World Bank: Syrian war costs region $35 billion in productivity
Government forces chat near a tank near the Shia villages of Nabbul and Zahra in Syria's northern Aleppo province which have been under siege by Daesh for three years on February 2, 2016. (AFP/George Ourfalian)
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The World Bank said Thursday that economic growth in 2015 for the Middle East and North Africa region fell to just 2.6 percent, due largely to the impacts of war and cheap oil, Reuters reported.
According to a report issued by the World Bank, five years of war in Syria and conflict and instability spilling over to neighborhing countries have cost the region about $35 billion in lost output. The figures were based in 2007 prices, equal to Syria's gross domestic product in that year.
Oil prices falling to less than $30 a barrel from over $100 just two years ago is a source of major concern for MENA oil exporters, who have seen government revenue plunge, with budget deficits increasing. The report predicts that Saudi Arabia's public debt will reach 20 percent of GDP next year, 10 times its level of debt in 2013.
"The richest oil exporters in the region, Saudi Arabia, Qatar, Kuwait and United Arab Emirates, have large reserves that will enable them to run deficits over the coming years, although not far beyond that," the report stated. "At current levels of spending, and an oil price of USD 40 per barrel, Saudi Arabia will exhaust its reserves by the end of the decade."
The World Bank estimates that between $3.6 billion to $4.5 billion in physical damage has been sustained by just six cities in Syria: Aleppo, Deraa, Hama, Homs, Idlib, and Latakia. Similar figures exist for Yemeni cities.
"A peace settlement in Syria, Iraq, Libya and Yemen could lead to a swift rebound in oil output, allowing them to increase fiscal space, improve current account balances and boost economic growth in the medium term with positive spillovers to the neighboring countries," Lili Mottaghi, World Bank economist for the region, said in the report.
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