrian Interim Government (SIG), saw increases from 500,000 to 760,000 tons, from 320,000 to 1,000,000 tons, from 23,300 to 50,000 tons, and from 13,900 to Trade activity remains weak 50,000 tons, respectively, between 2022 and 2023. Crisis Analysis – Syria. 2024. “2023 Syria in Review – Conflict-related disruptions have driven a collapse Humanitarian Report.” February 2024. https://ca-syr. of foreign trade since 2011. According to the Cen- org/report/2023-syria-in-review. 19 FAO, FSC, iMMAP Inc, and WFP. 2023. “Wheat to tral Bank of Syria (CBS), goods exports shrank from Bread Market Assessment Part 2 – Northeast Syria – US$8.8 billion in 2010 to US$1.0 billion in 2023. Mirror August 2023.” ReliefWeb, September 13, 2023. https:// statistics from the UN Comtrade database for other reliefweb.int/report/syrian-arab-republic/wheat-bread- countries’ reported imports from Syria show a decline market-assessment-part-2-northeast-syria-august-2023. 10 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE EVIDENCE THAT THE CONFLICT PERSISTENTLY WEAKENED AGRICULTURAL PRODUCTION BOX 1:  IN SYRIA The protracted conflict in Syria has severely affected the agriculture sector. While the drought in the late 2010s already pushed a notable share of laborers out of the agriculture sector, widespread violence has led to displacement and forced many farmers to abandon their lands, leading to a continued decline in agricultural employment since the conflict (Figure 9A). Moreover, the conflict inflicted extensive damage to infrastructure and irrigation systems. Since the conflict began, Syria has seen a 25 percent decrease in irrigated cropland compared to 2010, with the proportion of irrigated cropland to total cropland falling from 24 to 17 percent, despite no substantial change in overall cropland area (Figure 9B). The conflict has also made it difficult for farmers to access essential inputs for crop cultivation, including seeds, fertilizers, pesticides, fuel, and spare parts for machinery, further reducing agricultural production. Figure 9C underscores a noteworthy decline in fertilizer consumption over the past decade, with Syria nearly halting its use from 2015 to 2021. A direct comparison with Turkiye’s agricultural sector underscores the decline in cropland yields in Syria. Since the start of the conflict, cropland yields between Syria and Turkiye have diverged significantly, despite having similar climatic conditions. Regions near the Syria- Turkiye border have experienced comparable rainfall and temperature patterns (Figure 11A and Figure 11B). Yet, the disparity in yield has been widening, especially during the conflict (Figure 11C). Empirical analysis suggests a significant decline in Syrian cropland yields is attributable to the Syrian conflict.a Controlling for climate conditions like temperature, rainfall, solar radiation, and water satisfaction, the Difference-in-Difference (DID) regression model shows that, after the Syrian conflict, Syria’s crop yield, as proxied by remote sensing vegetation indices, averaged 8.8 to 11.5 percent lower compared to regions in Turkiye along the same border area (Table 1). Irrigated cropland area decreased during the Syrian conflict FIGURE 9 •  A. Agricultural employment B. Cropland and irrigated land C. Fertilizer consumption (Thousand people; % of total employment) (1000 ha; % of cropland) (Kilograms per hectare of cropland) 1,600 35% 5,800 30% 100 1,400 5,750 90 30% 25% 5,700 1,200 80 25% 5,650 20% 1,000 5,600 70 20% 800 5,550 15% 60 15% 5,500 600 10% 50 10% 5,450 400 5,400 40 5% 5% 200 5,350 30 0 0% 5,300 0% 20 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 10 Agricultural employment Cropland Share of agricultural Irrigated land 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 employment (RHS) (% of cropland) (RHS) Source: Food and Agriculture Organization of the United Nations Statistics Department (FAOSTAT); World Development Indicators; Central Bureau of Statistics of Syria; World Bank estimates. Note: The irrigated cropland area in Syria refers to the cropland area that is actually irrigated, rather than the land area equipped for irrigation. a To quantify the impact of the Syrian conflict on cropland yields, a DID regression analysis spanning the period from 2002 to 2022 was employed, utilizing NDVI as a proxy for crop yields: log(NDVI)it = a + q . Syriai . PostConflictt + b . Xit + mi + lt + eit, where log(NDVI)it is the NDVI for cropland during growing cycles in region i at month t. Syriai takes a value of one if i is a region belonging to Syria and zero otherwise. PostConflictt takes a value for one if t is equal or greater than 2011 and zero otherwise. Xit is a vector of time-varying meteorological variables and their quadratic terms, including temperature, rainfall, solar radiation, and water satisfaction index. mi represents region-fixed effects, capturing time-invariant factors like agronomic suitability. lt denotes time fixed effects. eitis the random error term. The coefficient of interest q measures the impact of conflict on cropland yields. (continued on next page) Recent Economic Developments 11 EVIDENCE THAT THE CONFLICT PERSISTENTLY WEAKENED AGRICULTURAL PRODUCTION BOX 1:  IN SYRIA (continued) FIGURE 10 • Cropland Areas along the Syria-Turkiye Border Source: Google Earth https://earth.google.com/; World Bank estimates. Note: The empirical analysis covers 20 regions near the Syria-Turkiye border, including 8 Syrian areas (Aleppo, Deir-ez-Zor, Hama, Al-Hassakeh, Idleb, Lattakia, Raqqa, Tartous) and 12 Turkish areas (Adiyaman, Batman, Diyarbakir, Gaziantep, Hatay, K.maras, Kilis, Mardin, Osmaniye, Sanliurfa, Siirt, Sirnak). FIGURE 11 • During the Conflict, Cropland Yields between Syria and Turkiye have Significantly Diverged despite Similar Climatic Conditions A. Temperature B. Rainfall C. Yield (°C) (mm) (1000 kg/ha) 25 25 1,600 1,400 20 20 1,200 15 15 1,000 800 10 10 600 400 5 5 200 0 0 0 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Syria Turkiye Source: FAOSTAT; Anomaly Hotspots of Agricultural Production (ASAP); World Bank estimates. (continued on next page) using UN Comtrade mirror statistics (Figure 12B).20 Arab 20 These figures should be treated with caution, as the countries have become more important trade partners imposition of sanctions in Syria may have prompted evasion strategies, resulting in a larger portion of trade for Syria since the start of the conflict, accounting for going unreported. Therefore, the contraction in trade over 60 percent of its goods exports and 20 percent of activity after the conflict could be smaller than indicated good imports between 2011 and 2022, in contrast to by the mirror trade statistics. 12 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE EVIDENCE THAT THE CONFLICT PERSISTENTLY WEAKENED AGRICULTURAL PRODUCTION BOX 1:  IN SYRIA (continued) TABLE 1 • The Impact of the Syrian Conflict on Syrian Cropland Yields (1) (2) (3) (4) log(NDVI) log(NDVI) log(NDVI) log(NDVI) VARIABLES Cropland Cropland Cropland in growing cycle Cropland in growing cycle Syria * PostConflict –0.0881*** –0.0791** –0.115*** –0.111*** (0.0279) (0.0289) (0.0304) (0.0312) Temp 0.0583*** 0.0324** (0.0140) (0.0115) Temp_Square –0.00117*** –0.000269 (0.000371) (0.000275) Rainfall 0.00612*** 0.00998*** (0.00200) (0.00236) Rainfall_Square –4.86e–05*** –5.44e–05*** (1.35e–05) (1.37e–05) Constant –1.194*** –1.315*** –0.998*** –1.342*** (0.00639) (0.374) (0.00696) (0.423) Region fixed effect Yes Yes Yes Yes Time fixed effect Yes Yes Yes Yes Observations 5,040 5,040 5,040 5,040 R-squared 0.854 0.889 0.780 0.809 Source: World Bank estimates. Note: Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1. Column 1 and column 2 represent all areas with crops. Column 3 and column 4 are restricted to those areas with crops that are inside the growing cycle, thereby excluding agricultural areas where no vegetation is growing. Column 2 and column 4 are controlled for meteorological variables such as temperature, rainfall, solar radiation, and water satisfaction, whereas column 1 and column 3 do not. All columns are controlled for region- fixed effects and time-fixed effects. FIGURE 12 • Syria’s Trade in Goods Has Dropped Since the Start of the Conflict A. Gross goods exports B. Gross goods imports (Billion US$) (Billion US$) 10 20 9 18 8 16 7 14 6 12 5 10 4 8 3 6 2 4 1 2 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Textiles Agriculture Stone Minerals Metals Chemicals Vehicles Machinery Electronics Other Source: UN Comtrade database; World Bank staff estimates. Note: The analysis relies on mirror trade statistics obtained from Syria’s trading partners. Import data for Syrian crude oil, categorized under minerals, between 2012 and 2022 is not available in the UN Comtrade database. Estimates for Syria's oil imports from 2012 to 2018 are sourced from the Energy Information Administration (EIA). From 2019 to 2022, Syria's oil imports are estimated based on imports from Iran, obtained from TankerTrackers.com and the United Against Nuclear Iran organization. Recent Economic Developments 13 FIGURE 13 • Arab Countries have Become More Significant Trade Partners A. Syria’s goods exports to Arab countries B. Syria’s goods imports from Arab countries (Share in total, %) (Share in total, %) 80% 35% 70% 30% 60% 25% 50% 20% 40% 15% 30% 10% 20% 10% 5% 0% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: UN Comtrade database; World Bank staff estimates. Note: “Arab countries” refers to Algeria, Bahrain, the Comoros Islands, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Mauritania, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Tunisia, the United Arab Emirates, and Yemen. The analysis uses mirror trade statistics from Syria’s trading partners. FIGURE 14 • Maritime Data Indicate a Further Decrease in Trade Activities in 2023 A. Port calls B. Deadweight tonnage (Number of port visits per month, all vessel categories) (Daily average per month, all vessel categories) 35 Earthquake Middle 8,000 Earthquake Middle East East 30 Conflict 7,000 Conflict 6,000 25 5,000 20 4,000 15 3,000 10 2,000 5 1,000 0 0 2016 2017 2018 2019 2020 2021 2022 2023 Jan-2023 Feb-2023 Mar-2023 Apr-2023 May-2023 Jun-2023 Jul-2023 Aug-2023 Sep-2023 Oct-2023 Nov-2023 Dec-2023 2016 2017 2018 2019 2020 2021 2022 2023 Jan-2023 Feb-2023 Mar-2023 Apr-2023 May-2023 Jun-2023 Jul-2023 Aug-2023 Sep-2023 Oct-2023 Nov-2023 Dec-2023 Exports Imports Source: UN Comtrade Monitor https://comtrade.un.org/data/ais; World Bank staff estimates. 21 percent and 12 percent, respectively, from 2000 to fication System (AIS) provides a good indication of 2010 (Figure 13A and Figure 13B). trade activity in Syria, given its heavy reliance on Estimates from maritime microdata indi- maritime transport for trade operations.21 Import cate a decrease of around 10 percent in trade activity in 2023 (Figure 14A and Figure 14B). 21 According to the World Trade Organization (WTO), Maritime data obtained from the Automatic Identi- for Syria, 74.6 percent of imports and 26.8 percent of 14 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE volumes surged briefly after the February earth- Israeli airstrikes on Syria’s main airports in quake, likely due to increased humanitarian aid October 2023 caused significant disruptions in air and support imports, but have declined since November 2023 as the Red Sea shipping crisis exports, respectively, were carried by sea in 2011. See: severely disrupted global trade and supply chains, World Trade Organization. 2023. “Trade Profiles 2023.” particularly in the Middle East.22 Export levels have https://www.wto.org/english/res_e/statis_e/daily_ remained low throughout the year, likely the result update_e/trade_profiles/SY_e.pdf. of the ongoing conflict and international sanctions. 22 Since November, the Houthis, in solidarity with Gaza, have intensified attacks on ships in the Bab al-Mandab Even after accounting for possible underreporting and Red Sea, disrupting global trade. These attacks (vessels often turn off their AIS trackers near Syrian have diverted traffic away from the Suez Canal, leading waters), trade activity appears to remain on a declin- to delays and increased costs as ships are forced to ing trend (Box 2). navigate around the tip of Africa. BOX 2: MONITORING UNRECORDED VESSEL ACTIVITY IN SYRIA Unrecorded maritime trade, particularly for oil tankers, is prevalent for Syria, accounting for 45 percent of total estimated Syrian port visits in 2023. In 2011, the United States (US) and European Union (EU) imposed sanctions on the Syrian government, severely restricting its trade in specific goods, technologies, equipment, and petroleum products. Since then, sanctioning countries have also penalized entities and individuals facilitating deliveries and transactions to the Syrian government. To evade detection, some importers disable tracking devices known as the Automatic Identification System (AIS) on inbound ships near the Syrian ports.a Vessels continue to deploy deceptive practices by obfuscating the destination and recipient of oil shipments in the Mediterranean Sea ultimately destined for Syria, according to the US Department of the Treasury.b Measuring the number of detected AIS disabling events helps give an indication of the scale of unrecorded trade. FIGURE 15 • Unrecorded Maritime Trade, Particularly for Oil Tankers, is Prevalent A. Total port visits, including potential B. Total port visits by vessel type, C. Examples of disabling events headed disabling events 2019–2023 in total toward Syria 800 700 1,706 600 143 Non-tankers 618 131 128 500 78 234 57 42 400 162 143 42 300 39 463 37 200 410 401 Tankers 89 256 218 100 19 0 2019 2020 2021 2022 2023 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Disabling signals near Syrian waters, Recorded port visits potentially stopping at Syrian ports Disabling signals near Syrian waters, Disabling signals near Syrian waters, potentially stopping at Syrian ports headed towards Syrian ports Disabling signals near Syrian waters, Recorded port visits headed towards Syrian ports Source: Authors calculations using AIS data from the UN Global Platform. Note: The Syrian Exclusive Economic Zone (EEZ) is based on the Marine Region (https://www.marineregions.org/gazetteer.php/gazetteer.php?p=details&id=8373). The boundary is simplified for easier processing. The map is drawn using https://geojson.io/. The AIS data available on the UN Global Platform is provided by ExactEarth, which combines their own satellite data with terrestrial data from Fleetmon. The dataset encompasses both real-time data and archived global data, starting on December 1, 2018. This study examines port visits near the Syrian ports of Tartous, Latakia, and Baniyas. (continued on next page) Recent Economic Developments 15 BOX 2: MONITORING UNRECORDED VESSEL ACTIVITY IN SYRIA (continued) AIS data from the UN Global Platform shows 960 routes featuring disabling events in proximity to Syrian waters from 2019 to 2023. A “disabling event” refers to the disappearance of AIS signals lasting over 24 hours within the Syrian Exclusive Economic Zone (EEZ), yet with no captured record of visiting a Syrian port. Some 253 vessels headed to Syrian ports appear to have disabled AIS signals before reaching their destination, while an additional 707 vessels may have disabled AIS near the Syrian coast, potentially stopping at Syrian ports. Accounting for the potential visits of ships disconnecting their AIS signals near Syrian waters, the total port visits to Syria from 2019 to 2023 could be as high as 2,708, compared to 1,748 recorded visits. Likely owing to the sanctions imposed on Syria and its primary crude oil supplier, Iran,c the disabling events are particularly significant for oil tankers, which may have visited Syrian ports 150 times between 2019 and 2023, compared to the recorded 42 port visits. AIS-disabled vessels fit a broader pattern of declining Syrian trade volumes. Total port visits, accounting for the potential disabling events (i.e., assuming 100 percent of the ships with disabled AIS visited a Syrian port), show a declining trend from 2019 to 2023. However, within that downward trend in total port visits, the share of disabling events has grown noticeably, from 32 percent in 2019 to 45 percent in 2023. a “Ships are supposed to keep their AIS trackers on, but vessels wanting to hide their movements often turn theirs off. Those heading to Syrian ports routinely do so”, according to the article by Gambrell, Jon. 2022. “Satellite images show first ship out of Ukraine in Syria.” Financial Post, August 16, 2022. https://financialpost.com/pmn/business-pmn/ satellite-images-show-first-ship-out-of-ukraine-in-syria b Department of the Treasury. 2019. “OFAC Advisory to the Maritime Petroleum Shipping Community.” March 25, 2019. Washington, D.C. 20220. https://ofac.treasury.gov/ media/16486/download?inline c Iranian vessels engage in the practice of switching off their AIS signal worldwide, with this practice being more pronounced in Iran’s main export destinations like China than in other locations such as Syria. Shaar, Karam. 