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16th Apr 2024

Refugees will give EU economy huge boost, says NGO

  • With the right investment, refugees can boost economies and help offset a declining population in the EU (Photo: ifrc.org)

Refugees in Europe are likely to double the money initially invested in them over a five-year period, an NGO has claimed.

Investing in refugees will create jobs, increase trade, spur economic growth, and produce other benefits, suggests a 77-page report out on Wednesday (18 May) by the Tent Foundation, an NGO that helps people who have been forcibly displaced.

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Drafted by the EU commission's former economic adviser Philippe Legrain, the report draws its conclusions, in part, from calculations by the International Monetary Fund (IMF).

The IMF notes that additional spending in the EU on refugees of 0.009 percent of GDP in 2015 and 0.11 percent in 2016 will raise its GDP by 0.13 percent in 2017.

The report also concludes that an increase in net government debt of €68.8 billion by 2020 to fund investment in refugees would yield a total increase in GDP between 2015 and 2020 of €126.6 billion.

More than one million refugees and asylum seekers arrived in the EU last year, most of whom headed to Germany and Sweden.

But the EU is now turning back migrants from Greece to Turkey as part of a policy to manage a crisis that has cost the lives of thousands since 2014.

More than 1,360 people have either died or gone missing so far this year in their efforts to reach the EU.

Legrain, who is also a senior visiting fellow at the London School of Economics, says refugees should be seen as an opportunity.

"Refugees are often seen as a burden to be shared or shirked, when in fact they are an opportunity to be welcomed," he said in a statement.

"With a suitable upfront investment and wise policies, hard-working refugees of all skill levels have a lot to contribute to the economy, individual businesses and the public sector."

Giving them greater access to the labour market means they will produce more tax revenue and act as a fiscal stimulus in economies where demand is depressed, notes the report.

US vs Sweden

The report also draws comparisons between refugees of the same nationality in the United States and those found in the EU.

It notes, for instance, that while a Somali refugee in Sweden is often on welfare and unemployed, the same national in the US is more likely to be a small-business owner or employed.

"This suggests that Somalis’ lack of success in Sweden is due not to their cultural characteristics but to the fact they start off as outsiders in a labour market whose institutions privilege insiders," the report says.

The report notes that the US system provides refugees with greater opportunities to become self-reliant.

It means their reliance on social assistance declines more rapidly over time when compared with their EU-based counterparts.

Working refugees also provide value for their families back home. By sending money back, they help boost local development. Remittances in Liberia amount to some 18.5 percent of its GDP.

It also highlights the success of Sergey Brin, a child refugee who left the Soviet Union for the US, and then later co-founded Google.

Human smuggling to EU worth €5bn a year

Up to 40,000 suspects involved in "multinational business", Europol and Interpol said. Migrants "increasingly" targeted for labour and sexual exploitation.

Sweden must put refugee women into work, OECD says

The Organisation for Economic Co-operation and Development says Sweden is a model for integration of refugees, but says more should be done to address housing shortages and support those with low labour skills as well as unaccompanied minors.

EU 'ready' to support Cyprus on Lebanon migration

The EU is ready to offer extra support to Cyprus as the Mediterranean island faces a sharp increase in refugees arriving from Lebanon, a spokesperson for the EU executive told reporters on Thursday (4 April).

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