Internal displacement costs countries at least $20 billion a year

Geneva - New estimates reveal the economic impact of internal displacement caused by conflict, violence or disasters around the world.

With nearly 51 million people living in internal displacement, and an average cost per person of $390, the Internal Displacement Monitoring Centre (IDMC) estimates that the total global economic impact of internal displacement has reached $20 billion for each year of displacement.

This estimate has increased from $13 billion, or $310 per person, in the two-year period since IDMC’s last assessment. It is based on an original methodology which measures the loss of income when people are forced to flee their homes and the cost of meeting their basic needs in security, housing, health and education.

“With more people internally displaced around the world than ever before, responding to their needs places an immense financial burden on overstretched humanitarian budgets and fragile national economies that are already suffering the effects of the COVID-19 pandemic,” says Alexandra Bilak, Director of IDMC.

“Investing in preventing and reducing internal displacement and its impacts is, therefore, not only beneficial for security and wellbeing but also helps the economy at large.”

IDMC analysed 22 countries affected by significant internal displacement associated with conflict and violence, disasters, or a combination of both. The average cost and loss per internally displaced person (IDP) ranged from $114 per year in Colombia to $869 per year in Syria.

Syria had the highest annual economic impact at $5.6 billion, or 14% of the country’s GDP. After ten years of civil war, 6.5 million people have been uprooted. In Somalia, persistent insecurity has displaced 2.6 million people. The cost of meeting their needs, just over $1 billion, represents over 20% of GDP.

The economic impact of internal displacement in the DRC, Yemen and Iraq were also among the highest of the countries analysed, totalling $1.8 billion, $1.3 billion and $1.1 billion, respectively. This shows that large-scale, protracted crises can have a huge impact on the entire national economy.

The greatest financial burden associated with internal displacement across the 22 countries analysed stemmed from loss of livelihoods and health costs, which together accounted for two-thirds of the total economic impact.

“Most of the countries included in our analysis have been repeatedly affected by displacement crises and continue to be at risk of protracted or cyclical displacement. This highlights an urgent need to refocus our response from short-term humanitarian reaction to longer-term prevention and national development planning,” adds Alexandra Bilak.

These estimates are conservative and limited by the data available. They do not account for the economic impacts associated with longer-term consequences of internal displacement, or the financial impacts on host communities or communities of origin. They do, however, offer insight on the areas of greatest need for IDPs, so that governments and aid providers can tailor their interventions accordingly.