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GTAP Resource #4805

"Economic Effects of the Syrian War and the Spread of the Islamic State on the Levant"
by Ivanic, Maros and Elena Ianchovichina

Final abstract

This paper uses a global computable general-equilibrium framework with new detail on six Levant countries—the Arab Republic of Egypt, Iraq, Jordan, Lebanon, the Syrian Arab Republic, and Turkey—to quantify the direct and indirect economic effects of the Syrian war and the advance of the Islamic State on the Levant. Syria and Iraq bear the brunt of the direct economic costs, while the other Levant countries lose in per capita but not in aggregate terms. The fact that the Islamic State’s spread has undermined regional trade adds to varying degrees to the direct costs in all Levant economies and in the case of Syria and Iraq doubles the welfare losses. All these countries are foregoing opportunities to expand intra-Levant trade and the associated gains in economic efficiency and diversification. The average welfare effects are not indicative of within-country incidence, which varies among workers, landowners, and capitalists.

Methodology and results description

The simulation is executed on a version 8 GTAP data base that was split to include all of the economies that are directly affected by the Syrian conflict yet were not part of the database (Lebanon, Iraq, Syria, Jordan) The split was based on the available GDP, consumption and trade data (UN National Accounts, UN COMTRADE, WITS), and the negotiated tariff rates (trade agreements in the region).

The simulation is based on the available estimates of the movements of the refugees in the region, the level of capital destruction in Syria and the scope of the enacted trade embargoes and the envisioned changes in oil output. The simulation take into account two distinct parts of the implications of the Syrian conflict split into two subtotals: (1) the cost of undoing the prospective trade integration and (2) the cost of the war itself.

The results are presented in terms of GDP changes, sectoral output changes, trade volumes for the relevant countries and welfare changes.


Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2014
Created: Ivanic, M. (4/16/2015)
Updated: Ivanic, M. (4/16/2015)
Visits: 2,212
- Economic crisis
- Migration
- Technological change
- Multilateral trade negotiations
- Middle East

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