 For those of you who know me, I'm going to do something very unusual. I never, never use PowerPoint. I speak the power of the words. Well, on this occasion, because I want to really pay tribute to our researchers and to our team, I'm going to use PowerPoint. And I hope that you're prepared for something which is going to be fairly technical, that some of you may find a bit dry given the emotion and the moral, humanitarian, cultural, and social aspects that the refugee crisis has taken, is taking, and probably will take. But we thought that the IMF, that it would be helpful to actually provide some economic data, some real information about one particular aspect, which is the economic integration, the economic contribution, and the economic cost of those particular migration. For me personally, it started about a year and a half ago when I visited the Zatahari camp in Jordan. And the woman you see on this photo, with whom I had a long discussion, had lost most of her family members and had left, obviously, her country, Syria. What I found most striking from the discussion we had is that although she had lost pretty much everybody, what she desperately wanted to do was to go back home. Yet there was no home. Everything had been destroyed. The second best thing for her was to be as close as possible to the land of her home, because she could feel it not far away. Now, unfortunately, the situation of this woman is becoming more and more common. People are being displaced at an unprecedented rate. And the surge in refugees is a challenge that is, from our perspective, much greater than we see. It's not only a problem in the Middle East, and in particular countries that we have in mind, it's also becoming a major issue in some of the Sub-Saharan African countries that are not much talked about. But what's happening in the north of Nigeria, for instance, with massive outflow of Nigerian people to neighbouring countries is also very difficult. It's also obviously a problem in Europe, and it has been dominating the news lately. Dealing with refugees, as I said, is a challenge in many parts of the world. It has also many dimensions. So today what I would like to do is focus on the economic dimension, which is our core expertise. Now, some people might wonder what the IMF has to do with refugee crisis. Well, it has a macroeconomic dimension to it. Let me start by placing the refugee surge in the context of overall migration. Cross-border migration has risen steadily over the last three decades, and has reached now 250 million people. Migrants are now 3% of the global population. Inflows of refugees are also up sharply, even though they are still only a small fraction of total migration. At the end of 2014, there was an estimated 14 million refugees, up 40% from 2011. And by mid-2015, only mid-2015, this total had grown by another million to about 15 million people. Of these refugees, about two-thirds are being displaced by widespread conflicts in the Middle East and North Africa. The fallout from the Syrian conflict is a stark example of these challenges. Out of 22 million living in Syria before the conflict started, some 7.6 million people are displaced within Syria, and an additional 4.6 million have fled to other countries as refugees. The vast majority of Syrian refugees have stayed in the region, mainly in Turkey, in Lebanon and in Jordan. For example, in Turkey, there are now more than 2 million refugees, and in absolute terms, it is the country with most refugees in the world. In Germany and Sweden, the inflow of refugees has grown rapidly. Still, the proportion of refugees in total population is well below that of Jordan and even more so, Lebanon. If you look at Jordan and Lebanon, refugees are now a significant share of the total population. Forget about the refugees for a second. These are countries in and of themselves with high unemployment, young population, stretched public resources, and for both of them, high debt. So if you look at that chart, you can tell that with such a surge of refugees and the current economic situation in those countries, it's a very difficult matter to handle. For example, in Lebanon, rents have gone up by more than 200%. Schools have to run two shifts to accommodate the inflow of Syrian young children. In Jordan, unemployment is up and higher rents are pushing up inflation. Class sizes have also grown and hospitals are overcrowded. And this is putting pressure on what I said was very limited fiscal resources. This is not in any way intended to criticize the camps that have been organized in Jordan. They are well-run. This is not in any way intended to criticize the hospitality of Lebanon, the Lebanese families and the relatives because Lebanon has a different policy vis-à-vis refugees and has not set up camps in the way Jordan did. But these are not places where refugees can actually thrive. They may have named one of the main avenues of these Atahari camps, the Champs-Élysées of Atahari. It's not a place where economic development is actually taking place on a scale that is satisfactory for them. And given the situation of those two countries in particular, financial support should go to them in the forms of grants. It's not often that the IMF actually calls for grants to be extended to countries. We are known for recommending loans, conditionalities. Now, certainly in the case of these two countries, grants are in the order. So let me now turn to Europe. Today we're publishing a new study. It will be out at 11 and available. And it's a study that we've been asked to put together by some of the European countries and which we thought was worthy of some analytical work and research by staff. This is the first piece of a stream of work we're conducting on the macroeconomic implications of refugee flows. This work will also cover the Middle East and other regions. The study builds on existing and extensive research on the economic effect of immigration in advanced countries. Now, refugees differ from migrants. And they differ in their characteristics, in their decisions making. And still, because we had to work with analogy, we had to work with comparative data that we have essentially on migrants more so than on refugees. But much can be learned from the challenges of today, from past experience with immigration waves. As we can see, Europe has seen large waves of asylum seekers in the past and you can really sort of understand the wise and the times. But the current wave is much larger. These numbers probably underestimate the true size of the surge because they reflect asylum applications, not arrivals of asylum seekers. In Germany, for instance, arrivals were more than twice the number of applications in 2015. From a narrow economic perspective, a key question is the ability of the refugees to actually integrate the labour market. When refugees obtain employment, they contribute to the economy, they reduce their dependence on public assistance and this can help gain acceptance in host countries. So what do we know about how refugees integrate into the labour market? We use European