IMF says Mideast conflicts wiped out gains of a generation

AP , Friday 16 Sep 2016

Christine Lagarde
International Monetary Fund (IMF) Managing Director Christine Lagarde takes part in a news conference with Canada's Prime Minister Justin Trudeau (not pictured) on Parliament Hill in Ottawa, Ontario, Canada, September 13, 2016. (REUTERS)

Conflicts in Middle Eastern countries such as Iraq, Libya, Syria, and Yemen have erased "development gains for a whole generation," including driving up already high levels of poverty and unemployment, the head of the International Monetary Fund said Friday.

The international community must be prepared to scale up long-term development aid in the region to rebuild infrastructure and institutions, IMF chief Christine Lagarde wrote in a blog accompanying a report by the fund on the economic cost of conflict in the Middle East.

More than $11 billion pledged by donor countries for Syria and the region through 2020, if indeed delivered, "would not be enough given the magnitude of the crisis," she wrote. Aid should come in the form of grants and concessional loans to ease the financial burden on the countries receiving the support, she added.

Lagarde noted that more than 20 million people in the region are displaced and an additional 10 million are refugees, more than at any time since World War II. "The international community has a major responsibility in helping countries in the region overcome this situation," she wrote. "We are ready to do our part."

The IMF report and Lagarde's comments were released ahead of a high-level U.N. summit next week on refugees and migrants.

The fund said that since the middle of the 20th century, the Middle East and North Africa have experienced more frequent and severe conflicts than any other parts of the world.

Conflict has pushed countries like Iraq, Libya, Syria, and Yemen "further into fragility, erasing previous development gains for a whole generation," Lagarde wrote.

For example, Syria's economic output, or Gross Domestic Product, is estimated to be less than half of what it was in 2010, a year before the outbreak of conflict there. Inflation, meanwhile, rose by almost 300 percentage points in May 2015. Yemen lost between 25 percent and 35 percent of its GDP in 2015, the report said. 

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