With the number of Ukrainian refugees reaching over 5.6 million people as these lines are written, this is a crisis that merits intelligent long-term policy design to help both refugees and their host communities.
In many cases, conventional wisdom dictates that recently arrived refugees, such as Ukrainians in Poland or Moldova, return to their country of origin. sooner rather than later. While that is certainly the hope, the reality is that in many cases refugees tend to settle outside their home country for long periods of time, if not their entire lives. Syrian refugees began fleeing in 2011, and more than 10 years later they still constitute one of the largest groups of refugees on earth. Venezuelan refugees, who began fleeing en masse after 2014, continue to increase in number.
Thus, the perception that refugees will stay for a short time is often what motivates policies that could, in fact, be counterproductive. An example is the Syrian refugees in Turkey, who arrived from 2011. At first, politics denied their right to work, perhaps driven by the perception that Syrians would return to Syria soon enough, alongside the perception erroneous that their participation in labor markets be detrimental to the results of the work of the locals. A few years later, in 2016, when it was clear that Syrians were not going to return anytime soon, the Turkish government began giving its population of Syrian refugees working license. Previously, the millions of Syrians living in Turkey had no choice but to not work or to work in informal labor markets.
Another example is that of the Venezuelan refugees in Colombia. The Colombians showed a desire to design a policy from the beginning of the flow. Very early on, Colombia gave the Venezuelans Special residence permit (or PEP, its acronym in Spanish), a special visa that gave Venezuelans full access to labor markets as well as access to public health and education services. However, the PEP was known for its short duration of only two years (although, de facto, renewable). Anecdotally, Venezuelans had a hard time getting jobs with the document, often because companies didn’t know about it, and in many cases the two-year horizon was too short for companies to hire a employee. However, Colombia – having learned this lesson – is now implementing a 10-year protection status for all Venezuelans in the country which will replace the PEP.
Thus, countries receiving Ukrainians today should not be guided by the possibility that their stay will be temporary, and instead offer them a regular migration status that is not ephemeral.
It is crucial to have policies in place to provide refugees with full access to labor markets and full freedom of movement. In fact, we all know that preventing people from working in the formal sector forces them to work in the informal sector (which is often large in developing countries). This is a lose-lose proposition, as workers in the informal sector generally receive lower wages and do not pay income taxes. None of these outcomes are preferred by any government. Moreover, having the right to work in many cases is not enough. Finding a job is difficult for everyone, let alone people who have just arrived in a new country, often without knowing the language and without large enough networks to facilitate the job search process. Therefore, offering policies that facilitate matching between employees and employers (which I mentioned here) could be of great help.
Finally, it is crucial to devote the (limited) funding not only to much-needed humanitarian assistance, but also to investment in integration efforts. Funding, whether from the international community (as it should be) or public funds, can be a game-changer for integration when properly invested in host communities. Why? Because host communities—in response to the increase in their population—will need to expand their infrastructure, such as schools, hospitals, roads, telecommunications, etc. These investments in public goods improve the overall productivity of workers and local businesses. It is important to note that financing should also be given in the form of credits to the private sector so that companies can grow appropriately and thus hire more workers. A good example is the 2018 program of the The Colombian government will provide lines of credit worth $30 million – as part of a larger investment package of more than $200 million – through the national development bank, Bancoldex, to finance capital investments in the private sector in areas with large influxes of Venezuelan migrants. Using the most basic economic model – the same one some people use to explain why wages should fall when immigrants arrive – a proportional increase in investment (increase in capital stock) would offset any negative impact of migration on wages. In practice, this will allow local businesses to adapt to higher demand, hire more workers and even take advantage of the skills of newcomers.
Ukrainian refugees can make a significant contribution to the countries hosting them, but this requires the right policies to be in place. To do this, it is important to examine the evidence and not be misled by misperceptions, as well as to learn from the experiences of other countries. This alone can turn a challenge into an opportunity.