World Bank, partners advocate refugee employment to reduce humanitarian aid costs

Experts from the World Bank and its partners have made the case for refugees to be allowed to work in order to cut the cost of humanitarian assistance.

They were speaking June 18 during a crucial webinar that addressed the sustainability of hosting refugees.

The discussion centered on reducing the costs of humanitarian assistance while simultaneously fostering economic development for both refugees and host communities.

“We live in a world where the number of refugees has been constantly increasing. Over the last ten years, it has essentially tripled. At the same time, external assistance has been flat. That means less money per refugee, “said Xavier Devictor, Adviseron Fragility, Conflict, and Violence Group, a t the World Bank Group.

He said a number of models developed over the year to deal with the needs of refugees are no longer sustainable, and therefore there is a need for a new approach.

Karishma Silva, an economist from the World Bank’s Education Global Practice, highlighted the core principle of the new approach: self-reliance, because meeting refugees’ basic needs, often measured against the poverty line, imposes a significant financial burden on host countries.

“Host communities can reduce the cost of hosting by letting refugees work,”Karishma said.

“Self-reliance is at the center of this new approach,” she said.

She said empowering refugees economically benefits not only them but also the local communities hosting them, and insisted that the new approach is critical to meeting the basic needs of refugees, often measured against the poverty line.

The poverty line is the minimum standard against which to measure how well refugees are doing. It is the threshold below which an individual cannot meet the minimum basic needs.

“A refugee is considered self-reliant if they are not poor but it matters where the income comes from,” Karishma said.

She explained that a refugee is self-reliant and therefore gets above the poverty line if the income comes from their own earnings.

“Conversely, refugees are not self-reliant if they are poor, or if they rely on humanitarian assistance to achieve their non-poor status.”

Experts presented data from studies conducted in eight countries which further highlighted just why it is critical the refugees work.

The data shows that across low income countries (Chad, Ethiopia, Niger and Uganda) and low-middle income countries (Kenya), only about 20% of refugees are self-reliant. Conversely, in middle-income countries like Columbia, Costa Rica and the West Bank and Gaza, at least 50% of refugees are self-reliant.

“The data further shows that across the board, refugees are less likely to be self-reliant than their hosts, but this gap is dramatically reduced in countries where refugees are allowed to work without any significant restrictions.”

For instance, only 18% of refugees in Chad and just 14% in Uganda are self-reliant. By contrast, 73% of refugees in Costa Rica and 62% in the West Bank and Gaza are self-reliant.

Experts explained that the amount of humanitarian aid drops in situations where refugees are allowed to work. Where they don’t work, the amount required as aid equals the cost of basic needs.

Karishma explained that currently, meeting the basic needs of refugees is estimated at $62billion, but because refugees do work in some countries, they currently cover 2/3 of the cost,ie,$40 billion..

“That means that refugees rely more on their earnings than they do on assistance, but there is a lot of potential to reduce this cost,” she said.

She argued that if refugees had the same working rights as their host communities, the income that they would earn will cover 90% of the needs, and the amount of aid would fall from $22 billion to $6 billion.

The case for letting refugees work was made even more poignant through some country-specific presentations.

Olive Nsababera,an Economist from the World Bank’s Poverty and Equity Global Practice said Uganda, a country that hosts more than 700,000 refugees has also carried out significant reform to foster the economic inclusion of refugees. She spoke about the 2021 Refugee Act that gives refugees the right to work, the right to open bank accounts, and register for a mobile sim card.

But refugees, she said “still face numerous obstacles in terms of obtaining work permits and business licenses.”

Speaking to the idea of self-reliance, she noted that refugees in urban areas are four times more likely to work than those in rural areas and therefore more likely to be self-reliant.

She said less than 20% of refugees who live in camps are self-reliant. In urban areas, the figure rises to 70%.

“This contrast is because refugee camps are found in some of the poorest counties where market opportunities are very restricted,” she said.

She said this disparity can be closed by investing in areas where the camps are. She said instead of concentrating on aid, the international community should take investments like energy,water,waste management,hospitality,information technology,irrigation,markets etc…in counties where the camps are.

Aziz Atamanov, a senior economist of the World Bank’s Poverty and Equity Global Practice presented the case of Uganda-a country that hosts the largest refugee numbers in Africa. He noted that refugees in Uganda love predominantly in settlements, and do enjoy freedom of movement, have a right to work and above all have access to land.

He noted however that only 30% of refugees in Uganda who have “adequate farm size,” defined as a farmland more than O.O5 hectares are self-reliant, and 45% don’t have land at all. He suggested as the refugee numbers continue to rise, land sizes will continue to sink and therefore there is need for non-farm revenue sources.

In the Central African Sub region that hosts over 3.2 million refugees, refugees have a right to be gainfully employed and the right to access services, according to Abdouraouf Gnon-Konde , UNHCR Regional Director for West and Central Africa.

And like in Uganda and Kenya,” the refugees live in communities that are poor, the host communities are struggling.”

“So it’s clear to us that long term displacement requires development-oriented solutions to integrate refugees into local communities, reducing dependence on humanitarian aid and fostering self-reliance,” he said.

“Empowering refugees to be self-reliant can lead to significant economic benefits for host countries,” he said.

He said the UNHCR was shifting its approach to “include development considerations alongside humanitarian interventions,” explaining that this is crucial for effectively addressing complex realities of forced displacement.

“The integration of socio-economic inclusion, strategic partnerships, supportive regulatory frameworks and development funding into our response strategy will definitely ensure that refugee’s and host communities achieve long term stability and self-reliance,” Abdouraouf Gnon-Konde said.

Ngala Killian