If countries won’t take refugees for moral reasons, let’s give them financial incentives

Rohingya refugee children watch a football game during sunset at Kutupalong refugee camp, near Cox’s Bazar, Bangladesh January 3, 2018.
Rohingya refugee children watch a football game during sunset at Kutupalong refugee camp, near Cox’s Bazar, Bangladesh January 3, 2018.
Image: Reuters/Tyrone Siu
We may earn a commission from links on this page.

Last week, the world was greeted by yet another heart-warming tweet from the White House regarding its position on immigration. Fears of a “caravan” of migrants fleeing harsh conditions in Central America and headed to the US border had prompted president Donald Trump to demand tougher immigration laws and slam the idea of a deal for undocumented immigrants brought to the US as children. Not exactly what the poet and refugee Emma Lazarus imagined when she wrote: “Give me your tired, your poor, your huddled masses”…“yearning to be free”.

The caravan tweet is, of course, fully consistent with Trump’s earlier comments about not wanting migrants from “shithole countries.” And sadly they capture a sentiment that many rich Western nations share when it comes to refugees, who are often treated as a cost to be avoided. But this response only drives home the fact that the plight of refugees does not stop at the borders of the countries they’re fleeing from, but are reinforced when they reach the borders of countries that reject them.

What if we depended less on potential host nations’ humanitarian impulses, and instead created a system that appealed to their economic self-interest? What if nations’ perceived self-interest could be better aligned with the humanitarian needs of refugees?

We begin with three basic propositions: Countries that create refugees can and should pay a price for it, countries that take them in can and should be paid for it, and refugees can and should have a say in where they go. Those three principles suggest a possible solution: We would allow refugees to assert a financial claim against the governments that have persecuted them, and also—if they wish—to trade that claim (a kind of “refugee debt”) to a host nation, thereby lessening the economic resistance and giving them some control over their own fates.

The mechanics of the proposal are best illustrated with a concrete example like the Rohingya, who are sometimes called “the world’s least wanted.” A recent United Nations report concluded that Myanmar’s army and police have murdered hundreds of Rohingya Muslims, gang-raped women and girls, and forced countless Rohingya from their homes in a situation that former U.S. Secretary of State Rex Tillerson described as “ethnic cleansing.”

Myanmar’s army has largely absolved itself of any blame for a crisis, and hundreds of thousands of Rohingya have fled to Bangladesh, Malaysia, Thailand, Indonesia, Australia and other neighboring countries. Some of those countries have gone to great lengths to shelter them; countless lives have been saved or improved as a result—a testament to the enormous success of international refugee law. But many lives have also been lost, as Rohingya—like millions of other displaced persons across the globe—find themselves caught between oppression at home and rejection abroad.

Xenophobia and racism are important factors driving the Rohingya crisis and others like it. But part of the story is economic. Potential host nations are responding to what they perceive as the costs of caring for refugees. Those costs tend to be concentrated among countries that can ill afford them, like Bangladesh, which now hosts more than half a million Rohingya refugees from Myanmar. We imagine that local populations find these costs especially unpalatable when they are the result of some other nation’s malfeasance.

The kind of state-supported oppression that the Rohingya seem to be facing is already forbidden by international law. The problem, as in so many other areas of international law, is that there is not a sufficient enforcement mechanism when those rules are violated, unless powerful nations like the US have strong individualized incentives to step up. In the case of the Rohingya, this has not been enough.

The world might look dramatically different if international law and practice can help generate the “refugee debt” we describe. This debt would be held by refugee groups against the nations that persecuted them—they would, in effect, have a financial claim against the governments that oppress and force them to flee. The size of the debt could be determined by an international institution (perhaps the UNHCR) based on the size of the group, the harm it has suffered, the prospects for its repatriation, and other factors.

Such a claim would of course be ephemeral without a strong enforcement mechanism. After all, private individuals and groups—especially those in dire straits—face all kinds of legal and practical obstacles when it comes to forcing payment out of a sovereign nation.

Refugee groups should therefore be able to trade their claim to a host nation, which could then pursue it. This would increase the host nation’s incentives to accept the refugees (by lessening the perceived cost of doing so), and also increase the chances that the debt is actually paid, since the host nation would be in a much better position than the refugees to enforce it. For example, countries that trade frequently with each other could use these claims as offsets against other sovereign debts. Between them, Bangladesh and Thailand import hundreds of millions of dollars’ worth of goods from Myanmar, and in recent years have also been receiving untold numbers of Rohingya refugees. Thailand could offset the cost of the latter against the former.

Obviously, the local law of the oppressing nation won’t help the enforcement such a claim, but that’s not necessarily a problem. If the claim were to be recognized in the courts of nations that host the world’s trading capitals, it would generate a cost that oppressive, refugee-creating nations would not be able to easily ignore.

Ours is but one of many recent proposals on the table to help ease the global refugee crisis. Many of those proposals, however, rely on host nations accepting the burdens of protection voluntarily—precisely the costly obligation that has caused so many of them to balk. We know our proposal cannot come close to eliminating the perceived cost, but maybe it can make a difference at the margin in reducing the part of the resistance to refugees that is based on economics.

There are problems with what we propose, of course. One is the difficulty of collecting debt claims against a sovereign state that does not want to pay. But even the most insular of misbehaving states has to transact on the international markets for food, oil, and arms.  No trading partner wants to risk its claim being seized to pay someone else’s debts—a technique perfected by wall street investors who brought a recalcitrant Argentina to its knees in federal court in New York some years ago (and without the support of the US government).

Another potential criticism is that we unduly commodify matters of human safety and dignity. But refugees are already commodified. The current regime treats them as nothing more than a cost. We want to make them not into assets, but agents.

Joseph Blocher & Mitu Gulati are professors at Duke University School of Law. Their related article in the Columbia Human Rights Law Review is, “Competing for Refugees: A Debt-Based Solution to a Humanitarian Crisis.”