World Bank may compensate Syria’s neighbors for refugee costs

The World Bank plans to talk to its member countries about compensating Syria’s neighbors for the substantial fiscal cost of hosting refugees for long periods, a World Bank official said in Geneva on Thursday.

“It’s actually quite significant for countries like Jordan, for Lebanon and for Turkey, and some estimates put that at about 1.1-1.4 percent of GDP,” Colin Bruce, senior adviser to the World Bank president, told a conference.

“We recognize that for many of these countries there’s a cost associated with hosting with refugees and they need to be compensated,” he said.

“We are quite prepared to enter into that dialogue with our shareholders as to how we support the compensation of countries, and in particular the middle-income countries that do not have access to concessional resources, and that's the conversation that is taking place.”

Humanitarian officials have previously said that the World Bank’s rules forbid it from making grants to middle-income countries such as Lebanon, but that governments are unwilling to borrow from the bank to cover the costs of refugees, leaving a huge funding gap for countries hosting 4 million Syrians.

Bruce was speaking at a preparatory meeting for the 2016 World Humanitarian Summit, where the United Nations hopes to reform the way that emergencies such as the Syrian refugee crisis are tackled and funded, after a spate of global crises displaced 60 million people and overwhelmed U.N. aid budgets.

Bruce said that the bank was also mindful that refugees and migrants could have a positive economic impact over the longer term, and it wanted to advise governments about policies that would generate a dividend from hosting displaced people.