Introduction

As conflicts in the Middle East and North Africa turn toward de-escalation, the prospects and challenges of reconstruction have become more apparent. Four countries caught up in conflict—Syria, Libya, Yemen, and Iraq—are asking whether and how they can go through a successful process of postconflict reconstruction in light of the current power dynamics domestically, regionally, and internationally.

Postconflict reconstruction is not inevitable. Rather, its scope, pace, and scale depend on existing geoeconomic dynamics in conflict countries—in other words, how geopolitical considerations affect the use of economic resources. They guide where aid, credit, or investment flows in accordance with the political objectives of regional and global powers. Reconstruction may, therefore, represent a new phase in the rivalries among domestic, regional, and global actors involved in a given country. That is why postwar outcomes in each will be defined by alliances and rivalries that cut across Middle Eastern and North African conflicts. Their interrelationships can provide a multifaceted way of looking at how postwar reconstruction is tied to regional power plays.

The Prerequisites of Reconstruction

Economics clearly impacts political outcomes linked to reconstruction, visible in the four prerequisites of a successful reconstruction process. Each factor determines whether and how reconstruction takes place. The prerequisites are, first, the availability of economic resources—mainly but not exclusively financial—for reconstruction; second, the manner in which a war ends or might end; third, the presence or absence of a political process nationally or regionally; and fourth, the prewar economic structures, institutional legacies, and connections of a country.

A successful reconstruction process is characterized by effective statebuilding and a long-term, sustainable, and balanced economic recovery. In the absence of these features, or some of them, reconstruction is impaired, which increases the latitude of outside actors to leverage reconstruction to advance their agendas.

The first requirement, the availability of resources, is a necessary but insufficient condition for reconstruction. The abundance of domestically and externally generated resources may fail to launch and uphold the political and economic underpinnings of reconstruction. Some countries may lack the territorial integrity and institutional efficiency to exploit their own resources. Moreover, political factors, such as postwar regime dynamics and the consolidation of new elites, shape the opportunities for accessing resources for reconstruction. They define the local sociopolitical constituencies to which funds would flow, as well as the regional and international allies participating in reconstruction. For instance, some governments in countries at war might face sanctions that deprive them of investment and loans.

The way a war ends is also essential for what comes afterward. The wave of civil conflicts in the Middle East and North Africa has considerably weakened already troubled nation-states, often leading governments to lose their monopoly over the use of violence and compromising their territorial integrity. However, such situations do not necessarily pave the way for new, more coherent states because of secession, partition, or the triumph of central governments over rebellious groups and territories. Rather, they often lead to perpetual sociopolitical and security fragmentation within entirely dysfunctional states. High levels of such fragmentation tend to persist in post–civil war situations and have significant impacts on reconstruction in three interrelated ways.

First, they undermine security, a precondition for domestic or foreign investment. This, additionally, hinders humanitarian aid necessary for the resettlement of internally displaced persons and refugees.

Second, they thwart the unity of national markets, which is directly related to the territorial integrity of postwar state orders. This prevents the enforcement of basic regulations governing economic activity, such as taxation and the pricing of subsidized goods and services as well as public services. Market unity is also essential for production and exchange, therefore for a viable economic recovery.

Third, persistent fragmentation is often associated with the reconfiguration of state-business networks to the advantage of warlords who have entered business. These so-called criminal entrepreneurs operate primarily by providing protection or engaging in different forms of violence, such as looting, asset stripping, and extortion. This means more displacement of productive activities by intermediation—including smuggling, trafficking, and other black market operations—as well as by engaging in openly predatory activities encroaching upon the property of other social and market actors. These dynamics make it hard to exit from the civil war economy, even after major hostilities have ceased.

Past experiences in countries with weak state institutions confirm this. In countries such as Afghanistan, the Democratic Republic of Congo, and El Salvador, warlords-cum-businessmen came to dominate the economy after the end of civil wars. These individuals were able to normalize their status and manipulate economic incentives in their favor, where the supply of violence and protection, the looting of natural resources, and the recruitment of fighters become prevalent economic activities engaging much of the population.

