The World Bank has become a prominent player in forced displacement response. The Bank could strengthen its contribution further through better coordination with humanitarian agencies and more meaningful refugee participation.

In recent years, the World Bank has modelled a way for development banks to engage in forced displacement settings. It has provided financing tools to support host countries and fostered the inclusion of refugees in national systems. In so doing, the World Bank is inserting a medium to long-term development perspective that acknowledges the contributions of refugees to their host communities and fosters policy reforms that support their inclusion. While the institution is still learning to navigate the refugee space, it is also reshaping the very nature of the refugee response system.

Without a doubt, the role of the World Bank in the forced displacement ecosystem will continue to grow. However, its engagement is still relatively new, and there are many challenges to ensuring that its investments have a tangible impact on the lives of refugees and their hosts. The World Bank needs to ensure that its investments not only align with the needs on the ground but also reduce the need for humanitarian support. In particular, the World Bank must foster the meaningful inclusion of refugees in its development programming to ensure that its projects more accurately respond to the needs of refugees.

How does the World Bank support refugees?

The World Bank’s main mechanism for supporting refugees is the Window for Host Communities and Refugees (WHR). The WHR aims to strengthen the host country’s capacity to address refugee crises and promote the inclusion of refugees in country systems. The World Bank established the Window in 2017, renewing its financial support every three years. Its financing is concessional – including grant components, below-market-rate loans and other beneficial financing terms. In the current 2022-2025 cycle, the WHR can invest up to USD 2.4 billion to low-income nations that host large numbers of refugees. All the WHR’s investments since its inception are currently worth more than USD 4.6 billion, benefitting seventeen refugee-hosting countries.

For its implementation, the World Bank works directly with host governments to identify development needs and priority areas for investment. While the World Bank negotiates with borrowing countries around the investments, ultimately the borrowing country determines and carries out the projects. Some investments focus on infrastructure and capacity building. For instance, the WHR funds a USD 40 million project in Cameroon for community-based development to improve socio-economic infrastructure and services for refugees and hosts. Other projects focus on opening up job opportunities and increasing the capacity of social security systems and education to include refugees.

The WHR links its financial assistance to the creation of policies that support the inclusion of refugees. To measure impact, the WHR committed to implementing significant policy reforms in at least 60% of the benefitting countries. Several countries have already implemented important reforms because of the WHR. In Ethiopia, the WHR helped refugees access work by funding the Ethiopia Economic Opportunities Program. In Liberia, the WHR supported regularisation efforts for refugees without status. In order to track refugee policies in benefitting countries, the World Bank has established an assessment tool called the Refugee Policy Review Framework (RPRF).

For those nations at high risk of debt distress, the WHR provides full grant financing. Currently, the Republic of Congo (Congo-Brazzaville) is the only WHR beneficiary in debt distress, however, more than 47% of the beneficiaries are at high risk of becoming debt distressed (according to the World Bank’s Debt Sustainability Analysis). For other countries, WHR financing often includes loan components. Some countries hosting large numbers of refugees decline WHR financing because they perceive the financing terms as unfavourable. In particular, some nations might perceive that obtaining a loan to support the refugee population is not in their best interest – although the host population also benefits from the financing.

How could the World Bank’s refugee support be improved?

There are challenges the World Bank needs to address to be more effective at responding to refugees’ needs; these include improving coordination between World Bank investments and humanitarian work, and managing relationships with governments (the clients). Borrowing nations, as the main decision-makers, might not always prioritise investments in projects that align with the needs on the ground. Plus, the World Bank struggles to mainstream the refugee agenda across in-country operations and teams. In some countries, national staff have limited understanding of, or interest in, refugee issues, which affects the development of projects.

Another important challenge for the World Bank is around protection issues. The World Bank is not a rights-based organisation, as such, the institution partners with UNHCR to assess whether potential beneficiary countries have adequate refugee protection frameworks prior to eligibility. However, some WHR-beneficiary states, such as Bangladesh and Pakistan, have a long history of violations against refugee rights, which calls into question the adequacy of the protection assessments and the Bank’s role in holding states accountable in relation to refugee rights.

Furthermore, the country-based model of the World Bank can create a mismatch of interests when it comes to refugees. As foreigners, refugees’ interests are seldom represented by host governments.^[1] Refugees do not have the right to participate in the host countries’ political processes and influence governments’ decisions. Therefore, when it comes to WHR financing, the negotiations between the World Bank and borrowing countries risk obscuring refugee voices. For instance, in Bangladesh, the government refuses to implement sustainable approaches to prolonged displacement.^[2] Consequently, the response in Bangladesh has focused on emergency support, restricting refugees’ ability to move freely, work, access services, and more. Although the Bangladeshi government’s priorities contradict the WHR’s goals, they influence its investments and limit its effectiveness.

