Reconstruction as a political-economy issue: The case of Syria

There can be no meaningful separation between state-building, peace-building, and revival at the end of a conflict, especially as post-conflict state institutions are the only apparatus which can be somewhat directly or indirectly accountable toward their populations for the management of the country.

Members of “You Destroy and We Rebuild Brigade” work at a construction site, in the rebel-held town of Saida, in Deraa province, Syria May 24, 2017. Picture taken May 24, 2017. Alaa Al-Faqir/Reuters

What is post-conflict reconstruction?

Between internal wars and disasters

The setting in motion of recovery in a post-conflict scenario differs greatly from that required following a natural disaster. While the extent of damage may be comparable, the longer the conflict, the more economic and complex social mechanisms change the nature and magnitude of the efforts needed to retrieve a sustainable post-war outcome which can ensure steady progress toward decent livelihoods and an acceptable prospective for the affected populations.

Essentially, wars drastically alter the distribution of wealth within a society and severely reduce its human capital, especially if such conflict is an internal “civil war” or a “proxy war” employing local agents.

In such cases, societies become divided into factions with grievances and greed. As a result, one of the major issues in post-conflict recovery is how to deal with these grievances as well as with the greed of the “war lords” and profiteers who emerge from the “war economy”.

These challenges become all the more critical when one considers who will manage the transition to peace, stability and resilience -and how. State institutions suffer significantly in internal conflicts – contrary to the case of wars between nations – and their legitimacy is shaken. The other actors in the public and private sector constantly readjust their positioning and interests based on asymmetrical information and ever-shifting alliances. In this regard, international experience shows that proper management of the post-conflict situation requires a careful assessment of how these actors are to be engaged in the process; this is key for ensuring quick recovery and avoiding the return of war or instability.

Post-war recovery then depends heavily on the conditions in which the conflict is ended and settled, in particular how state institutions are able to deal with the social and economic aftermath – essentially a political-economy matter.

Reconstruction or revival

Different terminologies are used to characterize the efforts to deal with post-conflict situations: reconstruction, recovery, peace-building, state-building, etc. All bring some confusion and downsize the interactions between the different fields where the efforts should necessarily be made.

Reconstruction tends to exclusively imply re-building housing and infrastructure to a level which existed before the conflict. This could prove to be impossible or not advisable, especially if the damage occurred in zones considered unsafe, and if the return of internally displaced people (IDPs) and refugees is hindered by fears of lack of security in a context of poor social cohesion.

This becomes all the more delicate if returning families have grievances because the initial micro-social environments have been de-structured. Also, this perception is static and does not account for the dynamics of growth of the number of households in a long conflict.

Physical reconstruction also needs a functioning economy providing construction materials and qualified human resources operating within predictable supply and demand patterns. This often requires rethinking the regional planning framework of the country as well as revising local urban plans to create new situations where the root causes of the conflict can be mitigated. This means a necessary encouragement of private investment and economic activity at the household scale, and the in-depth consultation of local civil society for consensus on the urban changes needed, particularly of their implications on property rights. All this necessitates the creation of a new political environment ensuring confidence of all stakeholders – a condition that may not be readily available in the post-conflict

These multiple post-conflict efforts are complex and interconnected, posing social, economic, and political development challenges to a country. Setting aside whims of nostalgia to return to the pre-war status, or a simplification of the root causes of the conflict to whitewash deeper political problems, there need to be conscious efforts at positive transformation, at revival, and rebirth. A transformation where new narratives have to be forged and incentives have to be provided to shift the political economy of the war toward a new modus operandi.

More modestly, such efforts could be simply named “post-conflict development”.

Revival and foreign powers

The internal conflicts which emerged following the “Arab Spring” have been heavily influenced by foreign powers, from those bordering the concerned countries to powerful global powers. Most of these conflicts have even been characterized as “proxy wars”. The end of these conflicts therefore requires that a deal be reached between these powers, most commonly under United Nations auspices, on the influence they agree to have on the concerned countries. However, such agreements may only be reached in a piecemeal manner and often in bilateral or trilateral incremental processes. The emerging post-war governing authorities never operate in a vacuum, but under the influence of international brokerage and competing powers.

