From the moment of arrival, refugees compete with the local citizens for scarce resources such as land, water, housing, food and medical services. Over time, their presence leads to more substantial demands on natural resources, education and health facilities, energy, transportation, social services and employment.
1. In some instances, they can significantly alter the flow of goods and services within the society as a whole and their presence may have implications for the host country’s balance of payment and undermine structural adjustment initiatives. One example of market disturbances would be the need to rent accommodation for office and residential purposes, not just for expatriates, but also for locally engaged staff, in response to a refugee situation. Increased construction activity results, but this is usually accompanied by increases in rent, benefiting those who are property owners, but adversely affecting the poor and those on fixed incomes, such as government officers. Purchase of large quantities of building material may make them scarce or unobtainable for local people, while also generating inflationary effects. Likewise, increased demand for food and other commodities can lead to price rises in the market which will stimulate local economic activity, although, again, not benefiting the poorest.
2. The presence of a large refugee population in rural areas inevitably also means a strain on the local administration. Host country national and regional authorities divert considerable resources and manpower from the pressing demands of their own development to the urgent task of keeping refugees alive, alleviating their sufferings and ensuring the security of the whole community. While most host governments generally have demonstrated a willingness to bear many of these costs, they are understandably reluctant to pay, as a price for giving asylum, the cost of additional infrastructure that may be needed to accommodate refugees.
3. A World Bank-sponsored study of uncompensated public expenditures arising from the refugee presence in Malawi recommended an emergency assistance programme in 1990-91 of up to $ 25 million. According to a systematic analysis of public expenditures, this was the amount, after deduction of international aid provided through UNHCR, invested in refugee related government assistance and administration during the preceding two years. Other refugee hosting countries could cite comparable experiences.
4. The economic impact of refugees on host areas, however, is not necessarily negative. An economic stimulus may be generated by the presence of refugees and can lead to the opening and development of the host regions. This stimulus takes place, inter alia, through the local purchase of food, non-food items, shelter materials by agencies supplying relief items, disbursements made by aid workers, the assets brought by refugees themselves, as well as employment and income accrued to local population, directly or indirectly, through assistance projects for refugee areas. The presence of refugees also contributes to the creation of employment benefiting the local population, directly or indirectly. Moreover, relevant line departments involved in refugee work as counterparts to UNHCR, both at central and local levels, also benefit from UNHCR assistance aimed at strengthening their coping and management capacities. Such assistance may include equipment supply, capacity building and related training components.
5. The presence of refugees, as a focus of attention, can also attract development agencies to the host areas. While infrastructure is developed in the initial stage primarily to facilitate the work of host governments, UNHCR and its implementing partners in the refugee affected regions, it can also serve as a catalyst to ‘open up’ the host region to development efforts that would otherwise never reach these ‘marginal’ areas.
If want to look up more of social and economic impact of refugees, please check up the website.
Block for refugees' negative impact, contention for Pro of positive impact of economy
UNHCR, January 6th, 1997 https://www.unhcr.org/excom/standcom/3ae68d0e10/social-economic-impact-large-refugee-populations-host-developing-countries.html