IMF: Mideast conflicts have erased development gains for whole generation

The International Monetary Fund (IMF) says conflicts in the Middle East are not only devastating economies in countries such as Iraq, Libya, Syria and Yemen, but they have also erased "development gains for a whole generation."

The fund issued a report titled the Economic Impact of Conflicts and the Refugee Crisis in MENA (Middle East and North Africa) on Friday, where it said conflicts were killing economies in the countries gripped by war and sapping growth in neighboring countries and those hosting millions of refugees.

Middle Eastern and North African countries battered by fighting have suffered average losses of 6-15 percentage points in the gross domestic product (GDP) in three years, compared to a 4-9 percentage-point average worldwide, according to the report.

The IMF report showed that the drops in economic output in Syria, Libya and Yemen in recent years have far exceeded the worldwide average.

Syria's gross domestic product level is currently less than half the level it was five years ago before the start of the conflict, the IMF stated.

The report showed Yemen lost 25-35 percent of its GDP in 2015 alone, in the wake of the deadly Saudi campaign.

Oil-dependent Libya saw its GDP fall 24 percent in 2014, the IMF said.

Physical infrastructure damage, now estimated at $137.8 billion in Syria and more than $20 billion in Yemen, has reduced trade and output in neighboring countries, according to the report.

Countries bordering high-intensity conflict zone showed an average annual GDP decline of 1.4 percentage points worldwide, with a bigger drop of 1.9 percentage points in the Middle East and North Africa region.

Refugees' plight 

The fleeing of more than half of Syria's 22 million population, 6.6 million internally and more than five million to other countries, has magnified economic losses, dramatically escalating poverty, unemployment and school dropouts in countries that were already struggling, the IMF said.

Many of the refugees seeking asylum in other countries are skilled workers and professionals forced by war and persecution to leave the conflict zones in hope of better lives.

However, according to the IMF, because refugees often have fewer rights than local populations, those landing in developing countries are often absorbed into already disadvantaged local communities forming a new underclass comprising refugees and the existing poor in the host country, which in turn leads to a detrimental effect on the host countries.

For those refugees that land in Europe, where the influx of refugees has only had a small impact on economy, there have been some positive effects on the host countries, according to the report.

More funds needed

The IMF report has revealed the huge scale of the refugee crisis and the pressure it put on several United Nations institutions, especially the United Nations High Commissioner for Refugees (UNHCR) and the World Food Programme.

The two UN organizations have been playing a leading role in the provision of humanitarian assistance, both to internally displaced people and refugees.

However, the IMF report says funding has not kept up with the sharp increase in needs.

For instance, the World Food Programme and the UNHCR have had to cut their services to refugees in Jordan due to funding constraints, which may have contributed to the acceleration of refugee flows to Europe from late 2014, according to the report.

The IMF report urged policymakers to scale up humanitarian aid in conflict zones and neighboring countries hosting refugees and prioritize fiscal spending to protect human life and serve basic public needs.

The report comes as the UN General Assembly is preparing to host a summit on refugees in New York next week.

The UN plans to use the summit as a platform to urge governments, private donors, and humanitarian agencies to support the organization in its efforts to ease suffering of the victims of world conflicts.

Analysts believe the MENA conflicts and the following refugee crisis are the outcome of the West’s policies in the Middle East and North Africa.

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