How refugees in the Mid­dle East can con­trib­ute to the econ­omy

The National - News - - BUSINESS - NASSER SAIDI Nasser Saidi is the for­mer chief economist of DIFC and has served as Le­banon’s econ­omy min­is­ter

The frac­tured geopo­lit­i­cal land­scape of the Mid­dle East and North Africa re­gion has wit­nessed ma­jor con­flicts and vi­o­lence over the past decades.

Dur­ing the 1946 to 2015 pe­riod, 12 out of 59 con­flict episodes in the Mena re­gion lasted more than eight years, and in about half of these episodes the en­su­ing peace lasted less than 10 years, ac­cord­ing to a 2016 In­ter­na­tional Mone­tary Fund pa­per.

It has been a trau­matic seven years and count­ing since the Syr­ian civil war be­gan: over 5.6 mil­lion peo­ple have fled Syria since 2011, with a fur­ther 6.6 mil­lion in­ter­nally dis­placed, ac­cord­ing to UN­HCR num­bers. In Ye­men, some 8 mil­lion peo­ple are on the brink of famine, not to men­tion fac­ing the worst recorded cholera epi­demic in his­tory. As Ra­madan ends, it be­hoves us to in­tro­spect, reflect on and com­mis­er­ate with the suf­fer­ing of refugees and the dis­placed, un­der­stand the eco­nomic and so­cial im­pli­ca­tions of on­go­ing con­flicts for the coun­tries in tur­moil and their neigh­bours, and find ways to sup­port their sta­bil­i­sa­tion and re­cov­ery. The es­ca­la­tion of con­flicts since 2011 has re­sulted in a height­ened in­ci­dence of ter­ror­ism, in ad­di­tion to the hu­man­i­tar­ian costs, deaths, dis­place­ment of pop­u­la­tions, de­struc­tion of cap­i­tal and dra­matic re­duc­tion of gross do­mes­tic prod­uct.

The World Bank es­ti­mates that dis­rup­tions to eco­nomic or­gan­i­sa­tion were about 20 times costlier than cap­i­tal de­struc­tion in the first six years of the Syr­ian con­flict – think of the break­down of law and order, re­duced con­nec­tiv­ity, higher trans­porta­tion costs and dis­rup­tions in sup­ply chains and net­works.

It will take years, if not decades, for the war-torn na­tions of Iraq, Syria, Ye­men, Libya, Su­dan and oth­ers to re­turn to their pre-cri­sis state.

Syr­ian refugees are scat­tered across the globe, but the ma­jor­ity seek safety in neigh­bour­ing coun­tries, namely Turkey (3.6 mil­lion), Le­banon (986,000), Jor­dan (666,000), Iraq (250,000) and Egypt (129,000). In ad­di­tion to the recorded refugees, there are count­less mil­lions in­ter­nally and ex­ter­nally dis­placed.

Spillovers from the con­flicts ex­tend to the neigh­bour­ing na­tions that ac­cept the refugees – de­cline in out­put, strain on phys­i­cal in­fras­truc­ture, pres­sure on gov­ern­ment bud­gets, spikes in in­fla­tion, higher cur­rent ac­count deficits, in ad­di­tion to in­creased poverty and so­cial, eco­nomic and po­lit­i­cal ten­sions from a large in­flux of refugees and the dis­placed. Refugees and the dis­placed put a strain on lim­ited do­mes­tic re­sources, in­clud­ing health, ed­u­ca­tion, wa­ter, elec­tric­ity and trans­port sys­tems – not to men­tion the in­abil­ity to ad­e­quately po­lice the refugee camps or in­te­grate the refugees liv­ing out­side the camps in ur­ban ar­eas. The cri­sis is un­sus­tain­able and needs to be ad­dressed. What can be done to sup­port the refugees?

First and fore­most, hu­man­i­tar­ian aid or fi­nan­cial sup­port. For ex­am­ple, the UN has re­ceived less than one third of the fund­ing it needs to sup­port Syria’s 5.6 mil­lion refugees, let alone the dis­placed. The sup­port should be di­rected to­wards food se­cu­rity, core health needs and lift­ing those liv­ing way be­low the ex­treme poverty line. The an­nual Vul­ner­a­bil­ity Assess­ment of Syr­ian Refugees in Le­banon re­veals that 58 per cent of house­holds live in ex­treme poverty – on less than $2.87 (Dh10.54) per per­son per day – and that food in­se­cu­rity af­fects around 91 per cent of house­holds to some de­gree. Sec­ondly, use mod­ern tech­nolo­gies as an in­te­gral com­po­nent of sup­port to refugees and the dis­placed. A ma­jor is­sue fac­ing refugees is the loss of iden­tity (in­clud­ing loss of iden­ti­fi­ca­tion pa­pers) and com­mu­nity when they are dis­placed. Refugees can eas­ily spend a third of their mea­gre dis­pos­able in­come on stay­ing con­nected – be it for con­nect­ing with their fam­ily and friends to con­tact­ing peo­ple smug­glers.

