As another World Refugee Day is marked this week, the numbers and complexity of the global forced displacement crisis remain overwhelming, on the two-year anniversary also of the massive exodus of hundreds of thousands of Muslim Rohingya into Bangladesh after de facto expulsion from Myanmar’s Rakhine state.
Despite Sheikh Hasina’s government winning third-term re-election in a landslide, its MSCI frontier market entry has been flat through May, as it purges state bank balance sheets and management, and grapples with the million of refugees at the world’s largest camp alongside communities internally displaced by climate change’s rising seas. International community humanitarian aid appeals and concessional borrowing through a special refugee window in the World Bank’s International Development Association arm have fallen short of pressing needs, especially as seasonal monsoons destroy flimsy housing and breed disease.
Dhaka provoked a global outcry with a proposal to relocate part of the Rohingya population to an environmentally-fragile island to isolate them further, since they are not allowed to legally work or attend school. It also struck a deal with Myanmar counterparts to begin voluntary repatriation to Rakhine, but few signed up until safety and long-demanded citizenship claims can be honored.
In the Cox’s Bazaar area where the refugees are located near popular beaches, Chinese and Indian tourism has suffered. Prime Minister Narendra Modi’s nationalist political campaign also promised further deportations of Rohingya living in the country, who are often accused of terrorist sympathies on social media.
Indonesia and Malaysia have also received “boat people” inflows over the years, and raised their plight in ASEAN diplomatic summits
Indonesia and Malaysia have also received “boat people” inflows over the years, and raised their plight in ASEAN diplomatic summits, but official declarations have not translated into jobs and education to facilitate integration, despite consideration of conventional or Islamic bond issuance for this purpose in the context of local community support.
Application of standard private capital market tools to address the chronic multi-billion dollar annual shortfalls through bilateral and multilateral funding is a core recommendation of the new United Nations Global Compact for Refugees. Progress will be reviewed at the upcoming September General Assembly session, and organizations like the Refugee Investment Network and World Refugee Council, based respectively in the US and Canada, are mobilizing both small and large-scale innovative solutions mixing commercial and impact investment.
Outside the region, over the past year the magnitude of Venezuelan migration into Andean neighbors has converged with Syria’s tragedy and the millions who have fled civil war to stay in Jordan, Lebanon and Turkey. The UN refugee agency estimates that 4 million people (one-tenth of Venezuela’s population) have crossed borders into Colombia, Ecuador and Peru amid economic depression and hyperinflation; crippling drug, food and fuel shortages; and the violent standoff between the Maduro regime and opposition president Juan Guado, who is recognized as the country’s legitimate leader by the hemisphere’s democratic countries. The government relies on Chinese and Russian credit to stay afloat after defaulting on most of the estimated $50 billion in emerging market debt. The Trump administration claims it is in contact with the International Monetary Fund, World Bank and Inter-American Development Bank on a “day after” Maduro exit reconstruction plan, with external debt restructuring a presumed element.
In the meantime, Colombia has absorbed 1.2 million refugees, according to President Ivan Duque, which will shave gross domestic product growth half a percent this year to under 3%, and widen the deficit beyond the fiscal rule ceiling to over 3% of GDP. Fitch Ratings has a negative outlook that may imperil sovereign investment-grade status with the twin current account and budget gaps, in part due to costs and confidence effects from incessant inward migration. Ecuador does not allow the Venezuelans to work with its own double-digit unemployment, and Peru recently ended the practice of no-document asylum and full social services to entrants as President Martin Vizcarra looks to pass political reforms and call for new elections.
President Duque and his team were recently in London to convince global investors that the influx was manageable in financial market terms, as officials have expressed interest in developing dedicated bond and equity instruments that could harness hundreds of millions to billions of dollars at a clip also for Venezuelans’ return. A flagship World Refugee Council report called “A Call to Action” urged such pilots, highlighting potential displacement-related infrastructure and company portfolio allocation, as a member delegation also heads to London to promote fresh long-term reassurance.