2019. “The Syrian Oil Crisis: Causes, Possible Responses, and Implications.” Middle East Institute, August 27, 2019. https://www.mei. edu/publications/syrian-oil-crisis-causes-possible-responses-and-implications. travel and humanitarian aid operations. Despite a since 2020 and have nearly doubled by 2023. Syria’s temporary increase in flights after the February 2023 reliance on food imports, although already an issue earthquake, a reduction in flights has been observed prior to 2011, has also intensified with the conflict since August, coinciding with an escalation in conflict. From October, recurrent Israeli strikes on Syrian airports, Israel’s Airstrikes on Syria’s Main FIGURE 16 •  Airports Severely Disrupted particularly Damascus International Airport, Syria’s Air Travel busiest passenger and international flight airport, as well as Aleppo International Airport, have inflicted dam- A. Flight activity by airport (Number of flight arrivals and departures, monthly average) age on runways and caused substantial disruptions to 800 Earthquake Middle East air travel and logistics.23 Flights destined for Damascus Conflict and Aleppo have been rerouted to the smaller Latakia 700 airport. Overall flights declined by 42 percent between 600 the third and fourth quarters of 2023, with levels in 500 March 2024 still below those observed before the ongo- 400 ing conflict in the Middle East (Figure 16). A collapse in domestic industrial and agri- 300 cultural output increased Syria’s dependence 200 on imports. Once the largest oil exporter in the 100 eastern Mediterranean, Syria has now turned into an oil importer due to a sharp decline in oil production 0 2019 2020 2021 2022 2023 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 since the start of the conflict (Figure 17A). Oil imports, primarily sourced from Iran, have steadily increased Damascus International Airport Aleppo International Airport 23 The Syria Report. 2023. “Israeli Strikes Halt U.N. Latakia Bassel Al-Assad International Airport Humanitarian Air Service.” November 7, 2023. https://​ Total Flights syria-report.com/israeli-strikes-halt-u-n-humanitarian-air​ -service/. Source: RadarBox, https://www.radarbox.com; World Bank staff estimates. 16 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE FIGURE 17 • Syria Has Relied Heavily on Imports of Essential Commodities since the Conflict A. Crude oil B. Cereals (Million barrels) (Million US$) 100 1,200 1,000 50 800 0 600 –50 400 200 –100 0 –150 –200 –200 –400 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Imports Exports Net Imports Source: EIA; UN Comtrade; World Bank staff estimates. Note: (a) Syria’s oil imports during 2000–2018 are estimates from EIA. For the period 2019–2023, Syria’s oil imports are estimated based on imports from Iran, sourced from TankerTrackers.com and the United Against Nuclear Iran organization. (b) Syria’s cereal trade data is derived from mirror trade data provided by UN Comtrade. The SITC code 04, representing “Cereals and cereal preparations”, is used to calculate imports and exports of Syrian cereals, including various types such as wheat and meslin, rice, barley, maize, cereals, meal and flour of wheat and flour of meslin, other cereal meals and flours, and cereal preparations and preparations of flour of fruits and vegetables. (Figure 17B). Between 2011 and 2023, imports sup- capital flight and reduced remittances, have further plied nearly half of domestic oil consumption and fueled the depreciation of the Syrian pound. Since about one-third of cereal consumption. 2020, the Syrian pound has lost over 90 percent of its value against the US dollar in the parallel market. In 2023, the average market price of the Currency depreciation and consumer Syrian pound recorded a substantial 141 percent price inflation are persistently high depreciation against the US dollar. Both the February earthquakes and the onset of the Middle The Syrian pound has continuously depreciated East conflict in October fueled the Syrian pound’s since 2011 due to the conflict, sanctions, and depreciation. Throughout 2023, the Central Bank political developments. The official exchange rate of of Syria devalued the official exchange rate multiple the Syrian pound declined 270-fold against the US dol- times, although it remained consistently below the lar between 2011 and 2023, reaching 12,562 Syrian prevailing market rate (Figure 19A). Pound (SYP)/United States Dollar (USD) compared Currency depreciation has fueled high to 47 SYP/USD in 2011. The market exchange rate inflation. Consumer price inflation, as proxied by registered a 300-fold depreciation, reaching 14,122 the WFP minimum food basket price index, recorded SYP/USD (Figure 18A). The depreciation of the Syr- a relatively modest rise after the February 2023 ian pound gained momentum with the start of the earthquakes, due in part to increased food aid in Lebanese currency crisis in late 2019, which is not sur- prising given close commercial and trade ties between 24 See World Bank, 2022. Syria Economic Monitor: Lost Lebanon and Syria and Syrians’ reliance on Lebanese generation of Syrians. Washington, D.C: World Bank banks for commercial and personal transactions.24 Group. http://documents.worldbank.org/curated/en/099​ A deteriorating economic situation and the imposition 335506102250271/IDU06190a00a0d128048450a4660a​ of new US sanctions in mid-2020 that encouraged e3b937ae4bd. Recent Economic Developments 17 FIGURE 18 • Syria Has Seen Frequent Periods of High Inflation and Rapid Depreciation since 2011 A. Official and parallel market exchange rates in Syria B. Inflation and exchange rate in Syria (SYP/US$) (yoy percent) 16,000 350 14,000 300 250 12,000 200 10,000 150 8,000 100 6,000 50 4,000 0 2,000 –50 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 CPI inflation – yoy growth (%) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 CPI inflation: food – yoy growth (%) WFP food basket prices – National Average – yoy growth (%) Official exchange rate Parallel market exchange rate SYP Market exchange rate – yoy growth (%) Source: https://www.karamshaar.com/official-and-black-market-tracker; World Food Programme (WFP) Syria Price Database; Central Bureau of Statistics, Syria; World Bank staff estimates. Note: The Central Bank of Syria publishes multiple official exchange rates, each of which applies to specific transactions. One of these state-sanctioned rates is the “Official Market Rate”, which was introduced in August 2023. The series presented prior to this date was known as the “Official Foreign Exchange Quotations”. Rapid Currency Depreciation and High Levels of Consumer Price Inflation Persisted FIGURE 19 •  throughout 2023 A. Official and parallel market exchange rates in Syria B. WFP minimum food basket prices (SYP/US$) (SYP) 16,000 1,000,000 Middle East Conflict Middle East Conflict 14,000 900,000 12,000 800,000 10,000 Earthquake 600,000 8,000 Earthquake 500,000 6,000 400,000 4,000 300,000 2,000 200,000 0 100,000 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 0 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Official exchange rate Parallel market exchange rate Source: https://www.karamshaar.com/official-and-black-market-tracker; World Food Programme (WFP) Syria Price Database; World Bank staff estimates. Note: The Central Bank of Syria publishes multiple official exchange rates, each of which applies to specific transactions. One of these state-sanctioned rates is the “Official Market Rate”, which was introduced in August 2023. The series presented prior to this date was known as the “Official Foreign Exchange Quotations”. the wake of the disaster. However, inflation has 25 The government’s August 2023 decisions to increase oil increased dramatically since July 2023, reflecting prices resulted in significant hikes: subsidized 90-octane the combined impact of a significant local currency petrol rose to SYP 8,000 (a 167 percent increase), devaluation and the cuts in fuel subsidies.25 For 2023 unsubsidized 95-octane to SYP 14,700 (a 47 percent 18 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE as a whole, consumer price inflation, as proxied by Syria’s fiscal budget shrinks further the WFP minimum food basket price index, surged by 115 percent. Fiscal revenues continue to decline as the econ- Prices have increased at varying rates omy slows.27 Adjusted for consumer price inflation, across regions. Food basket prices in northeast the budgeted fiscal revenues witnessed an annualized Syria’s self-administration areas, an important food 35 percent decrease in real terms in 2023 compared and energy production zone, remain the lowest to 2022 and an 85 percent drop compared to the pre- in the country, in contrast to the highest prices in conflict levels of 2010 (Figure 21A). This substantial Syrian government-controlled areas. Persistent price disparities partly stem from the ongoing conflict, which significantly elevates the cost of increase), and subsidized mazout to SYP 2,000 internal trade between regions. In the second half (a 186 percent increase), impacting transportation and production costs and exacerbating the overall cost of living, of 2023, heightened security instability, particularly particularly affecting winter heating expenses. The Syria in Deir-ez-Zor, led to the suspension of fuel and food Report. 