Lebanon, Syria, Gaza: the Middle East is home to some of the world's most complex reconstruction efforts, taking place in conflict and post-conflict settings and involving significant financing challenges. For Syria alone, the World Bank estimates reconstruction costs at 216 billion dollars.

However, the challenges are not solely financial or technical: these reconstruction processes unfold within complex political, economic and social environments, involving many stakeholders whose interests and approaches may sometimes diverge. To engage effectively in this complex geopolitical landscape, a thorough understanding of the operating environments is essential – not only for AFD Group, but also for other development actors.

Led by IFRI and coordinated by AFD, this observatory project analyses the state of destruction and the prospects for reconstruction across three territories: Gaza, Lebanon and Syria. Its aims to :

1. Understand the local dynamics (social, political and economic) of reconstruction : What are the actual needs? What is the state of the social fabric? Who are the key stakeholders and how do they interact?
2. Identify practical and feasible reconstruction pathways : What positions are the governments of these countries taking? What role can the private sector play, and how can public-private partnerships be structured? What role can civil society organisations and diasporas play?
3. Compare the positioning of external actors (European institutions and states, Israel, the United States, Gulf countries, Turkey, China, Iran and Russia) : What reconstruction plans are being proposed, and what is the level of their involvement? How do diplomacy, reconstruction and economic interests interact? Do these actors prioritise humanitarian assistance or reconstruction? What is France’s position?

To stay as close as possible to developments in this fast-moving context, a monitoring system will be established to map reconstruction projections and track decisions made by the various countries involved. IFRI will produce maps whenever relevant to support a better understanding of the broader challenges.

Three field missions will be carried out directly by IFRI researchers and/or researchers based in the region. The methodology will primarily rely on interviews, conducted either in person or remotely when travel is not possible. Syria is a particularly relevant case in this regard, as territorial disparities pose a major challenge for operators.

Operating in an interactive manner, the observatory will remain open to regular and on-request exchanges with French institutions that share an interest in these questions.

The project deliverables will include:

• Field mission reports with an oral presentation of findings;
• Publications on cross-cutting themes within IFRI’s publication series;
• A final report, covering all three reconstruction efforts and framed around a central research question, published in the collections of Éditions Agence française de développement;
• A final conference that may introduce comparative perspectives (Ukraine, Africa).

• Dorothée SCHMID, Program Manager for Turkey/the Middle East, IFRI
• Elodie RICHE, Research Officer, AFD

Ten years after the signing of the Paris Agreement, and five years into the Kunming-Montreal Agreement, he global economy is entering a period of profound structural change, often called “mid-transition”. Climate change, biodiversity loss, energy system transitions and shifting geopolitical dynamics are increasingly shaping economic development, financial stability and public finances. Climate shocks are already affecting fiscal balances and investment needs, while ecosystem degradation threatens key economic sectors such as agriculture, water and natural resources. At the same time, the transition toward low-carbon economies is transforming supply chains, trade relations and industrial strategies.

For Ministries of Finance, these dynamics are emerging as core macroeconomic risks while fostering new opportunities. Yet existing policy frameworks often struggle to integrate climate and nature fat-tailed risks (explication ou lien) into a systemic framework. Developing forward-looking economic scenarios that capture these interactions is therefore essential to support resilient fiscal planning and long-term development strategies.

It is in this context that AFD has launched the Climate and Nature Economic Policy Scenarios (CNEPS) initiative, a multilateral platform for the development of forward-looking economic scenarios to help policymakers anticipate these transformations and inform economic policy choices. It joins forces with an ecosystem of institutional, regional and academic partners to foster a shared language on plausible futures and related resilient economic policies.

The Climate and Nature Economic Policy Scenarios (CNEPS) initiative aims to develop forward-looking economic scenarios that help integrate climate change, biodiversity loss and transition dynamics into macroeconomic policy analysis. The project focuses on three main objectives:

• Technical integration: integrate climate and nature fat-tailed risks within macroeconomic policy frameworks, exploring nonlinear shocks, tipping points and geopolitical regime shifts, while building on existing structured country collaborations of AFD as well as regional and institutional partners.
• Policy interface: translate joint global scenarios into implications for fiscal policy, debt sustainability, industrial strategies and investment planning, while supporting champion countries in developing resilient national financing strategies.
• Coalition building: mobilise Ministries of Finance, Public Development Banks and academic partners, and connect existing finance-minister and public development banking platforms to scale impact and strengthen policy dialogue.

The approach brings together global analytical work and country-level collaboration to explore how climate and nature risks, transition dynamics and geopolitical shifts could affect national economies and public finances.

The initiative builds on partnerships between research institutions, development finance actors and Ministries of Finance in participating countries. Academic partners contribute modelling expertise and scenario design, while Ministries of Finance and Public Development Banks provide policy perspectives and help identify the most relevant economic questions and applications.

The project mobilises an international knowledge network and works with partner countries to ensure that the scenarios developed respond to concrete policy needs and strengthen local analytical capacity.

For this project, AFD is partnering with the University of Exeter.

The CNEPS initiative will deliver a first generation of forward-looking economic scenarios exploring how climate change, biodiversity loss and global transition dynamics could affect national economies and public finances.

Key outputs will include a first mid-transition analytical report presenting emerging global trends and systemic risks, as well as a first set of global scenarios developed with champion countries and regional partners. These scenarios will be translated into country-level assessments exploring implications for resilient fiscal policy, debt sustainability and investment strategies.

The project will also support participating countries in developing a first series of national CNEPS strategies aimed at informing resilient financing pathways and long-term economic planning.

Beyond analytical outputs, the initiative will contribute to policy dialogue and capacity strengthening through workshops, regional exchanges and engagement with international platforms bringing together Ministries of Finance and Public Development Banks.

• Etienne Espagne, Senior Economist, AFD
• Jean-François Mercure, Professor of Climate Policy, Exeter University
• Sam Mugume Koojo, Deputy Co-Chair CFMCA, Country Platform Hub, PAFCA
• Laura Sabogal Reyes, FiCS