Economic Effects of Syrian Refugees in Turkey - Literature review Example

Abstract

The influx of Syrian refugees into Turkey has diverse economic implications to Turkey. Apart from increasing the population in Turkey, it affects employability of the Turkish people. This paper addresses the economic implications of Syrian refugees in Turkey. It addresses how the presence of refugees in Turkey has resulted in high number of unemployed persons. It also explains on how public expenditure is utilized in maintaining refugees in Turkey. The paper also explains on how the high number of Syrian refugees in Turkey has exerted pressure on basic needs, causing increase in their prices. Similarly, the paper expounds on how smuggling activities at the borders of Turkey has increased with the increase in number of Syrian refugees in Syria. The paper also compares the economic effect of Syrian refugees in Turkey with countries such as Lebanon and Germany. In addition to this, the paper provides recommendations that Turkey needs to follow to manage economic problems associated with influx of refugees.

The sum of forcibly displaced people globally was about 60 million in 2014. Among these, a good number, 14.4 million, were refugees, an increase of approximately 25 per cent from the number recorded in 2013. The abrupt increase in number of refugees is as a result of civil war in Syria as well as unrest in Middle East and other regions such as Africa and the Balkans. Refugee surge has serious economic and fiscal effects. Apart from consuming a small percentage of public spending, the presence of refugees leads to stretch of public resources. Considering this, Ongpin (2008) asserts that refugee population is a burden to the host’s development by either exacerbating or creating an inadequacy of resources. Similarly, some researchers claim that the contribution to the refugee to the nation stimulates the national economy. In connection with this, the paper aims at expounding on the economic impact of Syrian refugees in Turkey. In addressing this, the paper will provide detailed information on how the presence of refugees have affected the labor market, employment opportunities, business opportunities, wages of employees, and demand for employees in unskilled labor.

Syrian refugees contribute indirectly to hosts’ economies because of increased humanitarian support flows. For instance in Lebanon, the UN approximates to have spent 800 million dollars yearly on Syrian refugees, with 44 per cent of this money injected directly into the economy of Lebanon for procurement of items such as food cards, purchases, and in-king packages. In addition to the direct, immediate financial benefits, humanitarian support can also have a multiplier influence on the economies of the host. UNHCR and UNDP noted that for every 1 dollar spent on humanitarian aid, economies realized a multiplier value of 1.6 dollars (International Rescue Committee, 2016). Similarly, IRC report showed that cash assistance had a great multiplier implication on the local economy; each dollar spent by beneficiaries generated 2.13 dollars of GDP for the economy of Lebanese. Contrary to this, World Development Report 2011 (2010) claims that refugee influxes in Turkey results in increased and uncompensated public expenditures for their care and maintenance. The direct as well as indirect expenditure linked to refugees affect the scale of country’s capital investment. For instance, Turkey has spent approximately 4.5 billion dollars on the refugees it hosts. The amount is in relation to the claim that 500,000 refugees have been admitted in hospitals from their refugee camps and about 35,000 Syrians have born children in Turkey (Orhan, 2015). According to Orhan, humanitarian aid from the UN as well as European countries adds up to about 245 million dollars which is only 4.1 per cent of the total amount spent on refugees. From this, a person can affirm that Turkey diverts a great percentage of public expenditure to providing care and maintenance to refugees. Such diversions affect the economic development of a country since some economic developments are derailed to meet the needs of refugees.

International Labor Organization (ILO) (2014) asserts that Syrian refugees’ influx put pressure on livelihood resources like food, education, employment as well as health services. From this argument, it is evident that the livelihood of people of Turkey has been hardened by the presence of Syrian refugees. Similarly, Orhan claims that Syrian refugees contribute to the economic suffrage of the Turkish people (Orhan, 2015). According to him, the rise in population in cities leads to increase in rental prices which are a big burden to tenants with low income. In addition to this, Orhan states that some landlords prefer Syrian refugees to Turkish people because they provide higher rent payments. In addition to this, Orhan (2015) argues that the prices of basic things such as food have hiked because of increase in demand. As it was argued before by ILO (2014), the influx of Syrian refugees led to an increase in demand for different resources causing an increase of their prices. Just like Turkey, the influx of refugees into Germany between 1939 and 1951 resulted in considerable difficulties in food supply besides decent housing (Constant & Tien, 2011).