2023. “Protests in Southern Syria Revive Political smuggling operations across the Euphrates River and Economic Demands of 2011 Uprising.” August 29, from self-administration to government-held areas, 2023. https://syria-report.com/protests-in-southern-syria- exacerbating price disparities.26 By December 2023, revive-political-and-economic-demands-of-2011-uprising/. the disparity between maximum and minimum food 26 Crisis Analysis – Syria. 2023. “September ’23 Monthly Report.” https://ca-syr.org/periodical/september-2023​ basket costs across zones of control had widened to -monthly-report. 48 percent, up from 40 percent in the previous year 27 The fiscal data pertains to the Central Government in (Figure 20A). Persistent price disparities are also Damascus and excludes all taxes, transfers, and expenses evident across governorates (Figure 20B). incurred by the autonomous region in northeastern Syria. FIGURE 20 • Disparities in Food Basket Prices within Syria Widened in 2023 A. Food basket price by actor type B. Food basket price by governorate (SYP thousands) (SYP thousands) 1,400 1,600 1,200 1,400 1,000 1,200 800 1,000 600 800 400 600 200 400 0 200 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 0 Government and allied forces Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Non-state armed groups (opposition) Syrian democratic forces Turkish armed forces and national army Overall Average Source: WFP Syria Price Database https://dataviz.vam.wfp.org/economic_explorer/prices?adm0=238; WFP Syria Market Price Watch Bulletin; World Bank staff estimates. Note: (a) The standard food basket is a group of essential food commodities. In Syria, the food basket is set at a group of dry goods providing 2,060 kcal a day for a family of five during a month. The basket includes 37 kg of bread, 19 kg of rice, 19 kg of lentils, 5 kg of sugar, and 7 liters of vegetable oil. (b) The zones of control are based on OCHA data as of July 10, 2022. Recent Economic Developments 19 FIGURE 21 • Syria’s Fiscal Budget Has Continuously Shrunk since the Start of the Conflict A. Fiscal budget B. The composition of the budgeted spending (SYP millions, CPI=100 for 2020; percent of nominal GDP) (Share) 10 30% 100% 9 90% 8 25% 80% 7 70% 20% 6 60% 5 15% 50% 4 40% 10% 3 30% 2 5% 20% 1 10% 0 0% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Expenditure Revenues Fiscal deficit Current spending Investment spending Source: Central Bureau of Statistics of Syria; Central Bank of Syria; World Bank staff estimates. decrease can be attributed to disruptions across eco- To save on its budget, the government nomic sectors due to ongoing conflict, the collapse of continues to tighten the subsidy programs. In international trade due to sanctions, the expansion of the 2023 state budget, subsidies accounted for the informal economy, and the weakened administra- 19 percent of total budgeted expenditures, a sharp tive collection capacity. Tax revenues have shown decrease from the 42 percent allocated in the 2022 a more pronounced decline compared to overall budget (Figure 22A). In August 2023, the Syrian revenues since the onset of conflict. Although the tax government reduced subsidies by dramatically rais- revenues’ share of the total budgeted revenues has ing the prices of subsidized gasoline, petroleum, increased from 34 percent in 2022 to 43 percent in and pharmaceuticals.28 Further subsidy cuts in late 2023, it remains below the 48 percent observed in 2023 and early 2024 brought prices for subsidized 2010. Oil and mineral-related revenues are estimated to gasoline and diesel close to their respective market have decreased from 26 percent in 2012 to 16 percent prices. (Figure 22B).29,30 The 2024 budget signals a of total budgeted revenues in 2023, as most of Syria’s oil fields are now under the control of the Autonomous 28 Enab Baladi. 2023. “Fuel prices in Syria surged by over Administration of North and East Syria (AANES). 200% in 2023.” December 25, 2023. https://english.en​ In response to the revenue shortfall, abbaladi.net/archives/2023/12/fuel-prices-in-syria-surg​ ed-by-over-200-in-2023/. authorities have further reduced spending, with 29 The Syrian government has raised the prices of both particularly sharp cuts to capital expenditure. subsidized and unsubsidized fuels several times in the Fiscal expenditures, adjusted for the Consumer Price last few months. As of February 2024, Octane 90 sells Index (CPI), decreased by 34 percent in 2023 com- for 11,000 SYP per liter, marking a 267 percent yoy pared to 2022, and by 87 percent compared to 2010. increase, while Octane 95 is priced at 14,110 SYP per Given the urgent needs of the population, current liter, reflecting a 114 percent yoy increase. North Press Agency. 2024. “Syrian government raises prices of fuel spending accounts for most of the budget. In 2023, products amid economic crisis.” February 19, 2024. only 18 percent of the budgeted fiscal expenditures https://npasyria.com/en/111337/. were earmarked for capital expenditures, down from 30 The price of subsidized diesel for vehicles was raised in 44 percent in 2010 (Figure 21B). January 2024 to 11,800 SYP per liter from the previous 20 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE FIGURE 22 • The Syrian Government Continues to Tighten the Subsidy Programs A. Fiscal subsidy B. Prices of oil derivatives (As share of total expenditure) (SYP/L) 45% 16,000 14,000 40% 12,000 35% 10,000 30% 8,000 25% 6,000 20% 4,000 15% 2,000 10% 0 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 5% 0% 2017 2018 2019 2020 2021 2022 2023 2024 Gasoline (subsidized, 90 octane) Diesel (subsidized, transport) Petroleum Agriculture Gasoline (parallel market, 95 octane) Social aid Support for earthquake-affected areas Diesel (parallel market, transport) Source: Central Bureau of Statistics of Syria; Central Bank of Syria; Ministry of Finance (MoF) of Syria; The Syria Report https://syria-report.com/price-of-oil-and-gas-products-in- syria–2011–2021/; World Food Programme (WFP) Syria Price Database; World Bank staff estimates. TABLE 2 • Budgeted Subsidies by Items in Syria (Billion SYP; percent) 2018 2019 2020 2021 2022 2023 2024 Total budgeted subsidies 657 811 373 3,500 5,549 4,937 2,360 Total budgeted subsidies (% of total budgeted expenditures) 21 21 9 41 42 19 7 I. Subsidies on petroleum 275 430 11 2,700 2,700 3,000 2,000 II. Subsidies on agriculture 367 371 347 750 2,799 1,887 235 Wheat and flour 357 361 337 700 2400 1500 0 Sugar and rice / / / / 300 300 0 Yeast 103 Agricultural support fund* 10 10 10 50 50 50 75 Fund for transition to modern irrigation / / / / 22 30 50 Fund for droughts and natural disasters / / / / 27 7 7 III. Support for earthquake-affected areas 75 IV. National fund for social aid** 15 10 15 50 50 50 50 Memorandum items: Total budgeted expenditures 3,187 3,882 4,000 8,500 13,325 16,550 35,500 Source: World Bank estimates using various MoF reports. Note: * Agricultural support fund was established to help farmers cope with rising input prices; ** National Fund for Social Aid offers a variety of social assistance programs to retired soldiers, women, and small businesses. continued trend of subsidy reductions for essential 2,000 SYP per liter set since July 2023. Enab Baladi. 2024. commodities (Table 2). ”.‫ رفع سعر املازوت املدعوم للمركبات عدا آليات النقل‬..‫ “سوريا‬January 3, 2024. Between 2011 and 2023, Syria’s annual https://www.enabbaladi.net/681504/ -‫املازوت‬-‫سعر‬-‫رفع‬-‫سوريا‬ fiscal deficit averaged about 11 percent of GDP. #/‫للمركب‬-‫املدعوم‬ Recent Economic Developments 21 To alleviate the government’s fiscal burden, the by a significant decrease in the latter half.36 For the Ministry of Finance (MoF) has held several rounds entirety of 2023, the FTS recorded US$2.8 billion of Treasury bond auctions since 2020, yet these in total humanitarian funding for Syria, a 5 percent auctions have fallen short of their already modest decrease from the previous year, with allocations of targets, reflecting the public’s lack of confidence in US$2.0 billion to the Humanitarian Response Plan, government institutions and in the country’s overall US$387 million to the Earthquake Flash Appeal, and outlook. With the aim of raising SYP 1,700 billion another US$467 million not directed towards either from 2020 to 2023, only SYP 1,100 billion worth of plan. Only about one-third of the funding needed Treasury bonds were sold. In 2023, Treasury bond for the 2023 Humanitarian Response Plan was auctions raised SYP 353 billion, accounting for only 9 secured, with unmet funding rising dramatically from percent of the fiscal deficit over this period.31 Limited US$2.1 billion in the previous year to US$3.4 billion access to both domestic and international financing (Figure 23B). has compelled the government to predominantly Communities in northern Syria have expe- finance its deficit through Central Bank borrowing, rienced a notable reduction in humanitarian aid which has worsened inflation. access, particularly in food, after the earthquake. Survey data indicates a consistent decline in humani- tarian aid access for residents after March 2023, while Syria continues to face funding internally displaced persons experienced a slight shortfalls and limited access to improvement post-earthquake until June, followed by humanitarian assistance a sudden drop in access for both groups in August (Figure 24A and Figure 24B). Notably, humanitarian The non-renewal of the UNSC-mandated cross- assistance in the form of food has gradually decreased border mechanism in July 2023 resulted in for both residents and IDPs since April (Figure 25A and a decline in cross-border humanitarian aid to northwest Syria. After the February earthquake, Damascus authorized the use of Bab Al-Salameh and 31 The Syria Report. 