Five Ways to Improve the World Bank Funding for Refugees and Hosts in Low-Income Countries and Why These Dedicated Resources Matter More than Ever

Sarah Charles , Cindy Huang , Lauren Post and Kate Gough

The International Rescue Committee (IRC) and the Center for Global Development (CGD) have been closely following the rollout of the IDA18 sub-window for refugee hosting nations, particularly in East Africa (Ethiopia, Uganda), West Africa (Cameroon, Chad), and Asia (Bangladesh). Drawing on original research and analysis, as well as field visits, this note identifies a few clear successes and areas for improvement. It also outlines recommendations for the implementation of the IDA18 sub-window moving forward, and makes the case for a sub-window in the IDA19 replenishment.

For too long, the international community has accepted the convenient fiction that refugee crises are temporary. In 2016, as waves of refugees came ashore in Europe seeking a life free from violence and conflict for themselves and their children, a spotlight was cast on the hopelessness that exists in even relatively well-funded refugee contexts—where there are few, if any, opportunities for meaningful livelihoods and education—and the very real struggle developing countries face under the strain of hosting large numbers of refugees. This spotlight shined brightest on Jordan, Lebanon, and Turkey, which collectively host more than five million Syrian refugees.

The World Bank has been a leader in responding to the fact that the traditional humanitarian system was not designed to meet medium or longer-term needs, and has begun to play a significant role by providing multiyear financing and engaging in policy dialogue on refugee rights and opportunities. The Bank also led the way in recognizing that the dynamics that were so apparent in the Middle East had long existed around the world. In response, in late 2016, the World Bank made an important and significant decision to raise a dedicated $2 billion in its IDA18 replenishment (July 1, 2017–June 30, 2020) that is available as additional concessional financing to low-income countries (LICs) bearing the burden of hosting large numbers of refugees.

With this decision, the World Bank jumped feet first into contexts that were long dominated by humanitarian actors. It brought a set of resources, expertise, and credibility and relationships with host governments that were new to refugee response—including a deep bench of experts and best practices for how to strengthen service delivery and infrastructure and improve socioeconomic outcomes for poor and vulnerable populations. It also brought lessons learned from the implementation of the Global Concessional Financing Facility, a similar model that provides additional financing at concessional rates for middle-income countries (MICs) hosting large numbers of refugees and that has been piloted in the Middle East. In creating the IDA18 sub-window, the World Bank catalyzed the so-called humanitarian-development nexus from mostly rhetoric to real test cases.

Over the last two years, there have been some critical and consequential changes as development and humanitarian actors joined forces to respond to protracted refugee crises. Staff throughout the World Bank have had to grapple with how to advance and adapt the Bank’s toolbox to accommodate the unique needs of refugees and approaches of new partners, particularly the UN Refugee Agency (UNHCR). As World Bank-financed programs start to move from paper to implementation, there is promise of real improvements in the lives of those adversely affected by displacement. Still, remaining uncertainties and challenges need to be addressed if the Bank’s financing is to have its intended impact for refugees and host communities. While the Bank brings many unique assets to address protracted displacement, its model of host governments as clients and the priority placed on disbursing funding can sometimes limit its capacity and willingness to engage robustly on policy and protection issues. In this note, we discuss early achievements and challenges of the IDA18 refugee sub-window, and offer five recommendations to improve its impact.

The IDA18 midterm review, to be held in Livingstone, Zambia from November 13–15, serves as a critical moment for the World Bank and its stakeholders to take stock of progress and challenges associated with the refugee sub-window, and put mechanisms in place to correct course where needed. It is also an opportunity to begin thinking about the goals and structure of the IDA19 replenishment, and consider how the Bank can best support LICs that are fragile, conflict-affected, and/or hosting large numbers of refugees.