Throughout history, each refugee crisis has played out according to its specific context. The current one, driven mostly by fighting in Syria, Afghanistan and Somalia, is one of the most intractable. A full 80 percent of refugees over the past decade come from areas with conflicts that have no end in sight. At the end of 2014, more than half of refugees had been in exile for over 10 years.
And the locus of the crisis is different this time, too. More refugees now live in urban areas than in the vast camps that symbolized past crises. Cities in Jordan, Lebanon and Turkey are swollen with refugees from Syria, and the flood of asylum seekers to Europe has been one of the world's biggest stories.
What hasn't changed is that refugees are still seen at best as a burden, but sometimes as a scourge. They devour tax money, strain public services, and, prejudices aside, are often truly difficult to integrate into the societies of host countries.
But in academic circles, think tanks, and development and humanitarian agencies, there is a rising chorus of advocacy and research that exhorts us to believe in our self-interested hearts that refugee crises are actually moments of economic opportunity for host nations. Refugees, they say, aren't burdens — they are investments.
In a rare in-depth study of the long-term effects of refugees on host nations' GDPs, researchers found that "investing one euro in refugee assistance can yield nearly two euros in economic benefits within five years." The study was done by a new think tank, the Open Political Economy Network, and the Tent Foundation, which was founded by Hamdi Ulukaya, a Kurdish immigrant to the United States who also founded and runs the immensely successful yogurt brand Chobani.
The study argues that refugees can create returns by increasing demand for services and products, filling gaps in the workforce, and eventually paying taxes and creating new jobs themselves. Meanwhile, taxes on their wages will help fund pensions and public coffers. In a chart from the study, shown below, even in a "pessimistic scenario," there would be a net benefit to Germany's GDP about 10 years after an initial investment in refugees, and 15 years later, those investments might pay off in terms of actual wages for Germans. Germany currently spends an extra 0.5 percent annually on new refugee arrivals.
Across the board — not just in Germany — the investment would increase public debt by almost 69 billion euros ($78 billion) between 2015 and 2020 but would lead to 126.6 billion euros ($142 billion) in GDP growth over that period.
That the rosy picture is painted by Ulukaya's foundation isn't surprising. He is an exceptional example of what immigrants can bring to their host countries, and, like immigrants in normal times, many refugees and asylum seekers are extremely well educated and ready to work. Even if they aren't, many are willing to work jobs that Europeans, for instance, might find undesirable. In think-tank lingo, the study says that refugees can bring deftness, dynamism, diversity and demographic dividends, often by starting off doing dirty, difficult, dangerous and/or dull duties. Now say that 10 times fast.
If nothing else, the influx of people presents huge economic potential, especially for aging Western countries whose prosperity is predicated on continued growth. The picture is less rosy, but still promising, in countries such as Lebanon, which has taken in more than a million Syrians.
A study by the Office of the United Nations High Commissioner for Refugees on the effect of humanitarian aid on the Lebanese economy found mixed results. In terms of a "fiscal multiplier," the study found, echoing the Tent Foundation's research, that every dollar spent on humanitarian assistance returned $1.60 in GDP. "In other words," the study says, "when the four UN agencies disburse USD 800 million of humanitarian assistance, it is as if they were actually injecting USD 1.28 billion in the Lebanese economy."
But here's a major caveat. While it doesn't refute the argument that investing in refugees is a smart economic move, it shows how countries that are geographically and culturally close to the conflicts producing the refugees may see spillover economic effects that negate the benefits of their arrival. "While it helped mitigate the effects of the Syria crisis, the humanitarian package did not completely offset those effects," the study noted. "In fact, a simulation of the combined effect of a 23% decrease in tourism volume, a 7.5% decrease in exports, and the injection of the same aid package (USD 800 million) results in negative GDP growth of -0.3% instead of the initially obtained positive growth of 1.3%."
Integrating refugees into an economy puts a huge onus on governments to create pathways for that to happen. It requires immense coordination and funding, not to mention a public relations offensive. In countries such as Kenya, where the population outside of refugee camps is actually poorer than that inside in some cases, that battle is even more difficult. In that sense, it is no wonder that Kenya announced plans this month to close its refugee camps, threatening to displace more than 600,000 people, many of whom were born in the camps. Dadaab camp, mostly home to Somalis, is the largest in the world.
At a panel discussion in Washington on Tuesday, World Bank President Jim Yong Kim related his experience in promoting refugee employment in Kenya. "If you talk to President Kenyatta, he'll say that Kenyans in that region are suffering terribly. 'If we say that everyone can work, my own people will rise up in revolt,'" said Kim, paraphrasing the Kenyan president.
Kim was joined on the panel by David Miliband, a British former politician who leads the International Rescue Committee. Miliband laid out his thoughts on how nations such as Kenya might be able to reap the same economic benefits of hosting refugees as Europe.
"The only way to create some dignity for the refugees and some hope for the local communities is a win-win." he said. "And the only way to do that is to bring resources in from the outside. And that resource can’t just be quote-unquote 'more aid,' it has to be a different kind of financing."
By different financing, Miliband meant that humanitarian agencies like his and massive financing institutions like Kim's had to come together and find ways to simultaneously offer economic development and employment to refugees and the communities that bear the burden of hosting them. Given that the vast majority of refugees are not on their way to Europe, this is the approach that would have far greater bearing on the lives of most refugees.
But, again, context means just as much as coordination and implementation. When it comes to employment, there are the tricky issues of legal status and citizenship, not to mention the simple need for there to be jobs available for refugees, or anyone for that matter. And that doesn't even touch the security concerns that most governments and their constituents have about refugees, let alone the political risk for any elected official in making long-term investments in people who may be seen as foreigners and leeches.
This weekend, leaders in the development and humanitarian world are meeting in Istanbul at the World Humanitarian Summit to discuss a coordinated response to the refugee crisis. On the prospects of any major breakthrough, Kim said, "I think it really is important to come out of the WHS not, sort of, all singing kumbaya and saying we've solved our problem. I think it will be a realization that the problem is much deeper and more complicated than we appreciate."