2023. “Debt Instruments Issued by the Al-Rai, whereas previously only Bab Al-Hawa, autho- Central Bank since 2019.” November 27, 2023. https://​ rized by the UNSC, was used to deliver essential aid syria-report.com/debt-instruments-issued-by-the-central​ from Türkiye to northwest Syria.32 Following the dis- -bank-since-2019/. continuation of the UNSC-mandated cross-border 32 The Syria Report. 2023. “Damascus Renews mechanism on July 11, the UN stopped using Bab Authorisation for Two Northwest Border Crossings, While WFP Warns of Further Cuts.” November 22, 2023. Al-Hawa but continued limited operations through https://syria-report.com/damascus-renews-authorisati​ Bab Al-Salameh. In August, the UN and the Syrian on-for-two-northwest-border-crossings-while-wfp-warns​ government reached a bilateral agreement to resume -of-further-cuts/. UN aid trucks through Bab Al-Hawa, but the border 33 The UN-Syrian government agreement, initially a crossing remained fully suspended until September temporary six-month renewal, was extended on January 19.33,34 In the latter half of 2023, an average of 273 11, 2024, for another six months. 34 The Syria Report. 2023. “Damascus Renews UN aid trucks crossed from Türkiye to northwest Authorisation for Two Northwest Border Crossings, Syria each month—less than half of the preceding While WFP Warns of Further Cuts.” November 22, 2023. six-month average of 565 and significantly below the https://syria-report.com/damascus-renews-authorisati​ monthly average of 776 observed from 2019 to 2022 on-for-two-northwest-border-crossings-while-wfp-warns​ (Figure 23A). -of-further-cuts/. Donor funding immediately increased after 35 Syrian Arab Republic 2023 – Financial Tracking Service. – OCHA https://fts.unocha.org/countries/218/ the earthquake but has steadily declined over summary/2023. time. The UN Financial Tracking Service (FTS)35 data 36 While OCHA FTS captures all reported donor funding for 2023 reveals that around 75 percent of total fund- to the humanitarian response in Syria, the full extent of ing was received in the first half of the year, followed coverage is uncertain. 22 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE Figure 25B). The decline in humanitarian aid access 37 WFP cut food assistance to 2.5 million out of its can be partly attributed to the significant decrease in 5.5 million beneficiaries in July 2023 and announced the end of its general food assistance program across Syria the number of UN humanitarian aid trucks entering in January 2024. See The Syria Report. 2023. “WFP to northwest Syria from Turkiye after the interruption in End its Main Food Assistance Programme in January.” cross-border aid in July, alongside a cut in UN food December 5, 2023. https://syria-report.com/wfp-to-end- assistance during the same month.37 its-main-food-assistance-programme-in-january/. FIGURE 23 • Donor Funding, which Increased Immediately Post-Earthquake, Has since Gradually Declined A. Cross-border humanitarian aid trucks and funding to Syria B. Funding to Syria, requirements and response (Monthly average) (Billion US$) 1,200 Earthquake 500 $4 UN Aid Suspension 450 1,000 400 $3 350 800 # of aid trucks 300 Million $US 600 250 $2 200 400 150 $1 100 200 50 0 0 $0 2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Humanitarian Response Plan (HRP) Earthquake Flash Appeal Trucks Funding (RHS) Funding not towards a plan Unmet funding for HRP Source: Financial Tracking Service, OCHA; https://response.reliefweb.int/turkiye-cross-border; World Bank staff estimates. Note: Funding encompasses both incoming commitments and paid allocations, whether directed towards designated plans or external to plans. According to OCHA, a commitment is a contractual agreement between the donor and the appealing organization/recipient. Meanwhile, a paid contribution denotes the actual transfer of funds or in-kind goods from the donor to the appealing/recipient organization. FIGURE 24 • Humanitarian Aid Access, Especially for Food, in Northwest Syria, Has Notably Declined A. Access to humanitarian assistance among residents, by earthquake B. Access to humanitarian assistance among IDPs, by earthquake intensity intensity (% of surveyed communities) (% of surveyed communities) 100 Earthquake UN Aid 90 Earthquake 90 Suspension 80 80 70 70 60 UN Aid 60 Suspension 50 50 40 40 30 30 20 20 10 10 0 0 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 Light Moderate Strong C. Access to humanitarian assistance among residents, by types of D. Access to humanitarian assistance among IDPs, by assistance types of on (continued next page) assistance (% of surveyed communities in areas strongly affected by the earthquake) (% of surveyed communities in areas strongly affected by the earthquake) 70 Earthquake UN Aid 80 Earthquake UN Aid 60 Suspension 70 Recent Economic Developments Suspension 23 50 60 50 40 40 10 10 0 0 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 FIGURE 24 • Humanitarian Aid Access, Especially for Food, in Northwest Syria, Has Notably Declined (continued) Light Moderate Strong C. Access to humanitarian assistance among residents, by types of D. Access to humanitarian assistance among IDPs, by types of assistance assistance (% of surveyed communities in areas strongly affected by the earthquake) (% of surveyed communities in areas strongly affected by the earthquake) 70 Earthquake UN Aid 80 Earthquake UN Aid 60 Suspension 70 Suspension 50 60 50 40 40 30 30 20 20 10 10 0 0 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 Shelter Health Food Education WASH CASH Food voucher Source: REACH Humanitarian Situation Overview Survey (HSOS) surveys; World Bank staff estimates. Note: (a) Survey data cover parts of northwestern and northeastern Syria and are collected at the community level through key informant interviews. In each community, between three and five key informants are selected, including members of civil society groups, local charities, local councils, local relief committees, Non-governmental Organizations (NGOs), or community leaders. (b) Earthquake intensity is based on the USGS shakemap version 17, released on April 14, 2023. Household welfare further ates most affected by the earthquakes (Figure 26A deteriorated and Figure 26B). Most households reported insufficient Access to health services, water systems, and ability to meet basic needs. Over two-thirds of food markets in the highly affected areas of households reported being insufficient or completely northern Syria is steadily diminishing. While unable to meet basic needs (Figure 27A).39 Rising communities most affected by the earthquake have prices and unemployment were the most frequently relatively higher rates of access to health services cited reasons limiting households’ ability to meet their and food markets, both indicators have been basic needs, with similar figures reported by residents, declining. Notably, among the most-affected com- returnees, and IDPs (Figure 27B). munities, the share reporting access to food markets Households are often forced to employ decreased from 93 percent in April 2023 to 89 per- coping mechanisms due to heightened financial cent in December 2023 (Figure 25A and Figure 25B). vulnerability, soaring prices, and reduced access Additionally, access to water has decreased across to essential services. Findings from the HSOS all northern regions, particularly in highly affected areas, which experienced a significant decline from 23 percent to 4 percent during the same period 38 Laxmi, Bijay. 2023. “Water Crisis in Syria’s ‘Food Basket’: (Figure 25C). The prolonged droughts, a depleting An In-depth Analysis of the Al-Hasaka Governorate’s Euphrates River, and malfunctioning water stations Struggles.” BNN Breaking, October 1, 2023. https://bnn​ have exacerbated water shortages.38 This disrup- breaking.com/world/syria/water-crisis-in-syrias-food-ba​ sket-an-in-depth-analysis-of-the-al-hasaka-governorates​ tion of essential services following the earthquakes, -struggles/. coupled with the ongoing conflict and humanitarian 39 According to the 2024 OCHA MSNA data collected by challenges, has contributed to the protracted cholera REACH in Northwest and Northeast Syria on behalf of outbreak that is heavily concentrated in the governor- the humanitarian community in Syria. 