Report of the World Commission on Forced Displacement



Proposes a New Investment Vehicle, A Merchant Bank
To Generate Employment in Poorer Countries, in Locations
of The Forcibly Displaced;
And to Stabilize At-Risk Populations

Brussels, December 7, 2018

Jean-Claude Juncker, President of the European Commission, received the Report of the World Commission on Forced Displacement from Heinz Fischer, the Commission Chairman and former President of Austria, and Joel Bell, Chairman of the Chumir Foundation for Ethics in Leadership. It proposes a new institution, a ‘Merchant Bank’, to de-risk investments in lower income countries.

In presenting the report President Fischer said, “We must take concerted action to provide economic opportunity for forcibly displaced populations and to reestablish stability, cohesiveness and economic sustainability of communities where they are located. We must address the many more who will be displaced if they cannot live reasonable lives at home. We recommend a variety of policies, including the international sharing of the responsibility, policies that create jobs and attention to all those forced to flee from their homes.” he added

The World Commission recommends the creation of a Merchant Bank, for a role distinguished from, and a complement to, existing development financing institutions (DFIs). Existing DFIs were established largely to add financing capacity for governments and private ventures in developing locations. They are naturally less proactive in searching-out, assessing feasibility, developing and de-risking ventures. They naturally gravitate to the most promising and less risky projects and locations, but produce fewer undertakings than needed.

The Merchant Bank, by distinction, would be mandated, as necessary for the realization of sustainable commercial investments in the designated locations, to proactively identify, initiate and organize the actual ventures. It would assess, tailor and undertake arrangements for the absorption of risk that is beyond commercial tolerance – including risk associated with intensified search for projects, early stage and start-up activity. De-risking would be reasonable and on fair risk/reward terms in the public interest. Its mission would be to resolve impediments to project implementation. It would, in this way, fulfill its mandate to strategically deploy limited public resources to attract private sector capital for investment. The private sector is where operating capacities and capital resources exist for the cumulative investment required to gainfully employ a meaningful number of people displaced or poised to move. It would pursue infrastructure projects and ventures that suited economic conditions in designated locations with projects, large and small – making arrangements by individual project, sector or community wide application.

The Merchant Bank would be funded by governments and/or philanthropies to permit non-profit activities; tolerate higher risks than typically taken by current DFIs; and, it would be staffed to both assess and mobilize ventures, being flexible to address unexpected impediments discovered during project design. The de-risking undertakings of the Merchant Bank can be contractually conditional on a private sector commercial capital commitment and would normally require a limited amount of the total funds for any particular project, with the private sector investors providing the rest.

Excess savings, currently earning low to negative yields in the developed world, would make the additional investments achieved by the Merchant Bank productive for commercial capital. It would generate more activity, employment opportunities, as well as enhanced economic growth, both locally and globally, to benefit donor countries, investors, host communities and the displaced.

Chumir Foundation Chairman, Joel Bell, stated, “We must look to private sector investors and business operators to generate the scale of employment opportunities necessary for the displaced and host community residents. Governments should strategically use their limited capacities to create conditions that make commercial investment attractive - and businesses should provide the larger amounts to build and operate the undertakings. Even private sector capital gathered for this purpose is currently not deployed in the absence of the Merchant Bank techniques.”

President Juncker added, “We, in the European Commission, are very mindful of the importance of creating jobs that make reasonable living possible for residents of the poorer areas of the world. We recognize the challenges in many of those markets and are interested in constructive ideas for stimulating business investment in such locations. A serious and experienced group of people have devoted considerable time and have brought forward constructive ideas.”

There are 68.5 million forcibly displaced people in the world and many millions more poised to leave their homes in search of safety, security, and reasonable living conditions. The World Commission, a global group of experienced policy and political figures, with the advice of an international Steering Committee of experts and practitioners, spent the last two years considering forced displacement, and seeking answers for the underlying issues of: idled populations; lost production; dependency and impoverished people and communities, and how to attack these growing challenges in effective ways.

To read in more detail the Report of the World Commission on Forced Displacement, please follow the links below.

At a Glance

Executive Summary

The Report

Merchant Bank Proposal