Ajluni and Kawar (2014) associate high rate of unemployment in host countries with high influx of refugees. According to them, refugees displace local workers in many organizations. Their assertion correlates with what took place in Germany in 1950s. According to Constant and Tien (2011), a continuing influx of refugees from other regions led to the rise of unemployment by 10.3 per cent. This assertion is also applicable in Turkey today; the rate of unemployment in Turkey has increased with increase influx of refugees into Turkey. According to Orhan (2015), Syrian workers are used very much in the industry, agriculture as well as small business sectors. The excessive use of Syrians by employers affects the Turkish citizens negatively since they deprive them source of livelihood in addition to crippling their economic activities. In support of this, Orhan states that majority of the Turkish people believe that 40 per cent to 100 per cent of their jobs have lost because of the presence of refugees. In tandem with this, Ajluni and Kawar (2014) claim that Syrians workers are preferred to Jordanian workers because they offer cheap labor. Similarly, Orhan argues that the provision of labor by refugees in Turkey has pushed wages down. Just like in Turkey, the increase in number of unemployed refugees in Germany led to decrease of wages (Constant & Tien, 2011). Such mentalities affect the productivity of local community negatively, impairing with the economic advancement of Turkey. The dependence on Syrian refugees by some of the organizations as the workforce is also claimed to cause unduly competition between companies that employ Turkish workers and those that employ Syrian workers (Orhan, 2015). The negative competition as a result of the presence of Syrian refugees in the Turkish employment market cripples the economy of Turkey since organizations are forced to employ some polices that are against their goals. For instance, organizations in Turkey are forced to reduce the salary of their employees as well as to lower the prices of goods and services. In addition to this, Orhan (2015) claims that negative competition between organizations may cause instability in the job market that is bad for employees as well as employers.

The presence of Syrian refugees in Turkey has led to loss of investment opportunities for the local community. According to Orhan (2015), a considerable amount of investments in Turkey belongs to the Syrians. The Syrians generate significant commerce because they have great networks in addition to close relationships with people from Middle East. Syrian merchants have also led to the distribution of Turkish products in Middle East. Equivalently, Orhan claims that the presence of Syrians has created an environment in Turkey that attracts investors. Orhan (2015) also claims that underground businesses owned by Syrian refugees result in unfair competition. While the presence of Syrian refugees boosts the economy of Turkey, it affects the economic development of Turkish people because it has limited them opportunities to advance.

Smuggling in the borders increases with increase of refugee influxes. Turkey being one of the greatest hosts for refugees, it experiences many smuggling activities (Orhan, 2015). For example, Syrian refugees smuggle archeological artifacts from Syria to sell for survival. Having once been part of the Roman Empire, Syria is rich in archeological artifacts. Today, archaeological findings made up of metals such as gold and silver are smuggled to Turkey before being marketed to the West. The smuggling of Syria artifacts through Turkish border may generate conflicts between Turkey and Syria, affecting their relationship which is good for economic development.

As it was argued above, high influxes of refugees to nearby countries put a lot of pressure on public resources in addition to forcing governments to spent some of the public funds in providing care and maintenance to refugees. To reduce the economic destabilization caused by refugees, the government of Lebanon implemented an official public policy to decrease the number of Syrian refugees in the country. As of early January 2015, the boarders of Lebanon were closed majority of the civilians running away from the war in Syria wishing to stay in Lebanon (Andres-Vinas et al., 2015). In May 2015, the government of Lebanon was asked by UNHCR to stop registering new refugees as well as to de-register those who moved to Lebanon in 2015. Apart from this, the government of Lebanon subjects refugees within the country not only to new complex, but also costly regulations to renew their residency visas. As a result of all these, about 70 percent of Syrian refugees were found to stay in Lebanon illegally (Andres-Vinas et al., 2015). Unlike Lebanon, Turkey government has done very little to regulate the movement of Syrian refugees into Turkey. The registration of Syrian refugees is done by the national authorities instead of UNHCR, as in the case in Lebanon and European countries. According to Dinçer et al. (2013), the Turkey’s open door policy led to many Syrians both documented and undocumented to cross the border into Turkey. Dinçer et al. also notes that Turkey unlike many nations provided the best humanitarian services to refugees. Turkey’s open door policy in addition to its good treatment for refugees contributed to an increase of refugee influxes into its territories. Equivalently, the continuous acceptance of Syrian refugees with valid passport into Turkey and providing them with residence permits affects the government’s effort in managing the economic issues arising from high influx of refugees.

A significant number of the Syrian refugees that live in Turkey are unemployed because of the increase in number of workforce. To reduce the unemployment problem, Turkish government is trying to stabilize its relationship with Syria so that some factories can be moved into Syria. In connection with this, Constant and Tien (2011) claim that some businessmen in Turkey have moved their factories into Syria where they believe there is cheap labor. Such decisions can contribute significantly to the reduction of the pressure put on Turkey’s economy. Apart from the factories in Syria providing jobs to Syrian refugees at the borders, some refugees will be encouraged to go back to their countries since their security will be assured by the two governments supporting the establishment of the industries.