24 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE FIGURE 25 • Access to Services Has Declined since the Earthquakes, Especially in the Most-Affected Areas A. Access to health services, by earthquake B. Access to food markets, by earthquake C. Access to water more than five days a week, intensity intensity by earthquake intensity (% of surveyed communities) (% of surveyed communities) (% of surveyed communities) 70 100 40 60 90 35 Suspension Suspension Earthquake Earthquake 50 30 UN Aid UN Aid 80 25 40 70 20 30 60 15 August, 2023 Suspension December, 2022 Earthquake 20 UN Aid 10 10 50 5 0 40 0 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 March, 2023 April, 2023 June, 2023 November, 2023 December, 2023 Light Moderate Strong Source: REACH HSOS; World Bank staff estimates. Note: (a) Survey data cover parts of northwestern and northeastern Syria and are collected at the community level through key informant interviews. In each community, between three and five key informants are selected, including members of civil society groups, local charities, local councils, local relief committees, NGOs, or community leaders. (b) Earthquake shaking is characterized as “strong” in areas with an intensity of VI or higher, “moderate” in regions with an intensity of V, and “light” in regions with an intensity of VI or lower. Earthquake shaking is based on the USGS shakemap version 17, released on April 14, 2023. FIGURE 26 • A Cholera Epidemic Continued Amid a Chronic Shortage of Clean Water A. Distribution of suspected cholera cases as of December 16, 2023 B. Suspected cholera cases by governorate between August 25, 2022, and October 21, 2023 7,000 Earthquake UN Aid 6,000 Suspension Idleb 5,000 Aleppo 4,000 3,000 Ar-Raqqa 2,000 Deir-Ez-Zor 1,000 0 Al-Hasakeh 2022 Week 35 2022 Week 37 2022 Week 39 2022 Week 41 2022 Week 43 2022 Week 45 2022 Week 47 2022 Week 49 2022 Week 51 2023 Week 1 2023 Week 3 2023 Week 5 2023 Week 7 2023 Week 9 2023 Week 11 2023 Week 13 2023 Week 15 2023 Week 17 2023 Week 19 2023 Week 21 2023 Week 23 2023 Week 25 2023 Week 27 2023 Week 29 2023 Week 31 2023 Week 33 2023 Week 35 2023 Week 37 2023 Week 39 2023 Week 41 2023 Week 43 2023 Week 45 2023 Week 47 2023 Week 49 Others 0 20,000 40,000 60,000 80,000 100,000 Source: World Health Organization (WHO), https://www.emro.who.int/syria/information-resources/cholera-situation-reports.html, https://www.emro.who.int/pandemic-epidemic- diseases/outbreaks/outbreaks-archive.html. survey conducted in December 2023 revealed that pronounced increase in the reliance on credits as respondents across most communities predominantly a means of coping with the lack of income following the resorted to borrowing money, purchasing goods on earthquake, with a rise from 74 to 79 percent among credit, or sending their children to work to supplement residents and from 35 to 43 percent among IDPs their income (Figure 28A). Notably, there has been a between March and December 2023 (Figure 28B). Recent Economic Developments 25 FIGURE 27 • Households Reported Insufficient Ability to Meet Basic Needs A. Households’ self-reported ability to meet their basic needs by population B. Main reason limiting households’ ability to meet their basic needs by type, 2023 population type, 2023 (% of households) (% of households) 80% Prices increase 70% for food and other important goods 60% Unemployment/ 50% loss of job 40% Insufficient/ 30% lack of income 20% 10% Other 0% Easily able to Adequate Insufficient Completely 0% 10% 20% 30% 40% 50% 60% meet needs unable Residents Returnees IDPs out of camps Source: 2024 OCHA Multi-Sectoral Needs Assessment (MSNA) Surveys; World Bank staff estimates. Note: MSNA data covers parts of Northwestern and Northeastern Syria. The Earthquake Exacerbated the Severe Welfare Challenges Facing Affected Households, FIGURE 28 •  Increasing their Reliance on Coping Strategies A. Strategies to cope with the lack of income, residents and IDPs, B. Reported purchasing goods on credit, residents and IDPs December 2023 (% of surveyed communities) (% of surveyed communities) 90 Sell household 80 productive assets 70 Migration for daily 60 work within sectors 50 40 Send children 30 to work 20 Purchasing goods 10 on credit 0 October, 2021 November, 2021 December, 2021 February, 2022 March, 2022 April, 2022 June, 2022 July, 2022 September, 2022 November, 2022 December, 2022 March, 2023 April, 2023 June, 2023 August, 2023 November, 2023 December, 2023 Borrow money from family or friends 0 20 40 60 80 100 Residents IDPs Residents IDPs Source: REACH HSOS; World Bank staff estimates. Note: Survey data cover parts of northwestern and northeastern Syria and are collected at the community level through key informant interviews. In each community, between three and five key informants are selected, including members of civil society groups, local charities, local councils, local relief committees, NGOs, or community leaders. 26 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE 3 OUTLOOK AND RISKS Economic outlook fuel. In addition, the WFP decision to discontinue food basket distribution in December 2023 would Syria’s protracted economic contraction is also exacerbate existing price pressures.40 Food forecast to persist in 2024 due to a multitude inflation, stable since September 2023, resumed of challenges stemming from conflicts both in January 2024 with a 5 percent monthly increase. within Syria and across the region. Subject to Extrapolating from average monthly trends in 2023, extraordinarily high uncertainty, real GDP is projected we forecast a 116.8 percent yoy increase in the to contract by 1.5 percent in 2024, extending the WFP minimum food basket price in 2024. Assuming 1.2 percent decline in 2023 (Table 3). This projection the historical relationships between the WFP food assumes that the regional conflict will remain largely basket price and food inflation, as well as between contained in 2024, with the full-year impact therefore food inflation and overall inflation, remain stable, we expected to materialize within the year. Private con- project the CPI in Syria to reach 99.7 percent yoy in sumption, the primary engine of growth, will remain 2024, aligning with the 92.6 percent yoy recorded subdued as rising prices continue to erode purchas- in 2023. ing power. Private investment is expected to remain The fiscal deficit is projected to narrow weak amid a volatile security situation and consider- slightly but remain large in 2024 and will continue able economic and policy uncertainty. Low fiscal to be mostly financed through monetization. Fis- revenues and limited access to financing will continue cal revenues are forecast to decline further in 2024 to constrain government spending, especially capital expenditures. Inflation is anticipated to remain high in 40 The Syria Report. 2023. “WFP to End its Main Food 2024 due to the pass-through effects of currency Assistance Programme in January.” December 5, depreciation, along with persistent shortages 2023. https://syria-report.com/wfp-to-end-its-main-food- and potential further subsidy cuts of food and assistance-programme-in-january/. 27 TABLE 3 • Macroeconomic Outlook Indicators (Annual percent changes unless indicated otherwise) 2021 2022 2023e 2024f Real GDP growth, at constant market prices a 1.3 –0.1 –1.2 –1.5 Inflation (Consumer Price Index) 118.8 74.0 92.6 99.7 Fiscal Balance (% of GDP) –9.6 –8.4 –8.2 –8.0 Source: World Bank staff estimates. Notes: e = estimate, f = forecast. a Projection based on Nighttime light data. due to reduced earnings from state entities and The various conflicts in the region may potential tax cuts in a weakening economy. Limited dampen Syria’s economic prospects due to fiscal resources would likely prompt the authorities increased insecurity and infrastructure destruc- to cut spending further, including implementing addi- tion, risk of rising commodity prices, and potential tional reforms to reduce the costly subsidies. Indeed, aid diversion. The possibility of additional Israeli the 2024 budget indicates a substantial decrease in airstrikes targeting military activities of Iranian-linked fiscal subsidies, dropping from 19 percent of fiscal groups poses a threat to critical infrastructure, which expenditure the previous year to 7 percent. Overall, could disrupt supply chains and elevate transporta- the fiscal deficit is forecast to narrow slightly, from tion and logistics costs. The high tensions following 8.2 percent of GDP in 2023 to an estimated 8.0 per- events such as Israel’s bombing of an Iranian consul- cent in 2024. The central bank is expected to finance ate in Damascus on April 1, 2024, risk increasing most of the deficit. attacks by both Iranian-linked