David Miliband: How we can keep the globalization bargain
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David Miliband: How we can keep the globalization bargain

David Miliband, head of the International Rescue Committee, and Jim Cowles, CEO for EMEA at Citi, discuss exclusively with Euromoney how finance can help the refugee crisis at the launch of an initiative.

Jim Cowles (left), CEO for EMEA at Citi, and David Miliband, head of the
International Rescue Committee

What is different about the partnership that Citi and IRC have formed and, perhaps most importantly, what will be different about the impact it has?

Jim Cowles, Citi: When you look across many parts of Europe, the Middle East and Africa, one of the big things we are focused on is youth unemployment. When you have high levels of youth unemployment, you run the fundamental risk of not having a stable society, tearing at the fabric of communities.

The Citi Foundation’s Pathways to Progress initiative helps young people to gain employment and entrepreneurial skills. We reinvigorated that programme in February this year with a new $100 million funding commitment, aiming to reach 500,000 young people globally. 

Today there are millions of displaced people, more and more of them ending up in urban centres, who need to support themselves and their families. The initiative we’ve launched with IRC is aimed at these young people – 1,000 people across three cities – teaching them the skills that will enable them to build their skills, provide for themselves, start businesses and contribute to their local economies. The first phase is training, but after that they’ll be able to apply for a grant to help start a business. 

David Miliband, IRC: We’re a humanitarian agency committed not just to keeping people alive but changing their lives. It’s not about survival, it’s about helping people to thrive. What’s also different is that these people are not in camps – they are in urban areas. This is not just an investment in people, it’s saying that we’re going to invest in them as business people, who become contributors to society. 

And what’s really important – we are not taking on the easy cases here. Yola in northeastern Nigeria is not an obvious place to say you can go and make a difference. In Amman in Jordan there is a real difference between refugees’ demand for labour and the opportunities offered by employers. The risk appetite that’s being shown here is very exciting. 

Has IRC partnered with a bank before?

Miliband: We’ve partnered with Citi before on issues such as refugee resettlement in the US. I’ve not seen a three-country programme like this with the focus on business creation. We’ve tried to learn from Citi’s knowledge and experience, combined with some of the more micro-level work we have done around the world.

So the message here is that it’s about investment and finance, not just aid?

Miliband: Yes, that’s a good way of putting it. It’s also about this critical age group.

Cowles: I think that’s right. The money is coming from the Citi Foundation, but we look at this as investment. Our people in the Citi Foundation do a very thorough job on due diligence of the projects and then setting up with the metrics and criteria to judge the impact of the investment. And we do that to hold ourselves accountable but also so that we learn how to make future programmes more effective. 

Is there a quantifiable multiplier effect? Obviously for the 1,000 people targeted here, the impact could be dramatic, but in truth it does not really touch the sides of the scale of the problem.

Cowles: It’s 1,000 people across three cities. The multiplier effect takes place in several ways. Hopefully when someone starts a business it does not just remain a sole proprietor operation, they soon start to employ further people. Also we have to see how the programme takes hold: can we expand it in those cities or can we export it to new locations? And, of course, hopefully it’s successful and IRC can go to other sponsors and say: ‘This is what we did with Citi, we’d like to do another programme elsewhere with you.’

Miliband: The truth is this is very innovative, and so as yet there is not much data. What we know is that there’s good experience of sponsoring businesses on a micro level. Secondly, some of the multiplier is not the obvious one of economic return. 

To give you an example, we run a programme in Kampala, the capital of Uganda, for refugees, which I recently visited. I met a woman who set up the banana-ripening business there – she puts the bananas in a shed to ripen them. We gave her a loan to rent the shed. She then sells the bananas for a 50% mark up. You can do the maths on that. What you can’t do the maths on so easily is the daughter I met whose school fees were paid, who then goes to Kampala University to study health and public administration. She then wants to go back to South Sudan eventually to help rebuild her own country. 

That’s the sort of incalculable element of this that does take a leap of imagination and makes it appropriate that it’s a foundation that is willing to step in. And it does make sense at a time when more and more people are being displaced by conflict, when there is growing evidence on how humanitarian neglect can produce political and economic instability. We like the language of ‘investment’ – it’s not just charity.


Cowles: It’s also important that in these urban areas where refugees have been displaced, local people can see that they can contribute to the economy. It helps in terms of the overall acceptance of these people into their societies.

David, what’s your message to other banks about how they can get involved in helping the refugee crisis?

Miliband: The message is that for many of the countries that Euromoney readers would see as emerging or growth markets, we see for different reasons as humanitarian emergencies. These two worlds need to come together. So Nigeria is an exciting, developing economy, but it’s also the site of chronic humanitarian need. 

