The social and economic benefits of refugee arrivals

Uganda’s northern district of Adjumani borders South Sudan and is home to around 244,000 refugees. If you visit, you may be surprised not to find the tell-tale signs of refugee quarters — fences, camps, and other kinds of demarcations. Instead, refugees live alongside locals, enjoying basic liberties like the right to work, freedom of movement, and access to critical basic services.  

This integrative approach toward refugee hosting has been a cornerstone of Uganda’s domestic policy since the 1960s. A new policy research working paper on Inclusive Refugee-Hosting in Uganda Improves Local Development and Prevents Public Backlash by Yang-Yang Zhou, Guy Grossman and Shuning Ge, part of a broader new series of research on Forced Displacement, further reiterates that the presence of refugees has significantly improved access to social services, such as education and healthcare, for host communities in Uganda , shattering popular stereotypes of refugees as a source of tension, protests, or economic drain for a country. Uganda’s approach to hosting 1.6 million refugees—the largest refugee settlement in Africa and the fourth largest in the world—has also helped quell insecurities or negative sentiments towards migrant presence in the nation, mitigating the likelihood of backlash against them.  

Almost 12,000 miles away on a different continent, Peru is seeing similar gains with the large arrival of Venezuelans, according to a new policy research working paper on  Immigration, Labor Markets and Discrimination: Evidence from the Venezuelan Exodus in Peru by Andre Groeger, Gianmarco León-Ciliotta, and Steven Eric Stillman. The presence of more than a million Venezuelans has helped Peru improve local labor market conditions, reduce crime rates, increase levels of trust between neighbors, and improve satisfaction with public services. These improved economic conditions have helped to decreased anti-immigrant discrimination.  

These findings align with new analysis of nearly 100 refugee camps across Africa. In the policy research working paper titled The Geography of Displacement, Refugees’ Camps and Social Conflicts, authors Nicola Daniele Coniglio, Vitorocco Peragine, and Davide Vurchio show that, while the initial shock of refugee arrivals can at first increase social tension, refugee arrivals contribute to improved economic conditions in the medium and long term in host communities with no negative impacts on social cohesion.  

Forced Displacement Today 

UNHCR estimates that 84 million people were forcibly displaced by the middle of 2021, including over 20 million refugees and a growing number of internally displaced people (IDPs). In just ten years, the share of the world’s population that has been forcibly displaced due to conflict, violence, and persecution, as well as political, economic, and environmental crises, has grown from 1 in 159 to 1 in 95.  

Despite the magnitude of displacement around the world, including the 3.7 million people recently displaced from Ukraine, there is a remarkable lack of research on the topic to inform policies and development investments. To fill this gap, the World Bank together with UNHCR and the UK Foreign, Commonwealth and Development Office (FCDO) commissioned a series of studies to understand how to prevent conflict and promote cohesion among communities experiencing displacement. A finding that’s consistent across the board in the studies highlighted above on Uganda and Peru is, yes, forced displacement is a global crisis that poses significant developmental challenges. Yet, if managed effectively with inclusive policies and development investments, forced displacement can bring about social and economic prosperity . These programs and policies can assume many forms, including multi-sectoral development investments in services and infrastructure; social assistance (i.e., cash transfers, vouchers, workfare programs, grants to communities); educational scholarships; skills training programs; mental health support; and public messaging to evoke empathy towards refugees and preempt xenophobia. 

Working Toward Collective Social and Economic Prosperity   

Understanding and carefully studying the conditions under which host communities are successful at integrating people who have been forced to flee their home is critical for the international community . Here are some lessons emerging from this new series of studies:  

• Large arrivals of refugees do not necessarily have a negative effect on the attitudes of host communities or on economic outcomes of a region or country.  

• In Peru, the inflow of Venezuelans who have a right to work is associated with positive labor market effects and more positive attitudes towards refugees.  

• Humanitarian assistance and development investments should be directed both to refugees and host communities to mitigate negative effects of displacement.  Investments in infrastructure and services are key to meeting the increased demand of the population shocks generated by the arrival of displaced people and to avoid tensions over limited resources.  In Uganda, areas exposed to more refugees experienced better access to public and private schools, health centers, and roads as a result of resources allocated from aid, reducing tensions between refugees and host communities. 

• Investments paired with high-quality facilitation can help ensure that benefits reach refugees and host communities and promote social cohesion.  Facilitated refugee–host interactions can improve host communities’ perceptions of refugees and internally displaced persons. Community Driven Development approaches that bring refugees and host residents together for joint planning, decision making, and oversight of investments in essential infrastructure and services can foster positive interactions. 

It’s said that the best way to predict the future is to invent it. Countries have much to gain economically and socially from thinking magnanimously and innovatively about how to integrate displaced people into mainstream society. The positive effects may take time to emerge but can be well worth the wait and enable all citizens to thrive in dignity and prosperity.