The Impact of Political Conflict on Economic Growth

The Impact of Political Conflict on Economic Growth

As consistently shown by history, conflicts impose immeasurable human suffering and come at a greater social and economic cost. Political conflict has an immense negative impact on economic development. Different forms of political conflict, such as sectarian violence, civil wars, regional tensions, and conflicts between states, slow economic activity and derail greater cooperation in trade. The loss of human life, institutions, human capital, and property destruction that characterizes these conflicts derails economic activity beyond active conflict (Rowntree et al. 251). Countries that have previously experienced conflict are trapped in a conflict trap due to uncertainty about the future, which scares away investors and slows their economic growth. Do you need urgent assignment help ?  Our homework help will you tons of energy and time required for your homework papers.

The Israel-Palestine Conflict

The Israel-Palestine conflict is among the many political conflicts globally that have derailed economic growth in their respective states. Palestine continues to experience deepening poverty and unemployment due to Israel’s blockade that has blocked Palestinians from accessing natural resources. The blockade means that Palestinians cannot access shared resources such as water. Besides, Palestinians cannot access an estimated 1.5 billion barrels of oil reserves in the West Bank (United Nations). On the other hand, the conflict has stripped Palestinians access to $2.5 billion of natural gas from the Gaza Coast (United Nations). If not for the conflict, Israel and Palestine would have been successful trading partners, considering they are neighbors. The economic difficulty in Palestine caused by denied access to critical resources would not be there if the two neighboring countries were peaceful.

Moreover, Palestinians would benefit from the huge labor market in Israel if it were not for the current conflict. Before the outbreak of the second Intifada in 2000, there was a free flow of laborers from Palestine to Israel. Many Palestinians, including undocumented ones, would cross to Israel to secure employment opportunities. However, Israel has restricted the flow of Palestinian immigrants seeking employment opportunities as security incidents involving workers with permits increase. Israel has developed sophisticated infrastructure to detect illegal immigrants and restrict the number of Palestinian populations moving to Israel (World Bank 14). Palestinians struggle to find employment in Israel due to the ongoing conflict between their country and their neighboring country. If it were not for the conflicts, Palestinians would reap the benefits of a globalized economy by working in a neighboring country.

Syrian Civil War

The civil war in Syria has set the country back in terms of economic, social, and human development. Syria’s GDP is now half of what it was before the war broke out. Besides, the country’s inflation has risen significantly, attaining high double-digit figures due to the war (Gobat and Kostial 10). Syria’s international reserves have also depreciated due to the weakening foreign-exchange value. If it were not for the war, Syria would be one of the biggest economic players in the region based on its economic endowment. Once peace is restored and pre-war conditions are attained, Syria will become a major economic player in the region in terms of human capital and as a foreign investment destination.

Also, Syria will revert to its previous status as an oil giant in the Middle East once peace is restored. Before the exacerbation of the Syrian conflict, oil production was 386,000 barrels per day (Gobat and Kostial 10). However, the figure has dropped sharply since the civil war broke out. With a 98% reduction in oil production in government-controlled areas, Syria now only produces only 9,000 barrels a day (Gobat and Kostial 10). The war also led to the destruction of transmission networks such as the natural gas pipeline. Once political stability is restored in Syria, the country will restore its energy resources and continue contributing to energy stability in the Middle East.

Connections between Political Conflict and Economic Conditions in the Middle East

There is overwhelming evidence to link conflict in the Middle East with reduced economic activity. The financial oil surpluses associated with the 1970s are now a thing of the past (Jaffe 29). Middle East countries, including Iraq, Saudi Arabia, Bahrain, Kuwait, Yemen, and Iran, continue experiencing a reduction in GDP rates relative to OECD countries experiencing increased GDP. Another economic difficulty facing these countries is the reduction of local manufacturing capacity. In particular, the Syrian civil war hinders the country’s manufacturing capability. A country experiencing manufacturing problems faces trade imbalances since it can no longer leverage regional markets. Only 8% of trade in manufactured products is a product of intra-regional trade (Jaffe 29). These conditions show how political conflict has negatively affected economic activities in the Middle East region.

In summary, widespread political conflict across the Middle East has significantly contributed to slowed economic activity in the region. The conflicts occur in the form of state-state conflict, as is the case with Israel and Palestine, leading to reduced trading cooperation. Also, civil war within a country like Syria has impeded economic activity. In the case of civil wars, manufacturing activity and investor confidence wanes, which eventually reduces overall GDP. For most countries in the Middle East, political conflict has reduced natural resource exploitation, affecting oil and natural gas production, which are critical sectors of the region’s economy.

Works Cited

Gobat, Jeanne, and Kristina Kostial. Syria’s Conflict Economy; IMF Working Paper N. 16/213, by Jeanne Gobat and Kristina Kostial; June 2016. 2016.

Jaffe, Amy. Middle East and the Gulf and Their Impact on Energy Supply, Security and Pricing Main Study Introduction: Defining the Issues of the Energy Security Debate.

Rowntree, Lester, et al. Globalization and Diversity: Geography of a Changing World. Prentice Hall, 2017.

United Nations. “Israel’s Practices against Palestinian Economy Exacerbating Dire Living Conditions in Occupied Territory, Syrian Golan, Senior Official Tells Second Committee | UN Press.” Press.un.org, 17 Oct. 2022, press.un.org/en/2022/gaef3574.doc.htm.

World Bank. Immediate Measures and a Long-Term Vision to Improve Palestinian Trade and Economic Outcomes.

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

The Impact of Political Conflict on Economic Growth

Compose a 3-4 page, double-spaced, typewritten document in 12 pt. font that discusses the following questions:
What economic changes could occur if Israel and Palestine achieved peace? If Syria could end its civil war, how would Syria contribute to the stability of the Middle East? Finally, what general connections might be found between political conflict and economic conditions throughout the region? Include specific examples, evidence, and statistics that support your claims.
In composing your report, use Google Scholar to identify any three websites as references that contain appropriate information, tables of data, graphs, etc. to construct your report. Include all three websites as references at the end of your document.