Finding Funding for Refugees: Help for Those Who Need it Most

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Syrian primary school children attending catch-up learning classes in Lebanon.
Syrian primary school children attending catch-up learning classes in Lebanon.

Finding Funding for Refugees: Help for Those Who Need it Most

It is impossible to be unmoved by the images of refugees we see in newspapers or on television, as we are simultaneously floored by the statistics.  There are more than 20 million refugees scattered across the globe and another 40 million people internally displaced worldwide.  Before joining the Economic Bureau’s (EB) Office of Development Finance, I would read these articles and be overwhelmed and daunted by the scale of the crisis.  Yet in the last year, I have had the opportunity to do work that has not only brought me face-to-face with the refugees behind the headlines, but also to take concrete steps to help make their lives better. 

South Sudanese refugees queue to receive a lunch of maize mash and beans, at the Imvepi reception centre.

While the American public is aware of the conflicts in Syria, Iraq, and Afghanistan, there are also people displaced from ongoing struggles in many other parts of the world.  Many of these conflicts have dragged on for decades, making it less and less likely that the refugees can return home.  The average refugee now remains exiled for an average of 10 years and voluntary returns by refugees are at a 30-year low.  While the more than $7 billion that the United States spent on humanitarian aid in FY 2016 helped provide food, shelter, and other emergency aid, long term refugees also need access to schools, jobs, and longer term social services.  That is where EB’s expertise comes in. 

Working closely with other Department of State offices, the Department of the Treasury, USAID, and the World Bank, I helped design and launch a new financing platform that would allow middle income countries hosting large numbers of refugees to access cheaper financing for development projects.  Donors across the globe can channel assistance through a World Bank trust fund.  Middle income countries can then borrow money from the fund at what effectively becomes a reduced interest rate for projects in education, healthcare, and job creation for refugee and host communities.  I traveled to Paris, Amman, Jeddah, and beyond to talk with donor and recipient nations and convince them that, with the correct structure and support, this new fund could become an important tool to support refugees and the nations who host them.

U.S. Ambassador to the U.N. Nikki Haley talks with Syrian refugee children at the Sakirpasa Umran school.

While I was in the Middle East working with Treasury and the team of negotiators on structuring the fund, colleagues from other Department of State Bureaus and the U.S. government interagency worked behind the scenes to build international donor support. They provided much needed expert advice to the negotiating team, and worked with the governments of Jordan and Lebanon to make sure that the fund would help them address their urgent needs in coping with a flood of Syrian refugees. 

Through diligent diplomacy, my State and USAID colleagues identified funds for an initial U.S. contribution of $25 million to support projects in Jordan.  In April 2016, the Deputy Secretary announced the U.S. pledge at a ministerial-level donors’ conference.  In July, I flew to Beirut for the first Steering Committee meeting of what soon became known as the World Bank Global Concessional Finance Facility.  While in Beirut, I came face-to-face with some of the refugees that we hope to aid, as they are highly visible on the streets of the Lebanese capital.  At the Leaders’ Summit on Refugees at the United Nations in September 2016, world leaders looked on as the World Bank President announced the Concessional Finance Facility as the newest instrument in the World Bank’s arsenal to help refugees around the world.

U.S. Ambassador to the U.N. Nikki Haley, rear, poses for photographs with Syrian refugee children at the Sakirpasa Umran school, funded by the US government.

Since its launch, the fund has approved discounted financing for nearly $900 million in development projects.  These projects will help Jordan and Lebanon upgrade water and sanitation infrastructure, build rural roads, implement labor market and investment climate reforms, and improve electricity delivery to refugees and host communities. 

The Department of State’s Economic Bureau played a key leadership role by acting as the “honest broker” that convened players within the Department and the interagency to work together transparently and cooperatively.  Even though our Bureau did not control the funding, we had experience working on trust funds and the ability to translate World Bank and Treasury concerns into a language that other Bureaus could understand and act upon.  By leading an inclusive process, the Department of State successfully brought this new fund into being, and it will have a real impact on refugee communities and host countries alike.

About the Author: Daniela Ballard serves as the Deputy Office Director of the Office of Development Finance

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