This could make the management of a country’s post-war rehabilitation more cumbersome.

While the United Nations provides vital humanitarian assistance to afflicted populations during conflict and is a necessary partner for post-conflict recovery, neither its multiple and often overlapping institutional mandates nor those of foreign powers influencing the situation can effectively play the role of a genuine state institution. The dismantling of former state institutions, instead of reforming them, has had disastrous consequences on post-conflict management as demonstrated by the case of Iraq, when the national army was disbanded leading to a security vacuum, and the “de-Baathification” program emptied key institutions from essential human resources to manage basic services.

There can be no meaningful separation between state-building, peace-building, and revival at the end of a conflict, especially as post-conflict state institutions are the only apparatus which can be somewhat directly or indirectly accountable toward their populations for the management of the country.

Revival cost, foreign aid, and the resource curse

Political and financial institutions often publicly announce fanciful figures about the costs of reconstruction, such as the $400 billion needed for Syria and the $30 billion only for Yemen. These confusing figures result mainly from economic estimations of the losses of Gross Domestic Product (GDP) comparatively with the natural pace of the economy if war had not occurred. However, these losses are theoretical and meaningless for any post-war approach, and these amounts have nothing to do with the costs of revival or reconstruction.

Typically, the cost of reconstruction encompasses the amounts necessary to build housing and infrastructure for the non-displaced and for the returning IDPs and refugees. It also includes the public spending needed to promote the private sector to enable it to invest to provide the materials necessary for the reconstruction process, as well as to retrieve the economic activity and stability of the country, i.e. a system of production which can sustain the livelihood of the population, its employment and its financial equilibrium.

Whatever this estimated cost, it is not all needed in foreign aid and in hard currencies. Foreign aid (or foreign loans) is only needed to pay for the imports of what cannot be produced locally or for functions which cannot be performed by the country’s labor force, and when the state’s foreign reserves in war are usually depleted. In the initial reconstruction period, rehabilitation efforts usually come in the form of humanitarian aid gradually shifted to support the stabilization of the livelihood of deprived populations.

Therefore, peace-building and economic recovery must include reintegrating the population – including former combatants – in employment, and activating local production and enterprises.

But there are risks. For example, economic literature warns about the “aid curse” where the post-conflict ruling elite tends to redirect aid money to their own interests, or to support political economies which reinforce their social and political positioning, even when  pretending to be using it nominally for reconstruction and economic revival. This is typically the case of post-war Lebanon, where the aid curse played a role similar to that of the “resource curse” of Iraq and Libya: oil revenues were captured by the new ruling elite and were used to hire extensively in the public administration on the basis of cronyism and nepotism, supported by sectarian quotas, consecrated as a necessary part of the formula to end the conflict.

Another risk is that post-conflict generations may be required to shoulder financial burdens they may not be able to repay. This is in particular due to the changing nature of the non-humanitarian support for post-conflict countries which nowadays is no longer made of grants, but of loans that must be reimbursed by the current and next generations. Contrary to the 1970’s, most of the recent “aid”, even from the oil-rich Gulf countries to their “sister” Arab countries, is made of loans and central bank deposits.

There is an upside to this, however. The economic literature indicates that the absence (or the scarcity) of rent-seeking aid and supply side reconstruction funds or resources could act as a strong motivation to force post-conflict leadership to embark on effective post-conflict developmental reforms, and for the population to seek meaningful employment.

Post-conflict housing reconstruction in Syria

One of the main characteristics of the Syrian conflict is the widespread destruction and damage in housing and infrastructure all over the country. According to the UN, 140,000 buildings were damaged, 40,000 of which were completely destroyed, and 50,000 severely damaged.

