London, Asharq Al-Awsat—War in Syria has “devastated” the country’s economy, which has contracted by more than 50 percent since the start of the Syrian conflict in 2011, according to London-based think-tank Chatham House.
In a research paper, Syria’s Economy: Picking up the Pieces, published on Tuesday, the organization said inflation in the country had averaged 51 percent between January 2012 and March this year, with the Syrian pound depreciating in value by more than 80 percent since the start of the conflict in 2011.
Among the key industries most affected since 2011 is the country’s crucial energy sector. Before the start of the conflict state oil production reached 387,000 barrels per day (bpd), with oil exports in 2010 accounting for some 20 percent of the country’s economy. Since the war, production has shriveled to less than 10,000 bpd in 2014.
Meanwhile, the Islamic State of Iraq and Syria (ISIS), which according to one estimate now controls 50 percent of Syria’s landmass, now also controls numerous oilfields in the country, providing it with the capacity to produce some 60,000 bpd—though the US-led anti-ISIS coalition’s airstrikes should have reduced this, the report adds.
The extremist group’s recent capture of Palmyra has also put the country’s phosphate exports, valued at 100 million US dollars in 2014, at serious risk. A major electricity generating project began in the area in 2011, and should these facilities also fall to ISIS, the country’s already stretched electricity generating capacity—which has fallen 70 percent since 2011—will also be severely affected.
The Syrian government now relies on oil supplies and credit from key ally Iran, but the report points out that this aid comes with several “political and economic conditions.”
The report also says that despite continuing to function under the guise of a national administration, the government’s legitimacy has been effectively eroded as the conflict has continued.
“A war economy has emerged in which groups such as ISIS, the Kurdish [People’s Protection Units] PYD and rebels in the northwest and the south have established autonomous economic spheres, and in which the role of international aid in sustaining the population has assumed increasing importance,” it says.
Food production in Syria has also been severely affected since the conflict began. Wheat production almost halved between 2011 and 2014. Meanwhile, poultry production has dropped by more than 50 percent and the country’s herds of sheep, cattle and goats have been reduced by 40 percent since 2011. Major crops such as olives have also been affected, with production halving since the start of the conflict.
Since the start of the war more than 3.5 million people have fled the country, most as refugees, while at least a third of the population have been internally displaced. The UN estimates a quarter of a million people have been killed in the conflict since 2011.