Are refugees a boon or bane? Benefit or burden? This pointed question was posed in a 2016 joint study of Kakuma Refugee Camp, in Turkana County, Kenya.
Since then, the question has become even more pressing as refugee numbers have risen annually for the past 13 years owing to new and protracted crises.
Getting refugees employed is not simple owing to a lack of recognition of skills and diplomas. Unlike economic migrants, who primarily move for income and opportunity, refugees flee war, violence and persecution. Most end up in low to middle-income states, often in areas with limited economic development or opportunity.
The rise in refugees and internally displaced peoplesImage: UNHCR/Statista
Providing support and protection to refugees is both a legal and moral obligation, as well as a global public good. Yet, governments often struggle with the challenge of balancing this global responsibility against domestic priorities.
Public opinion, frequently focused on safeguarding jobs and public services for their own citizens, can make it politically sensitive to include refugees as part of policy or programmes, especially during times of economic or social strain. Businesses may recognize some of the benefits of employing refugees but they also have bottom lines and shareholders to consider.
Why, then, should states and businesses expect more than just a warm glow from employing refugees?
1. Consumers like it
Recent surveys commissioned by the Tent Partnership for Refugees, a business alliance, suggest that people support companies that help refugees. For example, 40% of US respondents said they were more likely to buy from companies hiring refugees; in Europe (across seven major countries) the figure was 51% and rose to 74% in Mexico.
2. Businesses want it
The Malaysian Employers Federation, along with other business organizations and companies operating in Malaysia, recently urged the government to allow refugees and asylum-seekers registered with UNHCR to work legally. They estimated this could boost annual GDP by at least MYR3 billion ($676 million), and generate MYR50 million ($11.3 million) in tax revenue each year.
3. Host communities can gain from it
The 2016 World Bank/UNHCR study mentioned above looked at the impact of Kakuma Refugee Camp’s economy on the Turkana region in Kenya and found that gross regional product increased permanently by 3.4% as a result of the refugee presence, while overall employment rose by 2.9%.
The picture was not uniformly positive, of course; not everyone benefited equally, and some faced challenges. But the report concluded that “the refugee presence also increases consumption, self-reported incomes, and asset ownership of the host Turkana population”, showcasing a clear overall gain for the community.
More than 55% of refugees live in countries that restrict their right to work. However, when Colombia granted legal status, including employment permits, to around half a million undocumented Venezuelans in 2018, their income rose by 31% and their consumption by 60% with minimal impact on formal employment for Colombians.
5. Economic growth of refugees
A 2024 joint World Bank-UNHCR report indicates that displaced Venezuelans are likely to raise GDP growth among the largest refugee-receiving countries in Latin America and the Caribbean by an average of 0.10-0.25 percentage points annually between 2017 and 2030.
6. Double returns
A 2016 study by the economist Philippe Legrain, Refugees Work: A Humanitarian Investment that Yields Economic Dividends, suggests that refugees bring significant economic benefits to host countries. Citing IMF calculations, the study notes that additional spending by EU states on asylum seekers and refugees boosted EU GDP by 0.09% in 2016 and by 0.13% in 2017. Comparing increased debt to meet the costs of welcoming refugees against the boost to GDP between 2015-20, the study suggests that every one euro invested in refugees assistance yields nearly two euros in economic benefits within five years.
7. Let’s get digital
Legrain’s study also suggests that refugees work at virtually all levels of economic activity, from low-skilled or low-paid jobs to new businesses that create wealth (and sometimes employ locals) to high-skilled positions in tech and industry. Many refugees possess digital skills or quickly acquire them, enabling remote learning, online language teaching and coding classes. The potential for refugees to access livelihood opportunities online could shape the future of employment.
So how do we unlock refugee potential? What’s standing in the way and how do we break through?
Creating the legal and practical conditions for economic inclusion is critical to unlocking refugees’ potential. Once governments put this in place, addressing gaps in infrastructure becomes essential. Connectivity, transport, power and IT can be scarce in the world’s poorest nations, as is a skilled and educated workforce when access to education is limited. This is why UNHCR is encouraging alliances of states, businesses, NGOs, refugees, charities, financing institutions and others to come together to tackle these challenges by boosting economic inclusion, education, connectivity, climate resilience and financing, among other priorities.
Refugees bring skills, qualifications, determination and an entrepreneurial spirit. If we can look beyond the immediate challenges of a displacement crisis to the potential of refugees to contribute their abilities to businesses and markets, then the answer to the question of benefit or burden is clear.
Source: Weforum
