13 February 2019

Internal displacement could cost countries billions of dollars a year

Geneva, 13 February 2019 - First estimates of the financial impact of internal displacement have been released by the Internal Displacement Monitoring Centre (IDMC). The Geneva-based organisation’s new report estimates the average annual economic costs of the consequences of internal displacement on health, shelter, education, security and income. Researchers assessed these costs for eight countries which have recently experienced significant displacement in the context of conflict, disasters, or both. 

The findings reveal the average annual economic impact for each internally displaced person (IDP) ranges from $174 in Somalia to $451 in the Central African Republic (CAR). Taking the average cost per IDP across all assessed countries, $310, and applying it to the total number of IDPs in the world - 40 million as of the end of 2017 – would result in a global financial impact of internal displacement of nearly $13 billion per year.  

Alexandra Bilak, director of IDMC, said: “We have long understood the devastating impact internal displacement can have on the safety and wellbeing of people affected by conflict, violence, disasters and development projects. But internal displacement also places a heavy burden on the economy, by limiting people’s ability to work and generating specific needs that must be paid for by those affected, their hosts, governments or aid providers.” 

While conflict and violence are routine drivers of displacement in Somalia, the most significant trigger during the period studied was drought, which forced hundreds of thousands to flee in search of food, water and work. In CAR, decades of instability have led to a displacement crisis which this research estimates costs, on average, the equivalent of 11 per cent of the country’s GDP each year. 

In all the countries assessed; CAR, Haiti, Libya, the Philippines, Somalia, South Sudan, Ukraine and Yemen, the highest financial burdens come from lost income, support to housing and healthcare. Results also indicate that impacts seem higher in low-income countries than lower-middle or upper-middle income countries.   

The report used publicly available data to assess the costs and losses associated with internal displacement’s most direct consequences on health, shelter, education, security and income. These estimates do not account for longer-term consequences of internal displacement, such as the future reduction of income linked to a displaced child’s inability to access school. The eight countries assessed were chosen for their geographic and economic diversity and availability of data.   

“This new research clearly shows the risk internal displacement represents, not only for human rights and security but also for national development,” added Alexandra Bilak.  

“More data and analysis are needed to further identify where the financial losses are greatest and help governments and aid providers prevent future displacement, as well as respond more efficiently to existing crises.” 

This research was funded by the Office of US Foreign Disaster Assistance and the Swiss Federal Department of Foreign Affairs. 

Notes to editors:
About IDMC: IDMC is the world’s authoritative source of data and analysis on internal displacement. Since our establishment in 1998 as part of the Norwegian Refugee Council, we have offered a rigorous, independent and trusted service to the international community. Our work informs policy and operational decisions that improve the lives of the millions of people living in internal displacement, or at risk of becoming displaced in the future. 

IDMC’s thematic research series ‘The Ripple Effect: Economic Impacts of Internal Displacement’ seeks to measure the effects of internal displacement on the economic potential of IDPs, host communities and societies.  

Download this latest report ‘Unveiling the Cost of Internal Displacement’. 

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