IMF Says MidEast Financial Fallout Wiped Out A Generation of Gains

IMF Greece Financial CrisisThe International Monetary Fund has released the results of a new study to discuss the economic impact of present conflicts in the Middle East and North Africa. In fact, the study calls the impact “massive and persistent,” which has resulted in vastly escalating inflation and a dramatic hindrance of currency value to incite a major immigration of refugees.

The authors of the report say that war has largely cut Syria’s gross domestic product by as much as one half and has reduced Yemen’s economy by at least 25 percent; and that unsteady oil prices cut out nearly 25 percent from Libya’s economy two years ago. Furthermore, conflicts originating in the Gaza Strip and the West Bank has both contributed to stalled economic growth for at least the past two decades.

And all this was during a time that the rest of the region grew approximately 250 percent over the same period.

Overall, analysts are now saying that the losses suffered out of conflicts in countries like Iraq, Syria, and Libya have erased the “development gains for a whole generation;” and this includes the driving up of already soaring poverty levels and unemployment.

As such, the head of the International Monetary Fun warns that it will be the responsibility of the whole of the international community to scale up long-term development aid goals within the region (of the Middle East) in order to help rebuild a proper infrastructure and more powerful financial institutions. Failing to do so, of course, could put more strain not only on this region, but also on the neighboring countries that will have to take on refugees—which continues to trickle out to other countries who may also be able to support.

Already, donor countries have pledged $11 billion to help Syria and the rest of the region through 2020. Still, though, IMF chief Christine Lagarde says this will not be enough “given the magnitude of the crisis.” She advises that the aid should come in the form of concessional loans and grants in order to ease some of the financial burden.

Lagarde goes on to note that more than 20 million people in the region have been displaced and 10 million more are refugees—with no place to go. This is more than at any other time since World War II. Thus, she also contributes: “The international community has a major responsibility in helping countries in the region overcome tis situation.”

Trying to instill some confidence, she also says, “We are ready to do our part.”

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