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IMF Survey : Conflicts and the Refugee Crisis: An International Call for Action

April 15, 2016

  • More than 23 million people in the Middle East are displaced due to conflict
  • Massive scale, pace of the current refugee crisis require a collective international response and stepped up financial support
  • Host countries need to scale-up labor market reforms to better integrate refugees

Efforts to deal with the current and unprecedented refugee crisis require a “bigger, bolder, and broader” approach the IMF’s Christine Lagarde told a seminar at the IMF-World Bank Spring Meetings.

Panelists pose for photo after an important debate on the plight of refugees (photo: IMF)

Panelists pose for photo after an important debate on the plight of refugees (photo: IMF)

2016 IMF-World Bank Spring Meetings

This is “a humanitarian crisis of huge scale” requiring “collective and massive action,” Lagarde said. The financing volumes and levels of government support need to be “bigger than what people think of at the moment,” she added.

The seminar Conflicts and the Refugee Crisis: an International Call for Action brought together senior national policymakers, members from international organizations, and other stakeholders to identify key policy responses to build awareness of the need for scaled-up and robust international cooperation. The panelists also discussed the impact of the crisis on source, transit, and host countries.

Many of the refugees stem from the current Syrian conflict which alone has produced nearly five million refugees—the majority of which fled to Turkey, Lebanon, and Jordan. Europe has also experienced an unprecedented surge of asylum seekers, with about 1.2 million entering the European Union in 2015.

Lagarde stressed that “all the international institutions have to be a part of the equation” and need to develop policies on how to best integrate the influx of refugees into labor markets fairly. For countries that are able to integrate refugees into the workforce, the influx can boost growth potential, Lagarde said, citing IMF research that showed that long-term growth could increase by 0.2 percent on average in the European Union. “In a region where average growth is about 1.5 percent, 0.2 percent is worth looking at,” she added. The current crisis is “not something that matters only to Lebanon, Jordan or Germany,” but it matters to everyone. “Security and hosting refugees is a public good,” Lagarde emphasized.

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Panelists discuss the economic and political challenges of hosting refugees (photo: IMF)

A Humanitarian Crisis

Kyung-wha Kang, a United Nations Assistant Secretary-General agreed with Lagarde that the response has to be more of a collective endeavor. “Over 42,000 people every day get displaced because of conflict, violence or persecution,” she said.

The Assistant Secretary-General reminded the audience that other countries are also dealing with conflicts, such as Iraq and Afghanistan. She went on to say that before the Syrian crisis, “we always talked about the Democratic Republic of the Congo as the largest conflict-related displacement situation,” but now due to the scale of this current refugee crisis, the “DRC has dropped off the radar even though conflicts and displacements continue.” Kang added that the speed of migration hitting the shores of Europe and neighboring Arab countries is one of the biggest challenges policymakers are facing.

Kristalina Georgieva, Vice President of the European Commission, talked about Europe’s experience, which is in the process of adopting a four-pillar approach aimed at building “a much stronger Europe to cope with these shocks” of migration flows. The plan, which is still under talks, consists of harmonizing asylum policies, particularly in terms of social benefits and access to labor markets; securing external borders; combating human trafficking; and tackling the root causes of displacement.

Integrating Refugees

Jordan has historically supported refugee inflows across their borders for decades and has borne the majority of refugees from Syria’s civil war. Jordan’s Minister of Planning and International Cooperation, Imad Fakhoury, cited Jordanian citizens as being “truly heroes” because of their constant “hospitable approach welcoming their Arab brothers and sisters into our borders over many decades.”

Fakhoury mentioned that Jordan has adopted a holistic approach of integrating the refugees into the labor market. The country recently opened up certain sectors of the economy to allow Syrians to find work. “We have found a way to expand the economic pie of Jordan but not displace Jordanians from their own jobs,” he said.

Nevertheless, with a high debt-to-GDP ratio at around 90 percent, the 1.3 million Syrians displaced in Jordan is taking a heavy toll on the country’s finances, said Fakhoury, who is seeking financial support from the international community to sustain its economy and infrastructure. Fakhoury emphasized that countries like Jordan “should be recognized for their efforts and sacrifices,” but “should not be left to shoulder the burden alone.”

Ian Bremmer, President of Eurasia Group, agreed with the Minister’s call for collective action but argued that there should be less focus on great powers and more “focus on what can be done to help support the local and regional powers who are clearly going to be forced to bear 99 percent of this burden.”

Lagarde agreed that the IMF is working on making better policy recommendations that give countries affected by the refugee crisis “credit for making changes that are macro-critical.” Responding to a question from an audience member about the IMF’s role on women and girls in refugee situations, she said “it’s not mainstream business to focus on [these types of] issues,” but the membership understands that many of these issues have macroeconomic dimensions. “I will continue to raise my voice wherever I can,” she concluded.

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IMF Managing Director Christine Lagarde asking the panel to recognize Jordan’s consistent efforts throughout the crisis (photo: IMF)