Crisis 'puts heavy strain on some front-line countries'

LONDON • The migrant crisis has weighed heavily on the economies of south-eastern Europe and the eastern Mediterranean, the European Bank for Reconstruction and Development has warned.

"The 'front-line' countries - those immediately bordering the conflict zone in Syria and Iraq - saw a massive influx of refugees" in recent months, the EBRD said in its outlook for the lender's 36 countries of operation that include former Soviet bloc countries.

"Turkey is estimated to be hosting 2.5 million refugees, while in Jordan, they account for almost one-fifth of the population," the EBRD said.

"This massive influx has strained public services, government finances and labour markets."

The EBRD was created in 1991 to help former communist countries like Poland and Ukraine make the transition to free-market economies and democracy. The bank has, however, since expanded its reach to invest in Turkey, Jordan and North Africa.

The bank added on Thursday that many Turkish agriculture workers were being forced out of work by the migrant crisis.

"Recent analysis of Turkey's labour markets finds that the inflow of refugees, who overwhelmingly do not have work permits, results in a displacement of informal, low-educated, mostly female Turkish workers, primarily in agriculture," it said.

In Jordan - which has been hardest hit by the migrant crisis - the EBRD lowered its economic growth forecast for this year to 2.8 per cent, from 3.6 per cent previously.

The lender added that several south-east European nations faced a significant impact from the large numbers of refugees crossing their territories for western Europe.

"More than 145,000 migrants, mainly of Syrian origin, are estimated to have passed through Serbia since January 2015, a tenfold increase on the number in 2014," it noted. "This has posed logistical and fiscal challenges to governments that have provided medical and social care, food, water, and accommodation."

The EBRD, meanwhile, held its economic growth forecasts for its investment zone at 0.2 per cent and 1.6 per cent for this year and next year respectively.

The bank's investment zone spans central and eastern Europe, southern and eastern Mediterranean nations, as well as Russia, central Asia and the Middle East.


A version of this article appeared in the print edition of The Straits Times on November 07, 2015, with the headline 'Crisis 'puts heavy strain on some front-line countries''. Print Edition | Subscribe