Kurdistan Region of Iraq

The Kurdistan region of Iraq is facing an economic and humanitarian crisis as a result of the influx of Syrian refugees which began in 2012 and internally displaced  persons  (IDPs)  in  2014.  The  region's  population  increased  by 28 percent over a short period, placing strains on the local economy, host community,  and  access  to  public  services.  This  book  provides  national and regional policy makers with a technical assessment of the impact and stabilization  costs  needed  for  2015  associated  with  the  influx  of  refugees and  IDPs.  The  stabilization  cost  for  2015  is  estimated  at  US$1.4  billion  in additional  spending  above  and  beyond  the  region's  budget.  This  estimate could  significantly  increase  should  the  crisis  persist  longer.  The  study highlights how prices and unemployment have increased, and refugees and IDPs entering the labor market are pushing wages down. A surge in violence led to supply side shocks. The ISIS crisis has had a significant effect on trade of goods and services. Transportation routes were disrupted. Foreign direct investment flows have declined and operations of foreign enterprises have been adversely affected. Disruption of public investment projects have had a  negative  impact  on  the  economy.  Based  on  the  World  Bank  estimates, economic  growth  contracted  by  5  percentage  points  in  the  region  and  the poverty rate more than doubled, rising from 3.5 percent to 8.1 percent. While the government has been responsive to addressing the needs of the displaced population up until now, more resources are needed to avert this humanitarian crisis and address the needs of the displaced population in the medium- and long-term. The report is an outcome of close collaboration between a wide spectrum of World Bank experts and regional government institutions and international partners.