The project in brief

Implemented by

The International Network on Conflict and Fragility (INCAF), OECD

Country

In developing countries and specifically in refugee hosting countries and countries of origin.

The four country case studies were conducted in:

• The Central African Republic
• Colombia
• Lebanon
• Uganda

Duration

November 2018

Description

Recognising that the DAC Recommendations on the humanitarian-development-peace nexus applies in refugee situations, the International Network on Conflict and Fragility (INCAF) has developed the Common Position outlining good practice principles for a nexus approach to the “right financing for refugee situations” in developing countries.

Project aims 

In solidarity with refugees and the countries that host them, the INCAF Common Position outlines good practice principles and aims at supporting a nexus approach in refugee situations in developing countries to ensure that aid delivers effective results and contributes to “leave no one behind”. Recognising that the Common Position must be situated in context, its objective is to support the “right” kind of financing in refugee situations. This requires that the right resources are in the right place at the right time and promote the right incentives.

The Common Position’s best practice principles were based on an OECD Policy Paper on “Financing for Refugee Situations (2019)”. The OECD conducted four country studies in different refugee situations − the Central African Republic, Colombia, Lebanon and Uganda. The case studies examined both refugee hosting countries and countries of origin in different geographic regions at different income levels and priority areas.

VIDEO: Financing Refugee-Hosting Contexts in the Age of the Global Compact on Refugees - OECD. 

Resources used 

DAC members allocated $26 billion to developing countries for hosting refugees in 2015-2017, of which 72% was humanitarian in nature. While critical for providing fundamental protection and support, development actors increasingly recognise the need to find long-lasting solution to refugee situations. In this context, the INCAF common position affirms:

the need for coordinated and coherent development, peace and humanitarian responses to prevent and address the root causes of refugee movements, the often protracted nature of refugee situations, and the strain large population influxes placed on host communities.

Based on best practices from the four case studies, INCAF proposes a set of seven principles that can contribute to making financing fit-for purpose, if contextualised and scaled-up in a coordinated and coherent manner.

These principles (the full text of each principle is reflected in the Common Position) call for:

1. development and peace interventions, by default, alongside humanitarian responses;
2. greater flexibility in financing and coordination systems to respond to the needs of refugees and their hosts;
3. financing that encourages enabling refugee policies;
4. support to national and local service systems;
5. increase in concessionality as necessary;
6. interventions and policies that support refugee self-reliance and
7. increased engagement with non-traditional donors.

Partners

• Development Assistance Committee members
• INCAF members:Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, European Union, Korea, Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United States, African Development Bank (AfDB), Asian Development Bank (ADB), Inter-American Development Bank (IADB), European Investment Bank (EIB), International Monetary Fund (IMF), UN Development Programme (UNDP), UN Office for the Coordination of Humanitarian Affairs (UNOCHA), United Nations Peacebuilding Support Office (UNPBSO), World Bank
• OECD
• Hosts for the OECD case study missions: UNHCR (in Central African Republic), The Government of Colombia (in Colombia), Agence Française de Développement  (in Lebanon), Embassy of Ireland (in Uganda).

Challenges and how they were overcome

A few examples below outline some of the challenges encountered by members in the context of financing for refugee situations and highlights different innovative approaches taken in close coordination with relevant actors to overcome these. Key challenges included coordination and coherence across the humanitarian-development-peace nexus, ensuring an inclusive response, overcoming the national-local level divide, and increasing concessionality in middle-income countries.

1) Refugee situations are protracted, requiring a humanitarian-development-peace nexus approach over a sustained period of time.

The research team found promising examples of the humanitarian-development-peace nexus in practice. This was especially true between development and humanitarian approaches. In Uganda, the United Kingdom’s BRAER initiative combines emergency life-saving assistance along with resilience building among refugees and their host communities to reduce Uganda’s humanitarian burden. A five-year programme, BRAER has provided food and cash transfers, played an important role in Ebola preparedness following an outbreak in border zones of the Democratic Republic of the Congo, and has supported self-reliance pilots in agricultural market development, jobs and livelihoods and agro-forestry and innovation.

2) Where necessary, matching arrangements can help reach both refugee and host communities, overcoming policy restrictions to achieve outcomes for both.

For example, in Lebanon the “Reaching All Children with Education (RACE II)” programme combines World Bank IBRD borrowing with grant financing from the Lebanon Syrian crisis trust fund to ensure equal access to education for both refugees and Lebanese, while working to improve the quality and reach of the national public education system coverage of both host communities and refugees.

