Economic Impact of Selected Conflicts in the Middle East: What Can We Learn from the Past?
IMF Working Papers, June 11, 2014
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- Economic Impact of Selected Conflicts in the Middle East: What Can We Learn from the Past?
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Bibliographic details
- Authors: Randa Sab
- Published: June 11, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498310895.001
Summary
- Using narrative-based country-case studies, war episodes in the Middle East were examined to assess their economic impact on conflict and neighboring economies.
- The paper found that conflicts led to a contraction in growth, higher inflation, large fiscal and current account deficits, loss of reserves, and a weakened financial system.
- Post-conflict recovery depended on the economic and institutional development of the country, economic structure, duration of the war, international engagement, and prevailing security conditions.
- The net economic impact on neighboring countries varied according to their initial economic conditions, number and income level of refugees they hosted, economic integration, and external assistance.
Key findings
- Conflicts produced a contraction in growth.
- Conflicts produced higher inflation.
- Conflicts produced large fiscal deficits.
- Conflicts produced large current account deficits.
- Conflicts led to loss of international reserves.
- Conflicts weakened the financial system.
Determinants of post-conflict recovery
- Economic and institutional development of the country.
- Economic structure.
- Duration of the war.
- International engagement.
- Prevailing security conditions.
Factors shaping impact on neighboring countries
- Initial economic conditions of neighboring countries.
- Number and income level of refugees hosted.
- Degree of economic integration with the conflict country.
- Level of external assistance received.
Subjects and keywords (as listed)
- Subjects: Balance of payments, Central banks, Current account deficits, Economic sectors, Exchange rates, Financial sector, Foreign exchange, Inflation, International reserves, Prices
- Keywords: Conflict, country-case study methodology, Current account deficits, debt settlement program, excess demand, Exchange rates, Financial sector, financial system, free market, Global, Inflation, inflation in Kuwait, International reserves, invasion of Iraq, Iraq, Kuwait, Lebanon, Lebanon's banking system, Middle East, post-conflict economic recovery, WP