These fragile states are not going to be the growth engines of the future if we don’t attend to the humanitarian aspects. We can align our social and economic interests. We can use each other’s strengths. This programme could not exist without IRC’s roots in local communities and without the expertise and the finance that Citi offers. We need others to join us in recognizing that with heart, but also with head, this is a smart kind of investment to make. 

How do you take that approach further? Are humanitarian or refugee bonds one solution?

Miliband: Well, the classic social bond is that you pay money for education of prisoners so that you save money in the long run because they do not reoffend. It’s harder to do that in the case of political emergencies, because it’s not clear who or what you are saving down the track. 

We’ve explored the idea of disaster bonds, humanitarian bonds – no one has cracked it yet. And for many of the countries hosting refugees, there have been big economic consequences. In Jordan, their debt-to-GDP has risen from around 50% to 90% as a result. Telling them there is more debt on the way is not the first thing they want to grab for. 

So you would see these as short-term solutions?

Miliband: There’s a fiction that needs to be addressed. The fiction is that the refugees are only there for a short time. That’s convenient for the hosting states, frankly. It’s difficult, for example in the case of Jordan, to say these 1 million people are here for the long term. It’s also convenient for donor countries to tell taxpayers that their contributions are short-term aid. 

We’re saying you have to end the fiction. We’re an international aid organization with a $730 million budget. We’re running 500 different government grants. So the average grant is small and short-term. We need to have a longer-term perspective.

Jim, is it hard, as a bank, to switch your own approach from short- to long-term in this area?

Cowles: The things we do through the Citi Foundation – and this is certainly a prime example of it – are where we’re trying to make a difference in the long term; grants and training are part of it. Often you see microfinance initiatives, but they are typically targeted to indigenous people working in that area. That’s great, and we have programmes like that which have been very successful. 

In the past, the refugee crisis has been looked at as a temporary situation. There’s no indication, as David says, that this is a short-term phenomenon, and we have to change our approach to plan for the future.

Miliband: Let’s be honest, there has been reticence on the business side because this is seen as riskier than conventional CSR [corporate social responsibility]. There’s been reluctance on the humanitarian side too.

Both of our organizations, through a programme such as this, are saying: ‘Shed your inhibitions’. There’s a massive problem here, it’s a source of economic woe and instability. We all have assets to bring. 

And there are people who, if we are not careful, are going to waste their lives waiting for hand-outs. 

For goodness sake, we’re six years into the Syria crisis and we are still in the situation where Jordan has allocated 60,000 work permits – and that’s been a huge struggle, in part because they don’t believe they have received sufficient international support to do it. We want to help them break out of that.

As you said, some countries might want to maintain the fiction that the crisis is short-term to assuage concerns among the indigenous populations. Can a programme like this show that refugees can be a boost to rather than a drain on their economies?

Miliband: We’ve got to show that. There are bigger players than us that have got to move. The World Bank, for example, has moved a long way in this direction. For a country like Jordan, we need to be putting an offer on the table that says you need a different kind of macroeconomic offer but you also need a different set of microeconomic interventions. The Greek situation is different, but you still have 44,000 people stuck in Greece. 


In Yola, you have a traumatized community as a result of living under Boko Haram for two years. The concept that displaced people can actually be positive economic multipliers is one of the most powerful messages in moving this forward. If you end up with a tug of war between host and refugee populations, then you’ve really got problems.

Cowles: You need to look at many countries in western Europe too, and how they can integrate refugees into their societies. It’s not going to be easy if they don’t integrate into the labour force. 

David, it seems curious that your first partner in this is an international bank rather than one of the many, good local banks in Nigeria, Jordan and Greece. Surely those local banks need to be part of the longer-term solution?

Miliband: Definitely. To be fair, Citi has this excellent track record of trying to help integrate refugees into the US. So there is some real expertise there. Of course some of the local banks are doing things at a branch level and we work with them. But for an international bank, there are fewer local or political considerations, which can make life a little easier.

Cowles: Part of this is that we are the most global bank, in over 100 countries. So when we look at the Citi Foundation, we think: ‘Where can we help?’ In any place we do business, one of our core constituencies is the local community. You have to make investments there. Pathways to Progress is in a number of cities in the US and around the world. For us this partnership is about training young people to build businesses and helping to deal with inequality. 

Miliband: It’s too easy to say these problems are insoluble. We’re trying to break that culture of cynicism. If we can do that, we will set an example and hopefully inspire – or even shame – others to do more.

Is this programme and others like it a reminder 10 years after the financial crisis that banks can be a force for good?

Miliband: The most important thing banks should be is a good steward of their customers and their deposits. The after-effects of the financial crisis are still being felt politically as well as economically. But there’s a really important discussion to be had about whether banks, and businesses more generally, are part of the society in which they operate or not. And the second question is whether the society and economy they are part of is a local one or a global one. 

It seems to me imperative that at a time when global political leadership is in retreat, it’s not just the NGOs that are being pushed into the front line. There are growing parts of the private sector that are ready to say you can’t have just a global economy, you need global responsibility as well. 