groups and Israel.42 Continued attacks on commercial vessels in the Red Sea could worsen disruptions in global trade and Risks supply chains, resulting in higher commodity prices, which would add to inflationary pressures. This risk, Risks to the growth outlook are significant and however, is mitigated by the Houthis’ statement that tilted to the downside. The escalation of conflict they are not targeting ships that are from countries within the country and heightened geopolitical with whom they share a common position. Syria may tensions stemming from the various conflicts in the also face greater challenges in securing international region would deepen growth contraction in Syria. assistance due to increased humanitarian disasters in With no prospect of an imminent political the region, which may divert resources from donors, settlement, Syria’s ongoing internal divisions potentially worsening malnutrition, further exacerbat- may trigger new rounds of fighting. Continued ing poverty, and increasing the likelihood of disease tensions between Türkiye and the AANES, worsened outbreaks. by Türkiye’s airstrikes in northeast Syria following their reiterated intentions in 2022 to launch fresh offen- 41 Asharq Al Awsat, 2024. “Russia Carries out Dozens sives, may potentially lead to new military operations of Strikes against ISIS in Syria.” April 1, 2024. https:// targeting AANES-held Manbij and Tel Rifaat. Similarly, english.aawsat.com/arab-world/4942981-russia-carries- tensions between government and opposition forces out-dozens-strikes-against-isis-syria. in northwest Syria, marked by increased clashes in 42 Regan, Helen, Hamdi Alkhshali and Tamara Qiblawi. 2024. “Iran vows revenge as it accuses Israel of deadly 2023, may escalate further. In addition, attacks by airstrike on Syria consulate in deepening Middle the Islamic State are likely to intensify amid increased East crisis.” CNN, April 2, 2024. https://edition.cnn. pressure on government security forces from US and com/2024/04/02/middleeast/iran-response-israel- Israeli attacks.41 damascus-consulate-attack-intl-hnk/index.html. 28 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE The political focus on the consequences The Share of Foreign Aid Received FIGURE 29 •  of the ongoing conflict in the Middle East, com- by Syria from Arab Countries Increased in 2023 bined with limited progress in reducing Syrian drug production and trafficking, notably capta- A. Syria’s foreign aid received from Arab countries (Million US$; Share in total, %) gon, may impede Syria’s normalization process 400 16% with other Arab states. Syria’s readmission to the League of Arab States (LAS) in May 2023, as part of 350 14% a Jordan-led initiative, aimed to increase humanitar- 300 12% ian aid and improve cooperation on refugee-related 250 10% issues and curbing drug trade.43 Throughout 2023, the Syrian government pursued normalization, which 200 8% resulted in the reopening of its embassy in Riyadh, 150 6% as well as the reopening of embassies by the United 100 4% Arab Emirates (UAE), Oman, and Bahrain in Damas- 50 2% cus. The government also hosted various high-level diplomatic engagements in Damascus.44 Aid from 0 0% 2016 2017 2018 2019 2020 2021 2021 2023 Arab countries increased to 15 percent of total aid received in 2023, up from 2 percent in the previous Kuwait Qatar Saudi Arabia United Arab Other Arab Share of aid from year (Figure 29). However, normalization efforts have Emirates countries Arab countries (RHS) stalled amid limited progress in curbing captagon production and smuggling, which emerged as a Source: Syrian Arab Republic Financial Tracking Service of OCHA; World Bank staff estimates. major impediment to normalization. Moreover, the Note: “Arab countries” refers to Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, ongoing conflict in the Middle East has dominated Somalia, Sudan, Tunisia, the UAE, and Yemen. Foreign aid to Syria encompasses the political agenda of the region and may limit both commitments and paid contributions. According to OCHA, a commitment is a contractual agreement between the donor and the appealing organization/recipient. opportunities to prioritize other issues. Meanwhile, a paid contribution denotes the actual transfer of funds or in-kind goods Syria has become a major producer and from the donor to the appealing/recipient organization. exporter of captagon (fenethylline), which has evolved into a multi-billion-dollar industry and the 43 See World Bank, 2023. Syria Economic Monitor: most valuable sector of the Syrian economy. As The Economic Aftershocks of Large Earthquakes. of 2023, government-controlled Syria and bordering Washington, D.C: World Bank Group. http://documents. worldbank.org/curated/en/099540309012311026/ towns in Lebanon appear to have a near-monopoly IDU0a8823acd034ac04efd0abc20842c479023f4. on captagon production45 and account for the vast World Bank, 2023. majority of captagon seizures with known origins 44 Among others, Syria’s President Bashar al-Assad worldwide (Figure 30A). With fast-rising demand attended a Saudi-hosted Islamic-Arab summit on after 2019, the Gulf Cooperation Council (GCC) the ongoing conflict centered in Gaza in November, countries emerged as the main consumer markets while Jordan’s foreign minister attended Damascus in February for the first time since 2011. for captagon and account for almost 90 percent of 45 Center for Operational Analysis and Research. 2021. the regional market (Figure 30B and Figure 30C). “The Syrian Economy at War: Captagon, Hashish. And The total market value of captagon of Syrian origin the Syrian Narco-State.” April 27, 2021. https://coar- is estimated between US$1.9 and US$5.6 billion global.org/2021/04/27/the-syrian-economy-at-war- per year,46 almost equal to Syria’s estimated GDP captagon-hashish-and-the-syrian-narco-state/. of US$6.2 in 2023. Actors linked to Syria profit from 46 Calculations based on interpolations from a new dataset on individual drug seizures and fieldwork indicating pill the sale of captagon at different stages of the value prices in target countries as well as production costs. chain. Overall, revenues are estimated to amount Upper and lower bound estimates are based on the to between US$0.6 and US$1.9 billion each year. assumption that between 33 percent and 50 percent of By comparison, Syria’s licit exports amounted to all captagon shipments are detected and seized. Outlook and Risks 29 FIGURE 30 • Syria Has Become a Major Producer and Exporter of Captagon, the Revenues of which Exceed Revenues from Licit Exports A. Number of seizures of narcotics of known origin (2016–2022) B. Total number of captagon pills seized (Global, 2015–2023, millions of pills) 400 Captagon Cannabis resin (hashish) 350 Cannabis plants Cannabis herb (marijuana) 300 Other Tramadol Synthetic cannabinoids (Spice) 250 Methamphetamine Khat 200 Poppy plants Opium 150 Heroin Amphetamine 100 0 10 20 30 40 50 60 50 From regime-held Syria or Lebanon From regime-held Syria From Lebanon From other countries 0 2015 2016 2017 2018 2019 2020 2021 2021 2023 C. Top ten countries in terms of captagon seizures in or related to MENA D. Street market value of captagon in the MENA region and financial flows countries into Syria (Total from 2016–2023, millions of pills) (Billion US$) 700 1.87 600 Market value for dealers (street value) 500 5.61 400 Profit for actors within or 0.64 300 connected to Syria 1.89 200 100 0.96 Licit Exports (2023) 0 0 0 2 4 6 Saudi Arabia UAE Jordan Lebanon Syria Iraq Egypt Kuwait Oman Morocco Interdiction Rate 50% Interdiction Rate 25% Source: The New Lines Institute Captagon Project, https://newlinesinstitute.org/initiative/special-project-on-the-captagon-trade/; Tahaleel (2024); Karam Shaar (2023) “Sky High: The ensuing narcotics crisis in the Middle East and the role of the Assad Regime”, Observatory of Political and Economic Networks; Syrian Arab News Agency (SANA); World Bank estimates. Note: Due to the difficulties in repatriating funds amid the prevailing sanctions regime, it remains unclear what share of these revenues is eventually transferred into the country. approximately US$960 million in 2023 according to 47 Syrian Arab News Agency. 2024. ‫ باملئة‬27 :‫القتصاد والتجارة الخارجية‬ official figures,47 making the sale of captagon gener- January 10, 2024. ”.2022 ‫ عن عام‬2023 ‫نسبة انخفاض قيمة املستوردات خالل‬ ate more export revenue than the entirety of the licit https://www.sana.sy/?p=2028932. economy (Figure 30D). 