Political and Economic Sustainability of Turkey’s Refugee Response

This comment is a continuation of the YIRA Winter 2016 International Trip Group’s Istanbul, Ankara, and Izmir, Turkey Trip Summary.

In 2015, as a response to the Syrian refugee crisis, the Obama administration resolved to increase the United States’ annual intake of refugees—from 70,000 refugees to 85,000 in 2016, and to 100,000 by 2017. Compared to the over 4.6 million individuals who have become refugees pursuant to the Syrian conflict, this increase seems modest at best. Nevertheless, even with such small numbers, Obama’s plan to expand refugee admission is far from universally supported. At the end of last year, the House passed the American SAFE Act to require a bevy of top government officials individually to sign off on each refugee application from Iraq and Syria, which would effectively halting admission of refugees from these regions; in January, the Act barely failed in the Senate on a filibuster with a 55-43 vote.

National security and terrorism concerns—as the SAFE Act’s name implies—have remained the primary and most publicized line of offense for those who oppose Obama’s plan. But for many, economic and fiscal considerations provide an equally compelling reason for Syrian refugee denial. “Our schools, job markets, and public resources are already stretched too thin,” remarks Republican Senator Jeff Sessions from Alabama with regards to the refugee crisis. For Senator Sessions and others, growing America’s $1.1 billion dollar refugee system simply yields untenable financial consequences.

Contrasted with this political context in the U.S., the case of Turkey seems perplexing. Since the onset of the crisis, Turkey has absorbed over 2.6 million Syrian refugees at a cost of over $8 billion, and counting—all with a GDP equal to approximately 5% that of the United States. Comparatively, Turkey’s financial commitment to aiding displaced persons is remarkable, and surely, the country must be reaching its fiscal breaking point. However, the selected director of one Istanbul administrative precinct, Yuksel Unal—effectively the precinct mayor—tells a different story. At the precinct level, Unal formulates expenditures that provide refugees with schooling, healthcare reimbursements, and a variety of other non-housing services. In Unal’s governance experience, “funding allocation [has] not [been] a huge problem” for government refugee policies. According to him, the public “accepts” large fiscal allocations toward refugee accommodation, and government spending is routinely cut “from every area” to finance Turkey’s refugee response.

When it comes to refugees, why is Turkey so different from the U.S.? Why has Turkish society proven so much more welcoming, in financial terms, to refugee populations? And perhaps as importantly, should the Turks be more concerned than many seem to be about financial strain from the crisis? Or is it the U.S. that overreacts?

Before answering these questions about the economic impact of Syrian refugees in Turkey, it is important to recognize that refugee crises economically impact host countries in two discrete ways. The first type of impact is direct influence on government budgets, and government services by extension. Adequate responses to refugee crises necessarily entail large public expenditures to process asylum claims and, in Turkey’s case, to construct and maintain refugee camps, provide health services, and execute a host of other functions. These expenditures potentially detract from the government’s immediate ability to spend for other purposes or accumulate debt. The second type of impact is that of broader macroeconomic changes associated with large population and demographic shifts. Any influx of individuals into a community has the potential to cause economic growth as the workforce grows and talent expands. However, such influxes can also create competition for jobs and resource access that cause some individuals in host nations to lose out.

Turkey’s Syrian refugee handling system certainly has flaws. Although the letter of the law guarantees Syrians free access to fundamental health care, in practice, poor execution of government reimbursement policies discourages many hospitals from offering services to refugees. Moreover, Turkey’s processing of refugees, Syrians and non-Syrians alike, largely occurs without the predictable rule of law and with bureaucratic obstacles: government executive orders provide and withhold rights and amenities that refugee populations seek on sometimes an ad hoc basis. Although all Syrian refugees have the right to live in newly-built refugee camps, the government provides no housing assistance for those who wish to move to cities. Despite these concerns, Turkey has done a lot of things correctly. Refugee camps on the border, which house hundreds of thousands of individuals, provide top quality services, education, and other amenities—one person who spoke to us described the facilities as “5-star camps.” Syrian children, inside and outside refugee camps, have access to schooling. Indeed, one representative from the UNHCR working in Turkey with whom we spoke described the overall response from Turkey as “unbelievable.”

And importantly, this $8 billion response from Turkey that has produced positive results in many areas further seems to have caused concern to no one to whom our group spoke in the country. One high-level Turkish official working in a foreign service capacity confidently posited, “Fiscally, Turkey’s response is… sustainable.” (Though “politically,” the story might be different in the future.) Sources generally reported that public dissatisfaction with the status quo—to the extent that dissatisfaction did exist—stemmed primarily from rising home prices in some major cities caused by skyrocketing housing demand. This grievance seems to bear little relationship with size of the government’s fiscal response to the refugee crisis.

