Our leaders need to stop repeating the myth that refugees are an economic burden

The UK government’s plan to send some asylum seekers to Rwanda has rightly faced huge criticism. Even the Minister for Refugees, Lord Harrington, has declined to defend the appalling policy. The United Nations (UN) says the plan breaches international law and two legal challenges have already been launched against it.

Many are dissecting and demolishing Boris Johnson’s Kafkaesque speech announcing the scheme and related initiatives. I would like to play my part by focusing on this sentence: “We can’t ask the British taxpayer to write a blank cheque to cover the costs of anyone who might want to come and live here.”

In his speech, Prime Minister Johnson particularly focused on people crossing the Channel in small boats; the majority of these people are likely to be refugees. The notion that refugees are an economic drain on countries that provide them with sanctuary is simply false.

Inflows of asylum seekers generate significant positive effects on GDP in just three to seven years, according to a major study of Western European countries, including the UK. This is supported by research elsewhere in the Global North. For example, in the US, refugees pay US$21,324 more in taxes than they receive in benefits over their first 20 years in the country. Similarly, raising Australia’s refugee intake to 44,000 (from 18,750 in 2019) would increase demand for goods and services by AU$18.2 billion and sustain 35,000 full-time jobs a year.

Of course, the vast majority of refugees are hosted in the Global South rather than in the far richer Global North. Even in the more challenging economic environment of the Global South, forced displacement tends to improve the income, consumption and wealth of ‘host’ communities. Unfortunately, as in the UK, this does not stop negative headlines about refugees, such as Syrian refugees in Lebanon being portrayed by parts of that country’s mainstream media as dangerous.

While enabling refugees and other displaced people to flourish is crucial, the concept of displacement-affected communities – which includes members of ‘host’ communities along with forcibly displaced people – can be a more useful analytical lens.

In part, this is because many displaced people are not going anywhere. Our surveys show they have lived in their current location for 6.9 years on average, which is well over the five-year threshold for what the UN considers a ‘protracted displacement’ situation. But it is also because thinking about displacement-affected communities cuts through an ‘us versus them’ frame. All people, regardless of their background, deserve to be protected and empowered.

In Ethiopia, pioneering investment in Dollo Ado has supported the creation of livelihood opportunities for both Somali refugees and members of the ‘host’ community. A variety of cooperatives have been created in sectors including farming and energy. Overall, these cooperatives have raised incomes, contributed to building essential services and improved relations in this displacement-affected community. More broadly, although refugees are legally allowed to work in Ethiopia (unlike in some other countries of the Global South), the law is limited in scope and poorly implemented.

As well as helping to address immediate needs, care work and mutual aid enable people to participate in labour markets, whether formally or informally. Care work is important in all of our research locations; on average people spend seven hours a day on caring for those they live with. Yet care work is often underappreciated and uncounted because it is mainly done by women and unpaid. Mutual aid is important in most of the displacement-affected communities we are studying. On average, 30 per cent of our respondents say they give or receive financial support and 40 per cent give or receive non-financial support. Yet mutual aid is under-researched, perhaps because it is perceived to be insignificant compared with professionalised aid.

What can the UK government and wider international community do to help realise the economic potential of displacement-affected communities?

First, in line with the Global Compact on Refugees, they should promote the right to work, labour market access and labour rights for refugees. Laws and regulations are necessary though insufficient; compliance and enforcement mechanisms are vital.

Second, they should invest in building the capacity of social businesses in displacement-affected communities, and buy locally. In some respects, this is not a new idea. For example, in 2014, I wrote about the benefits of school feeding programmes that use food grown by local smallholder farmers rather than (often subsidised) food procured in the Global North. But now there is greater emphasis on the necessity of nurturing local financial institutions that are rooted in communities and geared towards the long-term development of small and medium-sized enterprises (as opposed to yet more microenterprises).

Third, they need to take mutual aid and care work seriously. That means better understanding and working with – rather than ignoring or undermining – the many positive examples of mutual aid. It also means ensuring that care work is systematically included in economic analysis, encouraging and contributing to investments in care systems, and supporting carers to advocate for their rights.

Fourth, while the UK government’s aid cut should be reversed, it is critical for powerful countries to think and act beyond aid. Transforming unjust economic rules (e.g. in relation to tax, debt and trade) would give Global South governments a fairer share of the world’s financial resources, and thus more opportunities to assist all those who are vulnerable within their borders. For instance, our surveys indicate that medical expenses drive the demand for loans in displacement-affected communities, meaning that universal health coverage could have hugely positive economic impacts in these places.

Back in the UK, and elsewhere in the Global North, refugees must be actively welcomed. And our leaders really need to stop repeating the myth that refugees are an economic burden.