The presence and dynamics of a political process to end wars establish the mechanisms through which a redistribution of costs and rewards can take place among sociopolitical groups in a postconflict situation. Conversely, the absence of such a process means preserving a state of nonpeaceful interaction, be it in the form of full-fledged civil wars or lower-intensity forms of violence—assassinations, guerilla warfare, terrorism, or intensive repression. Overall, the existence of a political process in a postwar setting, which depends to a great extent on the manner in which the war ended, is quite consequential for the possibility of reconstruction and how it occurs. It is also intimately related to the political aspects of reconstruction, whether directly through power-sharing or co-optation mechanisms or indirectly through establishing rules that govern how rents are to be redistributed. This has repercussions for the building of coalitions and the legitimization of postconflict political authority.

A political process normally exists at the national level, as it has to do with the reconstitution of the state and the rebuilding of state institutions. However, in countries that have been though war and are deeply divided, regional and international actors are often involved as influencers, mediators, arbiters, or spoilers. Therefore, they can become part of this process. Conversely, the absence of security and political arrangements in the Middle Eastern and North African countries at war risk turning attempts at reconstruction and recovery into extensions of regional and international rivalries.

Finally, the prewar economic legacy of a country is also important in determining if reconstruction leads to longer-term recovery and not just the physical rehabilitation of countries damaged by war. Economic legacies can represent either opportunities or constraints that define the impact of reconstruction from the political and economic perspectives. They can allow or hinder inclusive development in which people take part in the production and distribution of value to influence national reintegration and statebuilding.

Two interrelated factors are worth emphasizing. The first is that countries that depend heavily on rents—derived from natural resources, foreign remittances, or foreign aid—have less of a chance of engaging in long-term inclusive development. That is because their productive sectors tend to be weak and their GDP growth relies significantly on external sources of capital or on very narrow domestic sources, government revenues, and exports.

The second is the size and vibrancy of the private sector. The larger the share of the prewar private sector in terms of employment, output, and investment, the more likely reconstruction will lead to inclusive development and longer-term recovery. Countries with access to substantial rents tend to have bloated public bureaucracies and small private sectors. These are usually less productive and recycle rent rather than create value—whether through real estate speculation or financial intermediation and brokerage. Moreover, societies in which such rent-seeking activities prevail are often more prone to civil conflict.

Prospects for Reconstruction in the Middle East and North Africa

In Syria, Libya, Yemen, and Iraq, the prospects for successful post-conflict reconstruction look grim. In all four countries, the prerequisites for success are either partly or wholly absent. Moreover, national, regional, or global dynamics make it more probable that the end of wars in these countries will not represent an end to conflict. Either reconstruction won’t happen at all due to a lack of resources, intense security, and political fragmentation, or it will become a continuation of conflict by other means involving local and outside contenders. The final outcomes might be lower-intensity, more localized conflicts or the consolidation of war-generated security or economic arrangements.

Syria

Syria misses almost all the prerequisites for a successful postwar reconstruction process. The geoeconomic factors governing the conflict there suggest that the country will continue to face high levels of political and security fragmentation and have limited access to funding. Given Syria’s limited resources and the heavy toll that war has had on its infrastructure and population, the country will have to depend almost entirely on foreign funding for reconstruction through aid, credit, and investment. All three are curbed by geoeconomic factors. The capital-rich countries of the European Union, the United States, and the Gulf Cooperation Council (GCC) are all unlikely to extend funds to a regime-led reconstruction process. The United States has imposed sanctions on the Syrian regime that are aimed at blocking its access to foreign investment and credit. Reconstruction efforts in areas occupied by Turkey are already in line with Ankara’s de facto annexation of those parts of Syria. Even though Syrian President Bashar al-Assad’s allies such as Russia and Iran plan a long-term military presence in Syria, they do not have the resources to fund reconstruction, due to low oil prices and the sanctions they, too, face. Nor is Syria rich in natural resources, which could have helped to attract Chinese investors, as in Angola for instance. The final outcome of this situation might be the long-term abandonment of any large-scale reconstruction endeavor altogether.