Of course, this discussion is not meant to obscure the clear fact that efforts to address the refugee crisis would substantially benefit from increased funding; indeed, many aspects of integration and relief efforts sorely need further resource allocation. According to the representative from the UNHCR, program costs prove particularly problematic in education. While Turkey does provide free schooling for refugee children and has converted facilities into exclusively Syrian schools, city schools often lack sufficient funding for schooling materials, books, requisite clothing, and other similar costs. But, as underscored by the UNHCR representative, the presence of these albeit serious problems does not truly reflect an inability or unwillingness to offer refugees fiscal support in Turkey. The UNHCR worker, from her perspective, characterized the “main issue” with relief efforts as a relative reluctance on Turkey’s part to accept international aid and collaborate more with international partners. (The representative also noted that in refugee camps, education quality generally is significantly higher than elsewhere for refugees.)

Regarding other economic effects, many individuals with whom we spoke painted an optimistic picture of the prospects for overall economic growth in Turkey as a result of the Syrian migration. With Syrians pouring into the country and starting families, Turkey seems on course to gain a substantially more vibrant workforce—and consumption base—once Syrians integrate into society.

To some extent, though, these common sentiments may be cursory talking points. One individual working in the newly-established office of the Ministry of Interior Directorate General of Migration Management (DGMM), also expressed a positive overall macroeconomic outlook but did note some concerns. The DGMM employee noted that Turkey’s unemployed population currently stood at 2.7 million, and that “people are rightfully asking what will happen to [this unemployed group]” as Syrians integrate into the workforce and increase competition for jobs. Inevitably, he conceded, some Turks will lose out.

Just a couple of days—literally—after the DGMM official expressed his concerns this past January, the Turkish government radically altered domestic policy on Syrian refugee employment. The government introduced new regulations that would permit many Syrians to apply for and receive work permits. Soon, Turkey may find out whether the official’s prediction is true. But important to note is that in the status quo, Syrian refugees are still working, just illegally. Most sources to whom our group spoke acknowledged the existence of a black market for Syrian labor—unsurprising, because many Syrian families lack any other means of acquiring money. According to selected director Unal, child labor is a problem, too. Regulations prohibit child labor in Turkey, but fines levied against families sending their children to work have little efficacy if families have no money with which to begin. This point was driven home to me when, on my third day in the country, the restaurant worker who made my kebab for lunch proudly told me in English that he had immigrated from Syria. (He said that his experience in the country had been mixed and that he missed his home greatly.)

Indeed, anticipation of the concerns voiced by the DGMM official seem to be the causal force behind the name of the recent report published by Turkish think tank International Strategics Research Organization (USAK) in conjunction with the Brookings Institute: “Turkey and Syrian Refugees: The Limits of Hospitality.” Public outcry on the refugee question has proven refreshingly minimal so far, but some fear that the tide will change as hundreds of thousands of Syrians now enter formal workforce and as government aid efforts necessarily continue. The same official who characterized Turkey’s response as fiscally sustainable went on to note that he viewed his country’s response as “politically more unsustainable,” as resources continue to flow away from communities.

Recognizing the presence of economic losers is important for Turkey as it handles 2.6 million refugees, both to mitigate the challenges losers face and also to preempt future political opposition. Still, it is also important to keep the comparative picture in mind. The alternative to pursuing the policy path that Turkey has taken thus far would be to turn away millions from Syria literally fleeing for their lives, or to deprive these millions of the means to access any resources once in Turkey. An imperfect response to a humanitarian crisis of such a scale, even if not necessarily Pareto-optimal, might still be the most just action for a nation to pursue—particularly if the harms produced by such a response exist on the margins.

According to one high-level government official who spoke to us on the condition of anonymity, Turkey differs from “the West, [where] taxpayer opinion dictates everything.” While this official’s sardonic generalization may not capture quite all the nuances of the democratic processes in Western liberal democracies, he makes a valid point. The Turkish government undertook welcoming in and providing relief to refugee populations flowing from Syria. They directed substantial resources toward this cause, with little fanfare. Turkish hospitality has limits and problems remain for refugees. But government aid initiatives have operated—for years, now—without generating public outcry against a collapse of core government functions or decrease in service provision quality (leaving aside objections to rising home prices in some cities). The U.S. has its own share of fiscal challenges, distinct from Turkey’s. Perhaps in the U.S., though, the oppositional mentality toward expanding our overseas refugee program derives its origin from political, rather than financial or pragmatic, causes.