We should de­velop and im­ple­ment an “e-refugee” con­cept. The United Na­tions should pro­vide a se­cure elec­tronic iden­tity to refugees and the dis­placed us­ing blockchain tech­nol­ogy. The e-refugee iden­tity would per­mit the de­liv­ery of aid us­ing bio­met­ric data (iris scans, fin­ger­prints) to avoid po­ten­tial fraud­sters, grant ac­cess to the fi­nan­cial sys­tem al­low­ing fi­nan­cial in­clu­sion, al­low refugees to earn in­come by pro­vid­ing dig­i­tal ser­vices (e-com­merce, e-ser­vices), as well as en­able con­nec­tiv­ity with fam­ily, friends and com­mu­nity.

Ac­cess to the in­ter­net and ded­i­cated refugee net­works would also sup­port ed­u­ca­tion through dig­i­tal class­rooms,

The al­ter­na­tive is that a whole gen­er­a­tion is un­em­ployed and can­not build their hu­man cap­i­tal

as well as ac­cess to health and med­i­cal care on­line.

The e-refugee iden­tity would be par­tic­u­larly help­ful for women who face dis­crim­i­na­tion by en­abling them to pro­vide ser­vices and gain an in­de­pen­dent source of in­come. The e-refugee iden­tity would also en­able greater mo­bil­ity for refugees who are typ­i­cally se­verely re­stricted in their abil­ity to move.

Thirdly, refugees and the dis­placed should be for­mally in­te­grated into lo­cal labour forces. This would al­low them to earn in­come, be­come pro­duc­tive and pay taxes, re­duc­ing the bur­den on host coun­tries, lo­cal com­mu­ni­ties as well as aid agen­cies and or­gan­i­sa­tions.

The al­ter­na­tive is that a whole gen­er­a­tion is un­em­ployed, can­not build their hu­man cap­i­tal and will suf­fer a life­time of de­pri­va­tion and poverty. Ex­trem­ism, vi­o­lence and Daeshism are likely to res­onate with the un­em­ployed, marginalised, dis­en­fran­chised youth, par­tic­u­larly young men. Al­low­ing refugees and the dis­placed to work would also al­low them to build the skills and knowl­edge they would need to sup­port the re­con­struc­tion of their own coun­tries post con­flict. Jor­dan pro­vides a good ex­am­ple: in Fe­bru­ary 2016, the gov­ern­ment an­nounced that it would pro­vide 200,000 jobs over five years for Syr­ian refugees. Jor­dan’s Labour Min­istry has is­sued over 87,000 work per­mits for Syr­ian refugees since 2016 (as of Fe­bru­ary 2018).

Fourthly, re­build­ing and re­de­vel­op­ing the coun­tries de­stroyed by war and vi­o­lence (Iraq, Syria, Ye­men, Libya, and Su­dan) pro­vide an in­vest­ment op­por­tu­nity in ex­cess of $1.3 tril­lion and ris­ing.

The in­ter­na­tional com­mu­nity and coun­tries of the re­gion should rally to­gether for the re­con­struc­tion of the war-torn coun­tries – this would be a growth-lift­ing, job-cre­at­ing strat­egy for the re­gion and in­ter­na­tion­ally. In­te­grat­ing their re­built in­fras­truc­ture into neigh­bour­ing coun­tries would re­duce costs, in­crease ef­fi­ciency and re­sult in economies of scale. The build­ing blocks for this co-op­er­a­tive ef­fort would be a re­gional se­cu­rity agree­ment and the set­ting up of an Arab Bank for Re­con­struc­tion and De­vel­op­ment funded and led by the GCC, with par­tic­i­pa­tion by the Euro­pean Union, China, Ja­pan, the US, the Asian In­fras­truc­ture In­vest­ment Bank and in­ter­na­tional fi­nan­cial in­sti­tu­tions.


More than 5.6 mil­lion peo­ple have fled Syria since 2011, with a fur­ther 6.6 mil­lion in­ter­nally dis­placed

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