Contrary to the Lebanese civil war, where the frontline and the resulting devastation were static and stabilized throughout the conflict years, the frontlines in the Syrian civil war were very complex and in continuous evolution as the fighting intensified. Between 2011 and 2019, all urban centers as well as a vast part of the territory’s villages and countryside became major battlegrounds.

Fierce fighting and bombing took place in the downtown areas of major cities such as Aleppo, Homs, Deraa, Raqqa, and Deir Ez Zor affecting the core “soul” of these cities and their historical heritage. Other intense fighting occurred in massively populated suburbs and peri-urban areas, such as the case of Damascus. Small villages were completely erased and depopulated such as in the countryside of Homs and Idlib. The devastating effects of the aerial bombing of Raqqa and some neighborhoods of Aleppo and Damascus are not unlike those of World War II Europe and Japan.

Syria’s far-reaching and overwhelming devastation adds a major difficulty for reconstruction efforts. Any actor involved in these efforts must determine where to start once the war ends and where to prioritize reconstruction. There are no easy answers because where some may choose to prioritize rehabilitation could lead to grievances and social tensions with other actors.

Destruction and informal housing

UN and relief agencies’ investigations in Syria have revealed that severely damaged and destroyed areas in Syria have specific characteristics, with the highest share of damage occurring in informal urban areas. These are areas where construction took place without permit before and during the conflict. They developed as a result of the absence of urban planning to adequately address the needs for housing to accommodate household growth, both due to the “youth bulge” and to the acceleration of rural-urban migration.

Prior to the conflict, informal urban construction reached 30 to 40% of the total stock of housing (with higher densities, they may constitute even higher percentages of the settled population). But it is worth noting here that most of these informal areas were not necessarily associated with poverty.

Analysis of urban areas prior to 2011 reveals that a number of informal areas were considered unsafe and unsustainable, and required re-planning and restructuring. There was also excessive construction on green – or agricultural areas. However, for other areas, the situation differed little from “regularized” neighborhoods, with the main difference being the lack of formal building permits and accountability over the provision of public urban services.

Since its beginning in 2011, the conflict in Syria has effectively become one of fighting between formal and informal neighborhoods, essentially between two different social categories.

As a result, when we fast-forward to 2019, the issue of reconstruction now becomes far more complex and intricate when applied to informal urban housing. All this creates significant concerns with respect to property rights, urban planning, and infrastructure rehabilitation.

The complexities are exacerbated when considering post-conflict reconstruction projects awarded to crony companies which are seeking to replace informal urban housing with expensive speculative real estate projects. This is the case of Marota City, formerly known as the Damascus suburb of Bassateen Al-Razi, which suffered comparatively little damage during the conflict between government forces and opposition groups, but was re-appropriated in recent years for major construction projects. All formal and informal buildings in Marota were razed to make way for new high-rise luxury developments.

Eligible owners who could provide proper documentation of land titles were transformed into shareholders in a land-pooling project. Similar “deconstruct-and-reconstruct” projects, driven by policies and not war, were observed in informal areas of other cities, as in Hama, where there was no major fighting.

The challenge then becomes how to apply the U.N.’s “Pinheiro Principles” which protect property rights, and ownership of land and housing for refugees and IDPs. It is directly linked to the determination of how to resettle returning refugees and IDPs who were initially displaced mainly from these informal neighborhoods.

Destruction and heritage

The old town of Aleppo, designated as a UNESCO World Heritage Site and on the List of “World Heritage in Danger” since 2013, has suffered considerably from the conflict. This is also the case of the old town of Homs and of the ruins of Palmyra. Many ancient monuments and sites, such as the eighth century Umayyad Mosque in Aleppo and the old covered souks, have also been severely damaged.

Any “reconstruction” efforts must therefore consider whether the heritage assets should be rehabilitated to their pre-conflict status. Even from a UNESCO perspective, heritage at a certain point of history is the result of previous constructions and destructions. The present war could then be considered as one step of this historical process, which opens the way to innovate and create new perceptions of heritage and authenticity; a dilemma recently demonstrated with the fire of “Notre Dame de Paris”. How these areas and symbolic monuments should be rebuilt depends, then, on a subtle projection of the city and the country’s identity, on its past and its future.