For many years, Turkish authorities provided Syrian refugees with economic support in solitude. It was as a result of this that the increase of refugees in Turkey that made the Turkey government to spend much of the public expenditure on the care and maintenance of the refugees. To reduce this economic pressure, Turkey allows relief initiatives by Syrian organizations as well as individuals to support the refugees. For instance, Turkish authorities are currently allowing Syrians to work together with Turkish NGOs in opening humanitarian aid centers, health centers plus schools.

One of the challenges that affected the rate and quality of production in Germany was reliance on unskilled immigrants consisting of refugees and other persons in providing labor (Constant & Tien, 2011). Similarly, allowing any refugee to reside in Germany also impacted the economy of Germany negatively. These are among the challenges that Turkey is facing today because of allowing many refugees to seek refuge in its territories. Germany however managed to handle these problems effectively. For example, refugees were provided with resident title that allows them to be offered jobs only after ensuring that it will not have a negative effect on the labor market and no German worker can occupy the positions. Similarly, Germany provided residence permit to self-employed individuals who were ready to invest about 250,000 Euros in addition to creating more than five jobs (Constant & Tien, 2011). Unlike Germany, Turkey has no rule for regulating the employment of refugees and local communities. It is as a result of this that the presence of refugees in Turkey causes an increase of local communities’ unemployment.

Recommendations

Since the continuous influx of refugees in Turkey has many negative economic implications to Turkey, it is recommendable for the government to consider coming with new policies just like Germany. For instance, it is crucial for the Turkish government to put more efforts in monitoring the influx’s economic impact. Close monitoring will not only enable the Turkish government to locate the sources of differences between the refugees and the local communities, but also determine the contribution of the refugees to the overall economy of Turkey.

Stronger plus more holistic refugee policies must also be created by the Turkish government to regulate the movement of refugees into Turkey. Initially, it was documented that “the Turkey’s open door policy led to many Syrians both documented and undocumented to cross the border into Turkey.” Redrafting of this policy or introducing a policy such as that used by Germany can control the inflow of refugees to Turkey. For instance, providing residential permits to only refugees who contribute positively to the economy of Turkey through creating jobs or investing can boost the economy of Turkey.

In the above discussion, it was noted that Turkey spends a lot of public expenditure on providing care and maintenance to Syrian refugees. In fact, it was argued that Turkey spends approximately 4.5 billion dollars on the refugees whereas UN together with European countries contributes only 245 million dollars (4.1 per cent) of the total amount spent on refugees. From this, it is apparent that Turkey needs support from global organizations as well as European nations to protect its economy from deteriorating because of supporting Syrian refugees.

Majority of the Turkish people complain of the Syrian refugees taking their jobs and causing downgrade of wages. Such complains often affect the productivity of organizations, affecting the economic performance of a state. To combat this, it is crucial for the government of Turkey to employ the policy used by Germany to overcome problems associated with unemployment. Turkish government need to regulate employment of refugees in organizations in Turkey by providing them employment permits to work in organizations that are need of employees and none of the Turkish citizen has the ability to complete the job. Similarly, it is advisable for the Turkish government to regulate the salary provided to employees by all organizations by coming up with minimum salary for employees irrespective of their country of origin. Such a step will not only contribute to equality of employment opportunities to both refugees and local community, but also combat exploitation of employees including refugees by employers who are fond of underpaying their employees.

Just like Germany, the prices of basic needs such as foods and healthcare in addition to rent increased with increase of population because of influx of refugees. Such exploitation of the people on the basis of taking advantage of their situations affects the lives of people negatively. Setting rules that govern prices of basic needs is very essential because businessmen will be bound to them and as a result protect all people. Considering this, it is recommendable for the Turkish government to consider coming up with rules that govern business activities.

In conclusion, the influx of Syrian refugees into Turkey has affected Turkey and its people economically. Turkey’s open door policy contributes significantly to an increase of refugees its territories. Apart from causing an increase in price of basic commodities, influx of refugees has made many Turkish people to be jobless. The Turkish government also spends a significant amount of public expenditure in maintaining Syrian refugees. The presence of refugees in Turkey has also led to an increase of smuggling activities at Turkey’s borders. Management of the economic challenges in Turkey as a result of presence of very many Syrian refugees requires implementation of policies that govern employment and prices of basic needs.