survey data to compare the employment rate of past immigrants coming from the sending countries of today with that of native workers. We find that within the first five years of their arrival, the employment rate of refugees is 20% lower than that of natives with the same characteristics, such as age, education, language skills. The gap is three times larger than that of other immigrants. However, as you can see, this gap narrows gradually over time. Other studies also show that immigrants earn less than native workers of similar characteristics. Here, too, the difference is narrow over time. Refugees are likely to integrate into the labour market as we can see from those studies, as we can see from other studies conducted concerning compensation. They integrate the labour market only slowly. And that reflects several barriers. There are legal barriers to labour market participation during the asylum process. Poor knowledge of the local language and limited transferability of job qualifications can also be hurdles. All these points to the importance of policies that can help refugees overcome barriers to the labour market. So what do we know about these policies and what has been actually used and put to good use in other countries? There are some excellent impact evaluation studies of policies in Northern Europe, countries relevant to the current refugee crisis. Among the various policies that we have evaluated, three were particularly effective. One, a policy of subsidies, which obviously is held if the fiscal situation of the country is healthy. In Denmark, for instance, wage subsidies to private sector employers were very effective. In Germany, a programme of subsidies for unemployed who start a business worked very well for immigrants. Second type of policies, training and skilled provision that helped immigrants in Germany and refugees in Denmark. Third policy, access to work at temporary agencies was a stepping stone to regular employment for immigrants in the Netherlands, in Sweden and in Denmark. So subsidies, training and skill provision, access to work at temporary agencies. There is also evidence that immigrants do better in countries where labour and product markets are more flexible. And from this perspective, EU countries may not provide the best prospects for refugees. There may be a need to reconsider some institutional features, though this is always politically difficult. To have a labour market and a product market with less barriers to entry, with more flexibility is something that certainly we have advocated in and of itself, because it is conducive to better access to the job market. But certainly in the case of refugees, it would be a catalyst. I should also mention that, understandably, native workers are often concerned that immigration will lower wages and increase unemployment. They will take my job. They will lower my pay. Past experience, however, indicates that these adverse effects tend to be limited and tend to be temporary. Ultimately, how will the surge of refugee effect growth in the EU is the question. In the short term, the additional fiscal expenditure to provide for the refugees will boost aggregate demand and GDP growth. So it's a plus for the economy from that perspective. In the medium and long run, the impact on growth will depend on how fast the refugees enter the labour market. So here we consider an optimistic scenario and a more pessimistic one, in which labour integration proceeds more slowly. This means that the unemployment gap is twice as large as that of the first scenario. In the optimistic scenario, we find that the impact on the EU output level in the short and medium term is positive, but small overall. The medium term increase in GDP is about 0.2 percentage point. So when you have growth, which is forecast at say 1.5%, adding 0.2% is not ridiculous. It's an increase of more than 10%. However, for the major receiving countries, the impact is going to be larger because you have a vast difference between the rate of acceptance of refugees in, say, Sweden and Germany, for instance, from that of Latvia or Poland. So for the major receiving countries, the impact is large. Up to 0.5% for Germany, for example, 0.5%. That was the optimistic scenario. In the pessimistic scenario, with low integration, growth is a little lower compared to the previous one. But importantly, government debt and unemployment are much higher. So let me summarize the key takeaways. Current surge in refugees is a challenge with an upside economic potential. Refugees are entrepreneurs, teachers, engineers and workers of all types. With appropriate policies, this rich source of human capital can be harnessed to the benefit of everyone. They're not only doctors, lawyers and teachers. They also come from different backgrounds. Some of them with immediately available skills. Others totally unadjusted and requiring significant adjustment to the labor market that they eventually enter. All of that in our view will require international cooperation. In our view, this is a time for a major international initiative. And certainly from our part at the IMF, we will try to contribute as much as we can and possibly initiate some of those internationally driven projects, which should involve the United Nations and its many agencies dealing with refugees and migrations. Which should involve the receiving countries, if you will, that are already assessing how much it will cost to integrate refugees, and which might well think about using some of those resources to helping with development at the country of source when that is possible. And once the military and defence operations and the peacekeeping operations will have settled the ground so that economic action can actually be taken. But we certainly see it from our perspective, and I personally see it as an imperative that has to be a very holistic approach, which ranges from the peacekeeping operation to the development, including aid, and certainly for those countries that are nearby, significant support in the form of grant. In Europe, it also means a much broader and collective approach that cannot be on a piecemeal basis and driven by national governments. And as the European authorities have called for, a European approach is needed in order to have an effective integration that will certainly, from an economic perspective, include higher budgets. Now, I started with my visit to the Zatari camp, and I would like to leave you with another picture, this young girl. Just to remind us that it is a global challenge, it's one that requires solidarity, it's one that requires that holistic approach. And certainly from our perspective at the IMF, we will continue to conduct the analytical work, and we will wherever we can, and we do have programs in place with countries like Jordan, for instance, and a few of the sub-Saharan northern African countries. We are trying to take steps and we are trying to accommodate the fiscal framework in which they have to improve their situation in order to try to deal with the refugees' integration. Thank you very much.