However, the pressures for gentrification and for crony real estate projects are also part of the realities of post-conflict development, which could hinder any subtlety in the projection on heritage and identity.

Widespread damage and decentralization 

The sad fact that the devastation in Syria is widespread creates a specific challenge for post-conflict reconstruction. The details of urban planning, the settlements in the informal areas, as well as the property implications (Pinheiro Principles) could be overwhelming and impossible to be tackled at a central level. They have to be mostly addressed by local authorities with significant consultation of the population.

However, given the large displacement of local populations escaping the conflict, a vacuum is created which is filled by the new emerging elites strengthened by the war economy. These elites could take control of the post-conflict local councils, being elected locally or nominated by the central government. Conflicts of interests may arise between the original registered residents, prior rural migrants who had flooded the city in previous decades and are still living there, and the IDPs and the refugees. The war created massive new rural-urban migration, and new populations have settled during the conflict in vacated houses or have built informally their own homes.

There is then a necessity to strengthen decentralization and good governance at the local level, as well as conflict resolution mechanisms, to enable a socio-political process at the local level that can ensure a gradual return of the displaced and refugees, and a reconstruction process based on a socially-oriented developmental model. In parallel, a central framework based equally on good governance and equity should be established through laws, regulations, and oversight mechanisms setting the general rules and priorities without choking the local capacity to negotiate local solutions. Such equilibrium between the necessity of decentralization and the central regulations and oversights is key. These contentious issues should be part of the political negotiations on post-conflict transition.

In that respect, it is worth noting that Syria has never passed as many far-reaching laws and regulations as those enacted during the years of conflict specifically focusing on construction, real-estate development, the creation of holding companies by public administrations and religious endowments, and so on.

The new legal environment is moving toward a neo-liberal developmental model, replacing the small private owners’ traditional housing construction model in Syria by large speculative enterprises. This will invariably infringe on the basic rights of return as enshrined within the Pinheiro Principles.

Construction during conflict

A particular characteristic of the Syrian conflict is that construction never stopped during the violence. The years 2011 and 2012 saw the largest number of housing construction ever experienced in Syria, as state institutions weakened or purposefully looked the other way allowing informal constructions to take their course. Such construction continued in the following years, but at a slower pace and in different areas than the major cities, and away from the frontlines. This is not at all surprising if we consider what happened during the long Lebanese civil war.

The total new stock of buildings and dwellings constructed during the conflict has been estimated to equal the number of destroyed and severely damaged housing; however, major geographical disparities exist. Some small cities increased significantly in size as the still residing population continued its growth and accommodated new arrivals of migrants and IDPs needing housing – those fleeing the war-ravaged districts and unsafe rural regions, as well as those seeking better economic and livelihood opportunities. Only a small share of the internally displaced lives in precarious settlements such as schools or tent camps.

This has created new realities to deal with in the reconstruction recovery process, where supply and demand patterns at the local level betray global quantitative estimates. Some of these realities include the new social bonds and the new economic functions emerging in the newly developed cities and neighborhoods.

The way forward

Post-conflict housing reconstruction in Syria is essentially a political-economy issue and process due to its technical, economic, financial, and social components, and because it is strongly linked to the return of the displaced/refugees and the developmental model for recovery. Its major aspects should be part of the political negotiations for peace-building and new governance. The equilibrium between decentralization and efficient central management is key, as well as the respect of human, social and property rights.

The much exaggerated figures for the financial investments and aid needed for housing reconstruction in Syria in the context of international sanctions aims at shifting attention away from key challenges and urgent reforms, killing hope for recovery and creating an atmosphere of necessary dependency on power players, “war lords”, and foreign countries.

Samir Aita is a Syrian economist and president of the “Cercle des Economistes Arabes” think tank. He is a consultant to UN agencies, teaches academically, and is formerly the editor-in-chief of Le Monde diplomatique Arabic editions.

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