That’s the only way we are going to be able to keep the globalization bargain: if people across the spectrum are prepared to come together to tackle the forces of instability, of which the refugee humanitarian crisis is a major one. 

Cowles: We’re big believers in globalization. We think it can be a real source for good for the global economy. Alongside that, there’s more that global companies can and should do to contribute towards that

I should also say that initiatives like this are a real benefit for our people on the ground in these countries, because they will contribute, they will volunteer. They’ll be mentors, they’ll be coaches. And for them to be able to do that in their local communities is a great opportunity for them, and makes them proud to work for Citi. They want to work for a company that mirrors their own values. That’s a huge benefit.


Can banks bridge humanitarian needs and the demands of investors?

A tie-up between a leading global bank and an innovative humanitarian agency could provide a template for long-term solutions to the refugee crisis. But why won’t more NGOs work with private-sector financial institutions?

By Helen Avery

In October, Citi and the International Rescue Committee (IRC) announced a new initiative to help young refugees in Greece, Jordan and Nigeria create or find work. 

Citi, through its foundation’s Pathways to Progress programme, will provide a $2 million grant for a two-year project with the IRC to bring business training and start-up grants to 1,000 people between the ages of 16 and 24 years in the three countries. By choosing three very different countries, it is hoped the project will also provide some comparative data on the initiative’s impact. 

While 1,000 jobs may seem like a drop in an ocean of 22.5 million refugees worldwide, the grant marks the first partnership of its kind to focus on jobs for refugees and supports the notion that a relationship between the finance sector and humanitarian organizations can go beyond basic cheque-writing. 

Citi will be providing its expertise in working with refugee communities in the US, as well as its long experience in microfinance. Echoing this unlikely relationship, the International Committee of the Red Cross announced in September its first humanitarian financing transaction, partnering with Lombard Odier and La Caixa Foundation, as well as several European governments. 

According to David Miliband, chairman of the IRC and the former UK foreign secretary, these kinds of partnerships for humanitarian causes between the private and public sector are essential. 

“Now that the US is determined to reduce the number of refugees it accepts, in addition to its current stance on immigration, we have to collectively offer even more support,” he says. “We can’t help stop the wars, but perhaps there are practical, focused private partnerships that can make a difference.” 

There is also donor fatigue around prolonged catastrophes such as the refugee crisis (although Miliband says the IRC has not seen a decrease in its funding). 


The global refugee crisis is particularly complex. There is demand for traditional, immediate aid in the form of food, water, shelter and medical care, as well as a need for new solutions to cope with the open-ended commitments to those in need. 

There are more than 65 million displaced people around the world, according the United Nations, and the average time a refugee has been away from their home country is now around 10 years – that soars to 21 years once they have been displaced more than five years. What is needed for both the refugees and the countries that host them such as Greece, Nigeria and Jordan, is the creation of jobs and the bolstering of the local economy. 

Host countries, overwhelmed by the sudden expansion in their populations, face rising unemployment among their own citizens, which can lead to unrest – particularly because it is youth unemployment that grows most quickly within host countries and refugee communities. Jordan’s unemployment rate is 18.4% for example and above 30% among those aged 16 to 24. 

While Jordan may be stable despite the challenges of 1.4 million new residents, Miliband points out that its position as one of the few stable countries in the Middle East makes it in the global interest to support Jordanians and the refugee population there. Likewise, in a world that is evermore interlinked, supporting Greece and Nigeria is of benefit to all.

It may seem like a crisis too large to be solved, but Miliband says it is not the case: “The money is there, we just need to put it to work in the right way.” 

The world’s financial services companies are well-placed to help. They can provide expertise in micro-lending, the creation of impact funds and the development of innovative financial structures that can, in part, alleviate the pressure on host countries and allow displaced populations to feel more settled and secure. 

However, there is still some hesitancy by the NGO sector to work with the private sector. 

The idea of ‘investments’ rather than ‘donations’ is a difficult pill to swallow for many in the public sector, but smart capital that by its very nature seeks a return – monetary or otherwise – is desperately needed. 

In the case of Citi’s partnership with the IRC, the grant is purely philanthropic, but its strategy of providing people with jobs is outside the norm of how humanitarian agencies are perceived to work. Surely money should only go to the most desperate through food, shelter and healthcare? 

Miliband says there is room and need for both, adding that “humanitarian groups shouldn’t be ashamed of talking about wealth creation or economic growth.” 

At the same time, this idea of investment in solutions carries with it a greater accountability than donation, which may encourage humanitarian organizations to become leaner and more efficient

One former UNHCR worker says that donations to stranded refugees in Greece totalled more than $14,000 a head on average – yet a lack of long-term planning has meant that very little has made it into the economy or been put to long-term use by and for refugees. 

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