<mark>reminding people that Albert Einstein was a refugee to campaigns calling on governments to allow refugees to work (Crawly 2017). Indeed, research on Syrian refugees who arrived in Europe from 2015 onwards by Aiyar et al. (2016) shows how their arrival led t</mark> o modest increases in GDP growth in the short run. This growth, however, was mostly due to additional fiscal spending. The impact on medium and longterm growth is found to depend on how refugees are integrated in the labor market.

There are lessons to be learned from this European experience for Chad. Like in Europe it is plausible that the arrival of many new refugees and the associated inflows of donor resources increase economic growth in the short run. The long run impact is more uncertain, however, and depends on policy choices on how to treat refugees.<sup>3</sup> Considering refugees less as passive recipients of aid, and more as untapped resources that can economically contribute brings self-evident advantages. After all, refugee labor, skills and ingenuity are a resource which is better to be tapped than allowed to go to waste. It is preferable not to spend fiscal resources on food assistance and shelter when this can be avoided by allowing refugees to fend for themselves.

Participation of refugees in the economy reduces the need for humanitarian assistance but creates frictions too. Particularly when refugees compete for scarce resources such as food, land or jobs, decision makers may be hesitant to promote the economic participation of refugees.<sup>4</sup> Frictions arise when there is a zero-sum situation, meaning that more for one party implies less for the other. Such tensions are more likely when the refugee population is clustered in a small geographic area with limited resources and opportunities available. They also arise when there are winners, such as employers who profit from the supply of cheap labor and increase in demand, and losers such as unskilled labor which now has to compete with refugees for jobs. But economies are not zero-sum environments, especially not in the long run, and with the right policies the new human resources will add to the economy.

This is not to deny that when the economy adjusts to the shock of the arrival of many refugees, or when certain sub-populations are negatively affected, flashpoints arise which can easily lead to social tensions and possibly even undermine support for inclusive refugee hosting policies. Indeed, high food prices have been reported as among the main welfare shocks hosts and refugees face in Chad (World Bank 2021) and increased demand for food from newly arrived refugees poses a welfare risk to net buyers of food – typically the poorer households. But with the right policy response --World Bank (2021) proposes a gradual shift from in-kind food assistance to cash assistance -- greater local demand for food will stimulate agricultural production, enrich local farmers and thicken the market for food. Additional land can be brought under cultivation; new jobs can be created.

3 Analysis by Engler et al. (2023) of refugee flows into emerging and developing countries, by contrast, does not find evidence of positive economic growth effects on the host country. While migrant labor to advanced economies features important complementarities with that of the native-born population (Alesina, Harnoss and Rapoport, 2016), refugees are typically different from “economic” migrants as they have little time or opportunity to best select their destination country. Their choice to migrate is driven by factors such as the risk of physical harm and vulnerability to persecution (Brell, Dustmann, and Preston 2020). When the match is strong and migrants’ skills and attributes meet the needs of their destination country, the benefits can be significant (World Bank 2023). When this is not the case, the benefits disappear as Engler and colleagues suggest.

4 The economic impact of refugee presence is often intertwined with the impact that the conflict in the country of origin is having on host communities by disrupting the country's supply chain and the flows of remittances, as is currently the case in Eastern Chad, which can exacerbate resentment towards refugees.

4