In some cases, like Kenya, where the WHR supported the implementation of the Refugee Act 2021 that grants refugees right to work, to property, and public services, the WHR investments have made a real difference in the refugee response. However, in many other countries, investments might have an indirect or even marginal impact imperceivable to refugees and those working directly in the response.^[3] To ensure that all WHR projects have a clear, tangible and measurable impact on refugees and their hosts, the World Bank needs to increase its collaboration, coordination and dialogue with both refugees and humanitarian actors.

The need for meaningful refugee participation

If the World Bank is to influence forced displacement response, it needs to ensure that refugees are included from the start and that they become active participants in the way the institution sets its priorities and investments in the refugee space. Refugees understand their problems better than anyone and they know what priorities are important to them. Refugees can also raise the alarm when projects are not being correctly implemented, and can help ensure that any assessment accurately reflects the realities on the ground. Overall, refugees can help improve the accountability and effectiveness of the WHR investments.

Failing to engage refugees in the design and implementation of projects and programmes that affect them can lead to initiatives that are not aligned with their needs and realities. Such is the case of the Jordan Compact, which did not integrate refugee perspectives early on, resulting in a delayed impact on their lives.^[4]

There has been some progress over the past year. The World Bank has conducted ad-hoc conversations with refugees and refugee-led organisations at a global level. At a country level, in Uganda, the World Bank invited refugee-led and civil-society organisations to give feedback on the Refugee Policy Review Framework (RPRF) report. Including RLOs helped highlight how some labour market policies did not translate into practice. While the Uganda experience has not been implemented across other WHR-benefitting nations, the case shows that including refugees is possible and impactful.

The way forward

It is clear that the World Bank has had a significant impact through the WHR. However, there is room to expand the impact of the window over time. While we cannot expect the World Bank to change its whole operational model to improve the WHR, there are a few things that the institution can do to improve its refugee response:

1. First, the World Bank must ensure that, in practice, WHR investments support countries with a proven track record of policy reforms to support refugee inclusion and protection – as indicated in its eligibility requirements. In particular, the WHR should focus its resources on projects that allow refugees to access national systems and become self-reliant, reducing the need for emergency humanitarian assistance. To achieve this, the World Bank can increase grant levels to nations with inclusive policies towards refugees, thus creating incentives for implementation. The World Bank can also establish a clear policy around protection issues to identify government actions that are clear violations of refugee rights and implement an action plan to keep those nations accountable.
2. Second, the World Bank must directly engage with refugee-led organisations in the generation of the RPRF and protection assessments. The World Bank should partner with local refugee-led organisations to provide inputs for the generation of the RPRF and any other in-country assessment. By doing so, these organisations can help provide a more well-rounded analysis of the refugee environment in the countries that the World Bank finances and sound the alarm on any protection issues.
3. Third, the World Bank must take a proactive approach to ensure more transparency and increased coordination with humanitarian and refugee actors – from access to public data on WHR projects to in-country periodic consultations across stakeholders involved in the refugee space. In particular, the World Bank must ensure that refugees and humanitarian and refugee-led organisations are included in stakeholder consultations to inform its WHR investment priorities. By actively reaching out and including humanitarian and refugee-led organisations in the stakeholder consultations, the World Bank can improve coordination with humanitarian actors and ensure that refugees’ voices are heard and reflected in the WHR investments.
4. Fourth, the World Bank should consider mainstreaming forced displacement issues across teams and practices, including expanding dedicated staff to oversee refugee investments and coordination with stakeholders at the country level. Currently, there are only two refugee coordinators across the World Bank. More forced displacement expertise is needed to ensure that the WHR is properly negotiated, planned and implemented. Furthermore, without refugee expertise, the World Bank country offices risk failing in any efforts to improve coordination with refugee-led and civil society organisations working on the refugee response.

As the world continues to experience complex displacement challenges with over 100 million people displaced, every effort geared towards supporting refugees should involve relevant stakeholders, including refugees. Now, more than ever, the work of the World Bank is key in responding to refugees’ needs and contributing to more sustainable long-term approaches.

 

Martha Guerrero Ble
Advocate, Refugees International
mguerrero@refugeesinternational.org
X: @MarthaGBle

Bahati Kanyamanza
Director, Global Partnerships, International Refugee Assistance Project; Co-founder, COBURWAS International Youth Organization to Transform Africa
bkanyamanza@refugeerights.org
X: @BKanyamanza 

 

^[1] See Kanyamanza B and Arnold-Fernández E (2022) ‘Meaningful representation starts at the top: refugees on UNHCR’s ExCom’ Forced Migration Review issue 70 www.fmreview.org/issue70/kanyamanza-arnoldfernandez/

^[2] See International Crisis Group (2023) ‘Rohingya Refugees in Bangladesh: Limiting the Damage of a Protracted Crisis’ bit.ly/Rohingya-protracted-crisis-report

^[3] For further reflections on the effectiveness of the WHR see Center for Global Development (2024) ‘Will the Window for Host Communities and Refugees Survive “SimplifIDA”?’ bit.ly/WHR-simplifida

^[4] ODI (2018) The Jordan Compact: lessons learnt and implications for future refugee compacts bit.ly/jordan-compact-lessons

 

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