Laying the Groundwork: Can today’s aid prepare the way for tomorrow’s reconstruction?

Now that Syria’s war has entered its sixth year with no end in sight, questions around how to manage the long-term provision of humanitarian aid are coming into view. In conflict situations there is a reluctance to undertake sustainable long-term development work that is vulnerable to physical destruction and operational disruption. However humanitarian aid has its limitations as a quick fix to alleviate suffering in emergency contexts and, in a protracted conflict, may lead to market disruptions and aid dependency, both of which can have serious lingering effects and greatly hinder future development efforts. I recommend reading TRUST’s report Fitting Aid to Context: community experiences of aid delivery in Northern Syria for an in-depth assessment of this issue.

Beyond the immediate humanitarian challenges, the economic reconstruction of Syria will be a daunting task. The World Bank estimates that the cumulative loss in GDP amounts to $226 billion, or four times the 2010 GDP, and an estimated $100 billion per year will be required to rebuild Syria. Most importantly they estimate that the destruction of physical capital accounts for only 5% of GDP losses, with by far the largest contribution being disruption in economic organisation. That is, lost connectivity between people, decreased incentives to pursue productive activities, and breaks in economic networks and supply chains have by the far greatest and most lingering effect on Syria’s economic collapse. So, economic reconstruction will not be primarily a physical infrastructure problem but a social and economic one, especially if we want to limit the rent-seeking and cronyism that was a major precipitating factor to the conflict in the first place.

In the meantime, with an estimated 60% of Syrians in extreme poverty and lacking access to almost all basic services, humanitarian aid must remain a priority. Close to $6 billion worth of aid is poured into Syria annually, almost half of which is spent on in-kind aid and food. With UNOCHA estimating 9 million people are in need of food assistance, this closely reflects the immediate needs of the population. But is there a way we can use these humanitarian dollars to simultaneously support markets and improve economic organisation in preparation for economic reconstruction, rather than creating dependency that will hinder economic recovery? There may be a number of activities that better serve this purpose, especially those focusing on supporting local markets and harnessing the potential of Syria’s labour force.

In supporting local markets the focus should be on models that support local supply chains while also stimulating local demand. As most of Syria’s large manufacturers have closed down or moved production to neighbouring countries, self-employment has risen to become the most common source of income. This has resulted in massive growth in small and microbusinesses, but there are currently few programs to support this sector. High trade costs and disruptions in supply are a major issue, and increasing internal and cross-border flows of goods may introduce elasticity into the pricing of goods. In stimulating local demand, direct cash transfers can have positive multiplier effects when the above-mentioned supply issues have been addressed. Cash for Work programs also provide opportunities for individuals to earn money while contributing to public infrastructure projects. There are positive reports from workers who value both the employment and flexibility of cash income, while also contributing to the rebuilding of their communities.

Simultaneously the Syrian labour force should be supported, including shifting the perception of Syrian refugees in host countries from burdens to economic assets. Improving access to education, training, and social and medical services will have significant impacts on labour productivity and are a good target for aid dollars. There is also the opportunity to assist Syrian women who out of economic necessity are entering the workforce in large numbers. They should be supported to ensure they don’t suffer from exploitation and to minimise social tensions. In Syria the labour market participation rate for women was less than 20%, amongst the lowest in the world, and even those earning degrees often never entered the formal workforce. Perhaps on their return to Syria women will be playing a bigger role in the formal labour market than before, bolstered by the skills and experience they have gained.

These labour supply activities must be accompanied by a serious reflection of market demands and, of course, accompanied by demand-side efforts providing employment opportunities for Syrian labour. This includes supporting Syrian entrepreneurs and easing legislative and practical barriers to employing Syrians.

Humanitarian aid practitioners face limitations in the scope of their activities, and are often painfully aware of this. However, interventions that balance both supply and demand considerations and recover the economic networks that have been lost will go a long way towards putting Syria in the best position for recovery.

Miriam Ramsay is a programs intern at Trust and is based in Gaziantep. She has a Bachelor of Arts and Master of International Relations from the University of Melbourne, and has a keen interest in the political economy of the Middle East.

 

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