3) Where possible, response strategies and financing need to be designed and tailored to the local level, in co-ordination with the national level. Local systems approaches are an opportunity to bring actors around common goals as close to the refugees and their hosts as possible. Local authorities, local NGOs and the local private sector were seen by many in the case study countries as important partners due to better access to remote areas, and their strong local knowledge and contacts. In the Central African Republic an area-based approach is being piloted based around “zones of convergence”. The goal is for peacekeeping, humanitarian and development actors to work together in these “zones” to facilitate access to services, job creation and to help build community infrastructure, benefiting refugee returnees as well as local communities. Community Development Councils at the local level would then be established to ensure a co-ordinated response and include the perspectives of refugees and host communities.

4) Loans can be a useful part of the financing mix, when necessary, and as long as they are as concessional as possible. Promising multi-donor and multilateral mechanisms have emerged as good practice. In Colombia for example, the Global Concessional Financing Facility (GCFF) increased the volume and decreased the cost of an already planned World Bank policy loan. This model allowed increased concessionality in financing the refugee and migration response, while leveraging volumes of financing only possible to middle-income countries via lending – the total loan value, including already planned activities, was USD 750 million. At the time of the field research in Colombia, a second World Bank loan in the health sector and an IADB loan with the Ministry of Labour were under development, following a similar model.

Results of the Good Practice 

• The Common Position is not a project but a set of principles based on best practices, that will continue to have a positive impact on the lives of refugees and their host communities, and particularly if contextualised and scaled-up.
• The best practices being implemented and referenced in the OECD policy paper “Financing for Refugee Situations (2019)”, can give an indication of the impact these have on the lives of refugees and their hosts.

How the project meets the GCR Objectives

This Common Position proposes good practice principles for financing in refugee situations in developing countries. The Common Position contributes to achieving mainly three objectives of the Global Compact on Refugees, especially the following objectives:

• Objective 1: Ease the pressures on host countries
• Objective 2: Enhance refugee self-reliance
• Objective 4: Support conditions in countries of origin for return in safety and dignity

It further supports the responsibility sharing thematic area and requires partnerships across the humanitarian-development-peace nexus when applied and scaled-up in refugee situations. Evidence from the four case studies that informed the Common Position illustrates that financing from the international community, both in terms of quantity and quality, is critical to refugee self-reliance and support to countries that host them or their country of origin. For example:

Under the Common Position principle 1, supporting interventions, jointly with host countries where possible, that benefit host communities, will help promote social cohesion and bring a positive development benefit for all. This meets GCR objective 1.

Under the Common Position principle 2, the use of development financing mechanisms and programs with greater flexibility and scalability to respond to refugee movements will facilitate to meet the needs of refugees in a timely and sustainable manner. Flexible funding also allows host governments to respond in an agile way to the dynamic nature of refugee movements. This meets GCR objectives 1, 2 and 4.

Under the Common Position principle 3, identifying ways to leverage non-aid contributions such as trade facilities or private sector investments, alongside humanitarian and development assistance, to incentivise enabling refugee policy change, will support refugee self-reliance and benefit the host country economic development. This meets GCR objective 1 and 2.

Under the Common Position principle 4, promoting a whole of government approach in refugee hosting countries, whereby not only host countries’ refugee agencies, but also sector ministries and local governments, include refugees in national and local sectoral development plans will ultimately promote access of refugees to social services and facilitate jobs and livelihoods. This meets GCR objective 2.

Under the Common Position principle 5, assessing the level of concessionality that is necessary and looking for ways to provide grants and/or to increase the concessionality of loans to governments where this is desirable can help achieve the volume of financing required in refugee situations, while decreasing the fiscal burden on host countries. This meets GCR objectives 1,2 and 4.

Under the Common Position principle 6, supporting, in partnership with national and local authorities and the private sector, local economic development that encourages the creation of decent and productive jobs, business development and self-employment to benefit all workers, including refugees and other forcibly displaced persons. Supporting economic activities of refugees and host communities can ensure that no one is left behind in the achievement of the SDGs. This meets GCR objectives 1, 2 and 4.

Under the Common Position principle 7, working to improve dialogue and coordination with other cooperation providers, as well as governmental and non-governmental actors, helping expand the provider base where possible and identifying areas for collaboration and complementarity, including opportunities for greater data sharing will help avoid duplication,  better target aid and support host countries or countries of origin. This meets GCR objectives 1, 2 and 4.

Next steps 

The INCAF Common Position reflects the best practice principles that are already being applied by INCAF members and other actors in refugee situations. Next steps include a discussion amongst INCAF members about a possible scale-up and contextualisation of the principles in selected refugee situations.