In addition, Syria’s high levels of security and political fragmentation—resulting from the military presence of Syrian government forces, loyalist and opposing militias, and allied as well as hostile foreign forces—make the country inconducive to domestic or foreign private investment. A strong and vibrant private sector was a positive feature of prewar Syria. However, the conflict forced many private investors to depart for neighboring countries. Moreover, the lack of funds, high levels of security fragmentation, and territorial segmentation of national markets won’t bring investors back. That is why the dynamics of the war economy will most probably dominate the postwar scene.

Syria has been described as a fierce state, where the rulers prioritize regime survival above all else, as opposed to a postwar fragile state. Therefore, reconstruction, like the return of refugees, may not be a concern if it is incompatible with the ruling elite’s and its allies’ continued domination over security and political affairs. Indeed, so far, all attempts at using financial carrots and sticks to change the regime’s behavior have utterly failed.

Yemen

Yemen shares many shortcomings with Syria. It is not an oil-rich country and therefore will depend almost completely on foreign funding for any meaningful reconstruction. Worse, these funds are mainly expected to come from the very GCC states that have been waging war in Yemen for the past five years. At the same time, if the war were to end today, reconstruction would likely reflect Yemen’s inherent fragmentation. Outside funding would flow into the spheres of influence of regional powers—mainly Saudi Arabia and the United Arab Emirates (UAE)—whose strategic goals have diverged significantly in the past two years. Regions in northern Yemen controlled by the Iran-backed group Ansar Allah, better known as the Houthi movement, might be cut off from foreign funding given Tehran’s inability to finance significant reconstruction. As this is Yemen’s most populated area, a majority of Yemenis may not benefit from postwar reconstruction at all.

The Houthi rebels have controlled the Yemeni capital Sanaa since 2015. Conversely, the internationally recognized government’s presence in Aden has been contingent on reaching an agreement with the southern separatists who drove the government into exile in August 2019. Yemen has never been a consolidated nation-state during its modern history, and at war’s end it will likely become an agglomeration of small de facto statelets sponsored by rival foreign powers. In the absence of a political process, reconstruction will be dissociated from any attempt at reconstituting the state, making the possibility of conflict among local contenders and their foreign patrons more probable.

Libya

To its detriment, Libya shares many impediments to reconstruction with Yemen, despite being oil rich. The country has not had a central government since the collapse of Moammar al-Qaddafi’s regime in 2011. Geoeconomic regional dynamics have sustained the de facto partition of the country into a Government of National Accord (GNA)–led west and a Libyan National Army (LNA)–led east, in addition to an ungovernable south. The military confrontation between the GNA and the LNA has drawn in outside actors, each pursuing political objectives of its own. Turkey and Qatar have supported the GNA, and Egypt, France, and the UAE have supported the LNA, leading to a military stalemate. This situation might be perpetuated in the event of an internationally mediated oil-sharing agreement between the hostile sides, as each will have the resources to sustain its autonomy, reinforcing Libya’s divisions.

Even once the conflict ends, high levels of fragmentation, not only between but within each bloc, will continue to hinder investment in reconstruction. This will probably prolong the realities of the war economy, including trafficking in humans, as well as arms, oil, and other goods. The illicit networks engaged in such actions, which are organically linked to militias, warlords, and local chieftains and extend from the Sahara to the southern shores of Europe, will resist any attempts by a central government to extend its authority over the country.

