Refugee boat

Investing one euro in welcoming refugees can yield nearly two euros in economic benefits within five years, a new report out today has found.

It is the first comprehensive, international study of how refugees can contribute to advanced economies, and focuses on what returns a country can get by investing in refugees.

The report states:
The world is facing its biggest refugee crisis since the Second World War, with more than 22 million people forcibly displaced from their countries by war and persecution. Advanced economies such as those of the EU, the United States (US), Australia, Canada and Japan are often reluctant to admit them, partly for cultural reasons but also for economic ones. Yet welcoming refugees is not only a humanitarian and legal obligation; it is an investment that can yield significant economic dividends.

Among the examples it gives, it shows how a million Vietnamese refugees that fled their country in the late 1970s and early 1980s were seen as a burden and often turned away.

But after being eventually allowed to settle in the US and other countries, they have a higher employment rate and greater average incomes than local born citizens, and have played a key role in promoting trade and investment with Vietnam.

It lays out specific economic benefits that refugees can provide

1. Demographic: Ageing societies with a shrinking native working-age population, such as Germany’s, benefit from the arrival of younger refugees whose skills complement
those of older, more experienced workers.

2. Tackling debt: Studies by the OECD group show that migrants in general tend to be net contributors to public finances; in Australia refugees become so after 12 years. Better still, the taxes that refugees pay can help service and repay the huge public debts that have been incurred in many countries to provide benefits for the existing populations, the study states.

3. Development aid: Refugees provide a development dividend – to themselves, their children and their country of origin. Remittances to Liberia, a big refugee-sending country, amount to 18.5% of its GDP. The same applies other countries in Africa and Asia.

But how a country responds to refugees makes a big difference, its points out.

At one extreme, the US gives refugees a burst of initial help, after which they are expected to fend for themselves. At the other extreme, Sweden has traditionally provided refugees with generous
social support, but made it hard for them to work. While Sweden now focuses much more on getting refugees into work, barriers to employment remain high.

This is why, for instance, only 25% of Somali refugees aged 25–64 in Sweden were employed in 2010, but 57% of those in the US were.

Read the rull report here. It was authored by Philippe Legrain, founder of Open Political Economy Network (OPEN) and a Senior Visiting Fellow at the LSE’s European Institute.

In recent weeks, Labour MPs such as Yvette Cooper have become outspoken in calling on the government to let in more child refugees from Europe.

We hope other politicians are reading too.

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