The Kurdistan Region of Iraq : Assessing the Economic and Social Impact of the Syrian Conflict and ISIS

"The Kurdistan region of Iraq is facing an economic and humanitarian crisis as a result of the influx of Syrian refugees which began in 2012 and internally displaced persons (IDPs) in 2014. The region's population increased by 28 percent over a short period, placing strains on the local economy, host community, and access to public services. This book provides national and regional policy makers with a technical assessment of the impact and stabilization costs needed for 2015 associated with the influx of refugees and IDPs. The stabilization cost for 2015 is estimated at US$1.4 billion in additional spending above and beyond the region's budget. This estimate could significantly increase should the crisis persist longer. The study highlights how prices and unemployment have increased, and refugees and IDPs entering the labor market are pushing wages down. A surge in violence led to supply side shocks. The ISIS crisis has had a significant effect on trade of goods and services. Transportation routes were disrupted. Foreign direct investment flows have declined and operations of foreign enterprises have been adversely affected. Disruption of public investment projects have had a negative impact on the economy. Based on the World Bank estimates, economic growth contracted by 5 percentage points in the region and the poverty rate more than doubled, rising from 3.5 percent to 8.1 percent. While the government has been responsive to addressing the needs of the displaced population up until now, more resources are needed to avert this humanitarian crisis and address the needs of the displaced population in the medium- and long-term. The report is an outcome of close collaboration between a wide spectrum of World Bank experts and regional government institutions and international partners"--Publisher's descriptionpages The Kurdistan Regional Government (KRG) is facing a multifaceted and complex crisis compounding concurrent and mutually aggravating security, political, economic, and social risks. As a result of the influx of Syrian refugees and internally displaced persons arising from the Syrian conflict and the ISIS insurgency, the region's population increased by 28 percent, placing strains on the local economy, host community, and access to public services. These events took place in the context of a fiscal crisis, and these multiple shocks hit the economy hard. Economic growth is estimated to decline by five percentage points in 2014. Disruption of public investment projects, resulting from a lack of fiscal transfers, severely affected domestic economic activities. The construction sector has been particularly affected with, small companies reporting bankruptcy. Foreign direct investment flows have declined, and operations of foreign enterprises have been adversely affected. The crisis resulted in sharply lower local revenues, increased borrowing from the private sector, and large quasi-fiscal deficits. A surge in violence has led to supply-side shocks. With blocked transportation routes, the region's role as a transit trade route to Southern Iraq was severely affected. Food security for the region is hampered by the crisis. Prices have increased, and so has unemployment. Increased labor supply and competition for jobs pushed wages down. The standard of living has deteriorated, and a noticeable share of the population has fallen into poverty or is vulnerable to falling into poverty. In 2014, the poverty rate in the region more than doubled. This influx has severely constrained the delivery of health, education, and social protection programs to the population. These effects are unfolding within a policy framework that has some long-standing distortions. For example, before the crisis, the region's economy was already seeing supply-side strains in electricity and water sectors. This book provides the government with a technical assessment of the impact and stabilization costs associated with the influx of refugees and internally displaced persons. The cost of conflict is high, and the impact on the KRG economy and budget is significant. In the short term, much of the solutions for managing the impact of these shocks will require national and international response.-- Provided by publisher

The Kurdistan region of Iraq is facing an economic and humanitarian crisis as a result of the influx of Syrian refugees which began in 2012 and internally displaced persons (IDPs) in 2014. The region's population increased by 28 percent over a short period, placing strains on the local economy, host community, and access to public services. This book provides national and regional policy makers with a technical assessment of the impact and stabilization costs needed for 2015 associated with the influx of refugees and IDPs. The stabilization cost for 2015 is estimated at US$1.4 billion in additional spending above and beyond the region's budget. This estimate could significantly increase should the crisis persist longer. The study highlights how prices and unemployment have increased, and refugees and IDPs entering the labor market are pushing wages down. A surge in violence led to supply side shocks. The ISIS crisis has had a significant effect on trade of goods and services. Transportation routes were disrupted. Foreign direct investment flows have declined and operations of foreign enterprises have been adversely affected. Disruption of public investment projects have had a negative impact on the economy. Based on the World Bank estimates, economic growth contracted by 5 percentage points in the region and the poverty rate more than doubled, rising from 3.5 percent to 8.1 percent. While the government has been responsive to addressing the needs of the displaced population up until now, more resources are needed to avert this humanitarian crisis and address the needs of the displaced population in the medium- and long-term.