IMF eyes ‘bigger, bolder’ effort on refugee crisis

Displaced Iraqi children from the minority Yazidi sect, fleeing violence in the Iraqi town of Sinjar, pose for photographer at a refugee camp on the outskirt of Duhok province. (Reuters)

Reuters Thursday, 14 April 2016

International Monetary Fund Managing Director Christine Lagarde on Wednesday said efforts to deal with refugees from war-torn countries in the Middle East and North Africa required a “bigger, bolder and broader approach.”

Lagarde, participating in a panel discussion on refugees at the IMF and World Bank spring meetings, said that financing volumes and levels of government support needed to be “bigger than what people think of at the moment.”

“It’s a humanitarian major crisis, which calls, in our view, at the IMF, for collective, massive action,” Lagarde said. “That humanitarian crisis is of huge scale. It requires a bigger, bolder and broader approach.”

Lagarde did not provide any details on how much more financial resources would be required. The IMF in January estimated that for countries in Europe, budgetary expenses for asylum seekers could reach nearly 0.2 percent of gross domestic product in 2016, up from 0.08 percent in 2014.

IMF Managing Director Christine Lagarde speaks at a refugee crisis panel in advance of the IMF/World Bank spring meetings in Washington. (Reuters)

Lagarde also said that for countries that are able to integrate refugees into their workforces, the influx can boost growth potential. She cited IMF research showing that longer-term annual GDP growth could increase by 0.2 percentage points on average in Europe.

Countries that are more open to allowing work permits for refugees, such as Germany and Sweden, could see growth increasing by 0.5 percentage point.

“In a region of the world where growth is 1.5 pct on average, hey, 0.2 percent is worth having a look at,” Lagarde said.