Supporting Turkey in tackling the refugee crisis

Supporting Turkey in tackling the refugee crisis

The refugee crisis triggered by the civil war in Syria is putting a heavy burden on Turkey. The massive inflow of people has caused huge strains on the already limited resources and services in the poorest parts of the country. As the fighting continues, the crisis shows no sign of abating.

It is therefore imperative that the international community steps up its efforts to support Turkey and the countries of the region to find ways to cope with this enormous challenge. A conference in London on Feb. 4 that raised more than $10 billion was a major step forward. Now it is time to deliver. 

To alleviate the huge burden of the high – and growing – number of refugees on the host countries, a number of steps must be taken. International organisations need to work swiftly to formulate their own contribution and to ensure that there is a joint approach that avoids duplication of effort and which ensures the most efficient use of scarce resources. 

The European Bank for Reconstruction and Development (EBRD) has a skill set and a business model that can be applied to good effect in this situation. Last week we announced a plan in response to the refugee crisis to finance up to 500 million euros in new transactions in refugee-hosting countries, subject to mobilising an additional 400 million euros in grants.  

We are developing a pipeline of projects including financing for small and medium enterprises and investments in municipal services. We are focusing on concrete projects, building the economic resilience of countries hosting refugees and strengthening their capacity to cope in the medium-term. In this the private sector has a critical role to play as the engine of economic development. 

In Turkey, the authorities themselves have already taken important steps to deal with the impact of the mass influx from across its borders. By issuing work permits to refugees, they are helping to fend off an abrupt expansion of a damaging shadow economy.

But we must not leave Turkey to deal alone with the shock to its whole economy of the refugee crisis. When I visit  Turkey this week – including a trip to Gaziantep close to the border with Syria – I will see for myself just how the crisis is affecting the country and I will be able to assess better how the EBRD can respond to its needs.  The broad outline is clear. We are aiming to support the Turkish economy with the provision of credit lines to local banks and microfinance institutions for on-lending to small firms. 

We shall reach out directly to selected small enterprises, with finance as well as advisory services. The EBRD is already an important investor in Turkey. In 2015 alone, we invested 1.9 billion euros in the country and plan to continue providing a high level of finance.

We will also support reforms to policies to help promote an environment where refugees can make an active and positive contribution to local economies. Creating competitive, stable but also socially inclusive governance frameworks will allow the private sector to thrive and cope with current challenges. Cash is good, but jobs are infinitely better. Only the private sector can achieve this.

In addition, municipal services and infrastructure need investment to cope with the increased demand for basic supplies like water, transport or waste treatment, addressing the most urgent needs without losing sight of their wider impact and benefit. While the immediate challenge is the refugee crisis, our thinking and planning must reach beyond this horizon. The investments and contributions we make today must also remain valid and valuable when the refugee crisis subsides and people will again be able to return home. 

One day this will happen, and then the legacy of today’s crisis will include a strengthening of the economies of the host countries which will stand them in good stead in the future with a stronger private sector, a better infrastructure and more inclusive policy environments. 

We stand ready to support this response. We can do so. And we must.

*Suma Chakrabarti is the president of the European Bank for Reconstruction and Development.