Scars of Conflict Are Deeper and Longer Lasting in Middle East and Central Asia
IMF Blog, June 5, 2024
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Bibliographic details
- Authors: Colombe Ladreit, Borislava Mircherva, Troy Matheson
- Published: June 5, 2024
Key findings
- Economies across the Middle East and Central Asia are more affected by conflicts—“even a decade after a severe conflict, their income per capita remains about 10 percent lower.”
- A year after the start of a severe conflict, countries in these regions lose about 2 percent in real GDP per capita compared to before the conflict.
- Countries elsewhere typically experience a similar drop after the first year, of about 2 percent, but then largely recover after the fifth year.
- Conflicts are associated with higher inflation and lower consumption, investment, exports, and fiscal revenues.
Scope, data, and examples
- Analysis covers events from 1989 to 2022 tracked by the Uppsala Conflict Data Program.
- Episodes include lethal violence between groups where at least one party is the government or between two organized groups, neither of which is a government.
- Some of the region’s most conflict-affected states noted: Afghanistan, Iraq, Somalia, Sudan, Syria—these have “endured some form of conflict for most of the sample period.”
Mechanisms and heterogeneity
- The worse effects in Middle East and Central Asia likely reflect:
- Sharper effects from higher-intensity conflicts (which are more frequent in these regions).
- The prevalence of exacerbating preexisting conditions, for example, weaker institutions.
- The findings suggest that countries with weaker institutions tend to suffer larger losses than other countries.
- Conflicts generate spillovers: they can have knock-on effects on other countries, with the impact varying based on the channel of exposure.
- Effects extend beyond economics, causing immense human suffering, death, increased fragility, and food insecurity.
Policy implications and buffering factors
- Strong institutions can help mitigate the economic impact of conflict.
- Sound economic fundamentals—specifically “room in government budgets to respond to humanitarian and social needs”—can help buffer an economy against the impact.
Source and provenance
- Blog authors: Colombe Ladreit, Borislava Mircheva, Troy Matheson; published June 5, 2024.
- Based on Chapter 2 of the April 2024 Regional Economic Outlook for the Middle East and Central Asia, “Fragile Foundations: The Lasting Economic Scars of Conflict.”
Source: IMF blog, “Scars of Conflict Are Deeper and Longer Lasting in Middle East and Central Asia,” Colombe Ladreit, Borislava Mircheva, Troy Matheson, June 5, 2024.