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How Poor Countries Foot the Refugee Bill

PARIS – The Syrian refugee crisis has focused attention on the need to improve management of refugee flows during times of crisis. One issue is particularly worrying: poor countries may be paying a large indirect price for rich countries’ efforts.

Data show that a substantial portion of the costs associated with the influx of refugees and asylum-seekers in some European countries is being reported as official development assistance (ODA) – the measure the OECD Development Assistance Committee (DAC) uses to track international aid spending. This leaves less ODA available to launch, sustain, or expand economic development projects in poor countries.

In 2015, the European Union’s DAC member states spent $9.7 billion of their ODA budgets on approximately 1.2 million asylum-seekers in their own countries. By comparison, they spent $3.2 billion of ODA in Syria, Afghanistan, Somalia, South Sudan, and Sudan – the top five countries from which those asylum-seekers had fled.

The rule enabling donors to report so-called “in-donor” refugee costs as ODA was introduced in the OECD-DAC Statistical Reporting Directives back in 1988. At first, few DAC donors took advantage of it. From 2010 to 2015, however, the share of total ODA reported as in-donor spending more than tripled, from 2.7% to 9.1%.