30 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE DEVELOPMENT IN REVERSE: THE IMPACT OF THE SYRIAN CONFLICT ON HOUSEHOLD WELFARE48 The Syrian conflict has had a devastating impact on household welfare, driving a sharp deterioration in living conditions and poverty indicators. According to survey data collected by humanitarian organizations, the extreme poverty rate rose from a negligible level in 2009 to roughly 25 percent by mid-2022. Multiple external factors, including the 2019 financial crisis in Lebanon, the COVID-19 pandemic, and the war in Ukraine, have further eroded the welfare of Syrian households, and the massive Türkiye-Syria earthquakes in February 2023 devastated areas that were already severely affected by the conflict. B efore the conflict, the Syrian Arab Republic son per day.50 These numbers remained substantially was a fast-growing, lower-middle-income stable between 2006 and 2009. country with virtually no extreme poverty. More than a decade of conflict compounded The economy expanded rapidly between 2000 and by external economic shocks has led to a dramatic 2010. Real GDP grew at an average annual rate of deterioration in the welfare of Syrian households. 4.3 percent, driven mainly by nonoil sectors, while inflation remained modest. Despite multiple exog- 48 This special focus note draws on Redaelli and Infanzon enous shocks,49 the Syrian economy was increasingly Guadarrama (2024) “The Welfare of Syrian Households integrated into international value chains, and the after a Decade of Conflict.” World Bank. combined value of imports and exports reached 49 These shocks include Syria’s international isolation after 76.5 percent of GDP just prior to the 2008 global the Iraq war, Syria’s expulsion from Lebanon, and Israeli financial crisis. Sustained economic growth drove a strikes against Syrian allies Hezbollah and Hamas. 50 These are the international poverty lines for lower-middle- sustained decline in poverty during the first half of the income countries and lower-income countries expressed 2000s. In 2006–07, 16.36 percent of the population in 2017 purchasing-power-parity terms. Prior to conflict, lived on less than US$3.65 per person per day, and Syria was classified as a lower-middle-income country. It just 2.83 percent lived on less than US$2.15 per per- was reclassified as a lower-income country in 2018. 31 FIGURE 31 • Extreme Poverty and Poverty Rates is concentrated in just three governorates. Extreme have Dramatically Increased since poverty rates are highest in Northeast and Southwest the Beginning of the Syrian Conflict governorates: Deir-ez-Zor (72 percent), Hama and Nationwide poverty rate (%) Ar-Raqqa (61 percent), Al-Hasakeh (49 percent), 100 Dar’a (48 percent), Quneitra (43 percent), and Aleppo 90 (34 percent). In other governorates, extreme poverty 80 rates are well below the national average (Figure 32). 70 Together, Aleppo, Hama, and Deir-ez-Zor are home to 60 just 30 percent of the country’s total population, but 50 more than 50 percent of the population lives on less 40 than US$2.15 per person per day. Poverty rates at the 30 US$3.65 poverty line are high across the Syrian Arab 20 Republic, exceeding 90 percent in half of all governor- 10 ates. Only two governorates have poverty rates below 0 50 percent, Damascus (44 percent) and As-Sweida (23 percent). 2011 2021 2012 2008 2010 2014 2018 2020 2007 2009 2015 2016 2017 2019 2013 2022 Poverty rates are highest among female- Extreme Poverty Rate ($2.15 per person per day) headed households and displaced households, Lower Middle Income Country Poverty Rate ($3.65 per person per day) while international remittances have been a critical lifeline. Receiving remittances from abroad Source: World Bank staff calculations based on 2007 and 2009 CBS and 2022 HNAP. is associated with a 12 percentage-point reduction See Redaelli & Infanzon Guadarrama (2024) and Redaelli et al. (2024) for details. Note: Poverty rates are calculated in 2017 purchasing-power-parity terms. Poverty rates in in extreme poverty rates and an 8 percentage-point 2009 and 2022 use different sources that are not directly comparable. reduction in poverty rates. The reduction in extreme poverty associated with receiving international remit- tances is almost six times as large as the reduction According to estimates based on the 2022 Humani- linked to humanitarian assistance. tarian Needs Assessment Program (HNAP) survey, Beyond monetary poverty, conflict and 27 percent of the Syrian population—about 5.7 million external shocks have eroded multiple dimen- people—now lives on less than US$2.15 per person sions of household welfare. Redaelli and Infanzon per day, while 69 percent of the population—about 14.5 million people—lives on less than US$3.65 per 51 For comparison, in Lebanon, the 2022 poverty rate person per day (Figure 2).51 Pre- and post-conflict esti- using the $3.65 international poverty line is 0.5 percent mates of monetary poverty are not strictly comparable (World Bank, 2024). This number relies on the 2017 due to differences in data sources,52 but the available PPP conversion factor, which may underestimate the information clearly shows a staggering decline in living extent of recent inflation in Lebanon. It is to be used for standards.53,54 Even as the intensity of the conflict has comparison with the poverty rate in Syria only. waned in recent years, poverty rates have continued 52 Poverty trends over the period 2009–2022 are reconstructed by interpolating poverty estimates obtained to increase, likely due to the impact of the COVID-19 by back-casting poverty estimates based on the HNAP 2022 pandemic, the 2019 Lebanese financial crisis, mount- survey and those obtained by nowcasting 2009 poverty ing geopolitical instability driven by the war in Ukraine. estimates with both projections based on the growth rate Strikingly, the erosion of household welfare since of per capita GDP in current prices, deflated by CPI and a 2019 has been equally if not more severe than that passthrough of 0.7 (see Redaelli et al. [2023] for details). observed during the initial years of the conflict, when 53 See Redaelli et al. (2023) for a description of the methodology for poverty measurement using HNAP the incidence of deaths, displacement, and destruc- 2022 data. tion was at its peak (Figure 31). 54 Redaelli S., Infanzon Guadarrama M., Moreno Herrera L. Poverty rates vary sharply by region, and L. (2023). Assessing the extent of monetary poverty in over 50 percent of the extremely poor population Syria after a decade of conflict. World Bank. 32 CONFLICT, CRISES, AND THE COLLAPSE OF HOUSEHOLD WELFARE Poverty and Extreme Poverty Rates are Highest in the Northeast and Southwest of FIGURE 32 •  the Syrian Arab Republic A. Poverty rates by governorate, 2022 B. Poverty rates by governorate, 2022 (US$2.15 per person per day) (US$3.65 per person per day) Areas of control by different parties of the conflict, 2015 D. Areas of control by different parties of the conflict, 2022 Source: World Bank staff estimates based on HNAP 2022 (A and B). World Bank staff calculations based on the data by the Carter Center (C and D). See Redaelli & Infanzon Guadarrama (2024) for details. Note: Poverty rates are calculated in 2017 purchasing-power-parity terms. Guadarrama (2024) developed a Multidimensional sional vulnerability was highest in Al-Hasakeh (0.76) Vulnerability Index (MVI) index by combining six and well above the national average in Dara (0.68), As- household-level indicators. According to this index, Sweida (0.63), rural areas around Damascus (0.62), more than nine in ten Syrians were multidimensionally Tartous (0.60), and Ar-Raqqa (0.57). Deprivations vulnerable in 2022. Inadequate income opportunities across the livelihood indicators contributed more due to unemployment, precarious employment, and than 80 percent to multidimensional vulnerability in the absence of remittances, was a major contributor Hama and Homs, while deficient living conditions to multidimensional vulnerability, along with limited were the dominant factor in Al-Hasakeh and Dara access to water (Figure 33A). (Figure 33B). Across the country, displaced Syrians Like extreme poverty rates, the incidence were disproportionately vulnerable, including those of multidimensional vulnerability varies sig- still living in camps and those that had recently nificantly across the Syrian Arab Republic’s returned home, underscoring the challenges posed governorates. In 2022, the incidence of multidimen- by reintegration. DEVELOPMENT IN REVERSE: THE IMPACT OF THE SYRIAN CONFLICT ON HOUSEHOLD WELFARE 33 FIGURE 33 • Multidimensional Vulnerability is High due to Weakened Livelihood Opportunities, and Vulnerability is Highest in Al-Hasakeh, Dara, and As-Sweida A. 2022 Multidimensional vulnerability by indicator B. Multidimensional vulnerability incidence by governorate in 2022 100 87.4 90 80 73 70 66.3 60 52.4 Percent 50 42.5 40 30 20 15.7 10 0 Precarious Income No remittances No housing access No water access Unemployment No electricity access Livelihood Living conditions Source: World Bank staff estimates based on HNAP 2022. See Redaelli & Infanzon Guadarrama (2024) for details. 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