UNHCR welcomes new finance instrument to aid refugees and hosts

NEW YORK – UNHCR, the UN Refugee Agency, has welcomed an innovative financing instrument to address refugee crises in middle income countries worldwide that US President Barack Obama announced at the Leaders’ Summit on Refugees in New York.

In all, 86 per cent of the refugees under UNHCR’s mandate in 2015 were in low- and middle-income countries close to situations of conflict, many of which struggle to come up with sustainable means to manage the additional costs of hosting them. 

The World Bank’s Global Concessional Financing Facility (GCFF) will help them to acquire key development financing while at the same time bridging the gap with organizations providing direct humanitarian assistance on the ground.

Attending a high-level panel at the UN General Assembly, UN High Commissioner for Refugees Filippo Grandi welcomed both the facility, and a US$50-million contribution from the United States at the Leaders’ Summit on Refugees on September 20 that made it operational.

“I believe that the GCFF is well positioned to support investment projects and initiatives that can support longer term growth, providing opportunities for both local and refugee populations alike in middle income countries,” Grandi said.

"This will lessen pressure on government and humanitarian finances, permitting resources to be better and more efficiently targeted."

“If more refugees and local communities can find employment, are free to trade or open businesses, they can contribute more to the economy and to their families. This will lessen pressure on government and humanitarian finances, permitting resources to be better and more efficiently targeted," he added.

Since the Syria crisis erupted in 2011, some 4.8 million refugees have been hosted by middle-income neighbours Egypt, Iraq, Jordan, Lebanon and Turkey. Worldwide, Turkey hosted more refugees – 2.5 million – than any other country last year, while Lebanon hosted more refugees compared to its population than any other country.

The GCFF ramps up to a global scale the Concessional Financing Facility for the Middle East and North Africa (CFF), which was launched earlier this year to support Jordan and Lebanon, the two middle income countries whose demographics have been most altered by hosting large numbers of refugees.

Grandi said the CFF fulfils two important roles that were absent at the beginning of the Syria crisis five years ago. Firstly, it offers to governments the possibility of financing for investment projects that address the development needs of both the refugee population and the local host communities. 

“Pursuing benefits for both refugees and local communities is surely an equity model that we should replicate elsewhere.”

“Pursuing benefits for both refugees and local communities is surely an equity model that we should replicate elsewhere,” he said. 

Secondly, its sends an important signal of solidarity with the host country governments and population, so that the donor community recognizes that the challenge will be long term. Their costs are very high; UNHCR's continued support is critical.

The mobilization of support for longer term programmes in post-emergency refugee situations has long been an objective for UNHCR and other humanitarian agencies. To date it has proved frustratingly elusive.

The CFF built on evidence derived from previous UNHCR-World Bank field research on refugee poverty in Lebanon and Jordan. It demonstrated clearly the limitations of humanitarian assistance in responding to the impact of the conflict on both the local economy and refugee circumstances.

UNHCR believes that such cooperation between humanitarian and development actors will prove increasingly effective in addressing protracted crises more sustainably.