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Resettling Refugees – an Economic Gamble or Safe Bet?

The recent heavy influx of asylum seekers from Northern Africa and the Middle East has left Europe scrambling to maintain social cohesiveness. The exceptional difficulty of striking a delicate balance between political interests, humanitarian concerns and economic considerations has been made abundantly clear. For Australia, though sufficiently removed from bearing the major brunt of forced migration, the issue of refugee politics is nevertheless a sensitive topic.

Australia is no stranger to migration. Arguably, part of the nation’s post-war success could be credited to accepting refugees – who provided a much needed boost to the national workforce. Nevertheless, economic concerns have often been cited as a reason to decrease or to stop out intake. The expense of settling new arrivals, the potential ongoing economic costs and the potential threat presented to local jobs are some of the articulated and ongoing economic fears.

Moving beyond populous rhetoric and economic scaremongering, are refugees an encumbrance or a valuable opportunity for a host country? Part of the difficulty in reaching a clear answer to this question is that, until several years ago, there has been a marked lack of statistical data that measured the economic contribution of refugees and migrants.

A 2013 review of research on refugees in Australia did not find a single model or study showing that refugees posed a burden on the national economy in the long term. More recently, a study released by the Australian Bureau of Statistics in September showed that accepting refugees was actually beneficial for our economic well-being as a nation.

The study showed that, not only were migrants advantageous for the economy (generating $38 billion in total income in 2009-10), but that ‘humanitarian migrants displayed greater entrepreneurial qualities and reported a higher proportion of income from their own unincorporated businesses’. This income was reported to increase notably following five years of residency – proving them to be among our most accomplished individuals.

Australia is not immune to vulnerabilities associated with the demographic challenges of an aging society. Our need for a healthy, young workforce is increasing every year and we are slowly becoming more reliant on overseas migration to achieve this. Modelling by Oxford Economics shows that Germany, a nation who faces similar demographical challenges, could increase its GDP by 0.6 per cent by 2020 through the growth of its labour force if the country were to accept 1 million refugees over three years.

There are numerous anecdotal success stories too, such as Lebanon’s refugee experience. Facing their own institutional and geopolitical challenges, the relatively small nation has accepted over one million refugees from Syria. Yet the growth of the Lebanese economy has exceeded expectations, with projected growth anticipated to be a further 2.5 per cent this year, the highest since 2010.

This resilience in the face of rapidly declining investment and dwindling tourism has been supported by the influx of refugees who provide an important source of demand for local products and services. In Turkey, research shows that while Syrian refugees may have displaced some unskilled workers, they have also boosted formal non-agricultural jobs and increased average wages.

In Australia, our most recent success was highlighted by a report published by Deloitte. Nhill, a town in rural Victoria, received 160 Karen refugees from Myanmar. Through a special recruitment process as part of their resettlement plan, the Karen community boosted employment in the town by 3% in five years and added a total of 70.5 Full Time Equivalent jobs. For a small country town with a rapidly declining population, the transformation was remarkable.

Refugees make substantial contributions to their host country by increasing demand, expanding or opening markets and bringing new skills to fill gaps in employment. Economic benefits depend on the support refugees are provided with upon arrival. While a variety of social, political and even geographical considerations should be taken into account, the short-term economic strain of settlement and integration is more than likely to be outweighed by the creation of long-term economic opportunities.

Valeriia Minigoulova is the International Trade and Economy Fellow at Young Australians in International Affairs.

This article can be republished with attribution under a Creative Commons Licence. Please email with any questions or for more information.

Image Credit: UK Department for International Development (cropped) (Flickr: Creative Commons)

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