Publication: Losing the Gains of the Past: The Welfare and Distributional Impacts of the Twin Crises in Iraq 2014
Date
2016-02
ISSN
Published
2016-02
Author(s)
Abstract
Iraq was plunged into two simultaneous
crises in the second half of 2014, one driven by a sharp
decline in oil prices, the other, by the war against the
Islamic State in Iraq and Syria. The severity and recurrent
nature of these crises demand a fast understanding and
quantification of their welfare impact, which is critical
for policy makers. This paper employs an innovative
extension of the micro-simulation methodology to provide an
ex ante estimate and analysis of the complex and dynamic
poverty and distributional impact of the twin crises. The
results show an almost complete erosion of the welfare gains
of the past, with poverty falling back to 2007 levels and a
20 percent increase in the number of the poor. While the
incidence of poverty is higher among internally displaced
persons than the rest of the population (except in the
Islamic State–affected governorates, where poverty is
higher), internally displaced persons make up only a small
proportion of Iraq's eight million poor in 2014. The
rest comprise of households who already lived below the
poverty line, or those who have fallen below the poverty
line in the face of the massive economic disruptions the
country is facing. The welfare impact of the crises varies
widely across space, with the largest increases in poverty
headcount rates in Kurdistan and the Islamic State–affected
governorates. Yet, the poorest regions in the 2014 crisis
scenario are the same as in 2012, the currently Islamic
State–affected, and the South, with poverty rates of 40 and
30 percent, respectively. Although the simulated results are
not strictly comparable to ex post micro data estimates,
because of survey coverage constraints, overall the results
are very much in line, particularly in Kurdistan and the South.
Citation
“Krishnan, Nandini; Olivieri, Sergio. 2016. Losing the Gains of the Past: The Welfare and Distributional Impacts of the Twin Crises in Iraq 2014. Policy Research Working Paper;No. 7567. © World Bank, Washington, DC. http://hdl.handle.net/10986/23900 License: CC BY 3.0 IGO.”
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