The rubble in Gaza is still settling and the ink on the ceasefire is barely dry. Syria’s economy remains fractured by sanctions and patronage networks. Any prospect of peace in Yemen is threatened by fiscal collapse.
Yet waiting for stability before planning reconstruction is a luxury the Middle East can no longer afford. The question is not whether to engage, but how to finance recovery in places where governance is contested and donor appetite exhausted. The cost of delay is rising daily.
Each month without a credible reconstruction framework deepens displacement, hardens war economies and corrodes the fragile social contracts essential for peace. The challenge is not the scale of destruction — though that is immense — but the lack of coordination, capacity and credibility that has paralyzed past recovery efforts.
Iraq offers the clearest warning. Despite billions pledged after 2003, the country languished for years, crippled by corruption, weak institutions and hollow infrastructure. Money without governance frameworks does not rebuild states; it entrenches the pathologies that caused their collapse.
The traditional model — grand pledging conferences followed by sluggish bilateral transfers — is obsolete. Donor fatigue is acute, exacerbated by competing crises from Ukraine to the Sahel.
Governments are weaker, private capital is more cautious and geopolitical rivalries are more entrenched than when postwar reconstruction models were designed.
The institutional architecture for recovery no longer exists. The political conditions for multilateral cooperation are absent. And donor fiscal cycles — measured in bureaucratic quarters — bear no relation to the urgency on the ground.
Credible reconstruction demands three uncomfortable shifts.
First, debt realism before development. Syria and Yemen are burdened by unpayable obligations inherited from conflict. Without comprehensive restructuring — coordinated through regional development banks and the IMF — new financing will simply service old debt. This is fiscal realism, not charity. Insolvent states cannot absorb capital effectively.
Second, blended finance must move from theory to practice. Development institutions should de-risk private investment through first-loss guarantees and currency hedges, creating portfolios that combine concessional and commercial capital. This is not privatizing reconstruction; it is mobilizing money at scale while maintaining public accountability.
Third, Gulf sovereign wealth must anchor regional recovery. With more than US$4 trillion in assets, Gulf states have both the capital and the strategic interest in stability. The challenge is to build investment vehicles with credible oversight — independent boards, transparent procurement and community participation — to ensure funds do not disappear into patronage networks.
The hardest infrastructure to build is institutional. Reconstruction finance must embed governance reform from the outset: digital tracking of fund flows, competitive procurement and municipal capacity-building.
Technology offers new transparency — from blockchain-based monitoring to citizen-feedback platforms that give communities real-time visibility into progress. Local governance must be treated as seriously as ports or power grids. Municipal authorities should manage reconstruction projects, not simply execute donor blueprints.
Iraq’s failure stemmed partly from bypassing local institutions altogether, creating dependency on external contractors who vanished when the funding did.
The hand-off from emergency relief to long-term development remains reconstruction’s chronic failure. Humanitarian aid saves lives but breeds dependency; development projects promise sustainability but arrive years too late.
What is needed is a continuum of resilience — financing mechanisms that bridge immediate stabilization and long-term rebuilding. That means humanitarian cash transfers that stimulate local markets, infrastructure designed from the start to meet disaster-recovery standards and housing reconstruction that integrates renewable energy and climate resilience.
For Yemen’s coastal communities, that means flood-resistant housing and desalination plants. For Gaza, renewable energy systems and digital connectivity must be treated as core infrastructure, not afterthoughts.
No financial mechanism, however ingenious, can succeed without political inclusion and transitional justice to address the grievances that fueled conflict. This is where international coordination so often fails: reconstruction becomes another arena for geopolitical competition instead of a shared imperative.
Yet the alternative to imperfect engagement is not neutrality — it is abandonment. And abandonment guarantees that the next generation inherits not rebuilt societies but entrenched fragility.
The conversation about post-conflict finance must begin before conflicts fully end. Waiting for perfect political conditions forfeits the ability to shape what follows.
Early planning can create what economists call “peace conditionality” — the tangible prospect of reconstruction that makes continued conflict more costly.
What distinguishes this moment is the convergence of multiple crises — Gaza’s devastation, Syria’s paralysis, Yemen’s exhaustion — testing whether international institutions can act at the speed and scale required.
Reconstruction, done credibly, is not charity but investment in regional stability. It transforms fiscal instruments into social contracts and debt relief into political renewal.
The question is whether donors, Gulf capitals and multilaterals can design a recovery architecture transparent and accountable enough to earn the trust it demands. The rubble will remain for years. The decision to move beyond it must be made now.
Kurt Davis Jr is a nonresident senior fellow at the Atlantic Council.