Moreover, Libya has not inherited a vibrant private sector from the preconflict years. It has been a textbook case of a rentier state, with oil constituting 65 percent of the country’s GDP, 96 percent of export revenues, and nearly 98 percent of government revenues in 2010, just before the uprising against Qaddafi. This does not promise real economic recovery or inclusiveness in the future. Rather, it will most probably perpetuate the current way of functioning, in which government bodies buy allegiance or social peace by putting militias on their payroll, further precluding state reconstitution or national reintegration.

Iraq

Only Iraq stands out as partially promising with regard to postconflict reconstruction, albeit cautiously so. After the government regained all of its territory from the Islamic State in 2017, large-scale military operations ended. While the country enjoys a national political process through parliamentary and local elections, it is also highly fragmented and locked in institutionalized ethnosectarian identity politics. Iraq is also at the center of the tensions between the United States and Iran. Thus far, this confrontation has played out on Iraqi territory, starting with the U.S. assassination in January 2020 of Iranian General Qassem Soleimani, the commander of the Quds Force of the Islamic Revolutionary Guard Corps, and Iranian retaliation against U.S. bases in Iraq using pro-Tehran militias. Furthermore, popular demands for political change have persisted in Iraq, with protestors challenging the power of the country’s ruling elites.

Iraq also has resources of its own that can be used for reconstruction, given the country’s oil wealth. However, this comes with a high dependency on rents, in which oil accounted for 58 percent of GDP, 99 percent of budget revenues, and almost 90 percent of total exports in 2015. This reality has sustained crippling levels of corruption and state capture by political parties and their militias, in addition to perpetuating political and security fragmentation.

Conclusion

Reconstruction is a political and economic process that involves rebuilding countries and reconstituting the relationship between state and society after the end of conflict. That is why the interplay between political and economic factors is essential for determining the prospects for postwar stabilization, especially in an environment of regional competition in the Middle East and North Africa.

Even oil-rich countries such as Libya and Iraq will probably not be able to exploit their riches for an effective reconstruction process unless they address basic institutional questions. These include ensuring the unity and integrity of national bodies in charge of oil production and revenue management. High levels of corruption, security fragmentation, and the persistent dynamics of a war economy can become insurmountable. In Libya, for instance, the conflict between the east and west has virtually paralyzed the oil sector for months. Similarly, in Iraq, discord between Baghdad and the autonomous Kurdistan Regional Government hinders the exploitation and management of Iraq’s oil riches for reconstruction.

This is even truer in the case of oil-poor countries such as Syria and Yemen, where resources are not readily available. Those countries will require more substantial institutional advances, including putting in place credible law-enforcement bodies that can enhance individual security and protect property. Such measures make possible a sustained postwar recovery, which both countries are not likely to achieve in the absence of a political process.

Therefore, reconstruction is not necessarily a conflict-ending phase, as it may only trigger new regional and international rivalries. As a geoeconomic process, it is not likely to occur or produce enduring stability unless the semblance of a political process exists through which the redistribution of losses and rewards can be decided upon. This is missing more or less in all the countries at war in the Middle East and North Africa, with the partial exception of Iraq. In the current regional and international realities, no political process can be launched or sustained unless outside states and nonstate actors are involved directly, through mediation and arbitration, for example, or indirectly, through their local allies or proxies.

Given this situation, continuing antagonism between powerful regional and global powers will either undermine reconstruction efforts or weaponize them as a nonmilitary dimension of continued strife.Either way, effectual reconstruction is unlikely to take place in the foreseeable future in Syria, Yemen, Libya, and Iraq, a situation that will most probably produce long-term instability.

About the Authors

Amr Adly is an assistant professor at the American University in Cairo. He is the author of Cleft Capitalism: The Social Origins of Failed Market Making in Egypt (Stanford University Press, 2020).

Ibrahim Awad is a professor of practice in global affairs and the director of the Center for Migration and Refugee Studies at the American University in Cairo.

Muhammad Alaraby is a senior researcher in international affairs and security. His research is focused on geoeconomics and geopolitics of the Middle East and North Africa region and applied foresight. He is on Twitter @MMALARABY.