Making GCFF Financing a Win for Venezuelans and Their Colombian Hosts

January 28, 2019


As dueling claims to the Venezuela’s presidency threaten to spark further violence and devastating economic and social turmoil accelerates, the exodus of Venezuelan migrants continues. Absent a negotiated solution that currently seems out of reach, it’s likely that the migrant and refugee crisis will get worse before it gets better. Brooking’s Dany Bahar and Douglas Barrios estimate that the number of Venezuelans fleeing the country could grow from today’s three million to reach a total of more than 8.2 million. Colombia hosts the greatest number of Venezuelan refugees and migrants, at approximately one million. While Colombia’s reception has been relatively welcoming and pragmatic—making more than 880,000 Venezuelans eligible for temporary residence and work permits—inevitable cracks are starting to show. In a recent survey of Venezuelans in the Colombian border town of Cúcuta, the International Rescue Committee (IRC) found that 91 percent said finding a job was the reason they initially came to Colombia; 80 percent said their top need was food. Strained local services, such as overwhelmed health systems, affect both the displaced and the host community.

In a context of increasing pressure and the possibility of larger inflows, the World Bank recently announced that Colombia is now the third country to be eligible for the Global Concessional Financing Facility (GCFF)—a partnership among the World Bank, United Nations, Islamic Development Bank, and others. The GCFF, which is hosted by the World Bank, offers highly concessional financing to middle-income countries hosting significant numbers of refugees. The GCFF and the World Bank’s similar fund for low-income countries hosting refugees (the IDA18 refugee sub-window) are unique in providing multi-year funding through host government systems to meet the needs of refugees and hosts. This is especially important as increasing numbers of refugees are living in urban areas, rather than camps.

This announcement is welcome news. Experience shows that a key to an effective and sustainable response is increasing access to quality services for both refugees and hosts. Like other countries hosting large numbers of refugees such as Jordan and Bangladesh, Colombia will require significant financial and other support to respond to existing and future needs. Greater investments in local service delivery and  capacity are needed now, especially given the possibility of significant new inflows of Venezuelans.

But financing is just the first step. It’s critical to learn lessons from past experience and ensure that policies are in place so that financing yields results and promotes self-reliance. Colombia has already taken proactive steps that show it is planning for the longer term. In November 2018, the Colombian National Council on Economic and Social Policy (CONPES) created an interagency plan for responding to the crisis. Their recommendations include increasing vocational training for Venezuelans and returning Colombians, strengthening health and education systems, implementing programs to reduce xenophobia and social tensions, and supporting integration into labor markets (including by facilitating geographic distribution to better match refugee and migrant skills with economic  opportunities). Such positive measures should be supported by the international community.

As the Colombian government and World Bank develop GCFF programs, they should focus on these key actions:

1. Identify shared outcomes at the outset.

The multitude of needs means it can be hard to focus on a few key outcomes and relentlessly pursue them. In Colombia, GCFF financing should focus on a limited number of sectors requiring longer-term funding and with medium-term needs, such as education and livelihoods. Within these sectors, there should be clearly defined outcomes for Venezuelans and host communities. Coordination within the humanitarian sector is notoriously challenging—and adding development actors to the mix means more organizations and priorities to align. By bringing its financing, expertise, and networks to the table, the World Bank can play an important convening role and support the government in setting targets and aligning stakeholders around shared targets from the start.

2. Increase incentives and momentum for strengthening local systems and infrastructure.

One of the features of the GCFF is that funds are channeled through the host government, unlike most humanitarian funds that are deployed through a parallel system of services in camps or settlements. In Colombia, most Venezuelans are living among host communities, in urban areas or settlements close to the border (where they receive relief services and access public services). Supporting local systems is critical as hospitals, clinics, schools, and job placement centers work with increased numbers of people, and water, road, and other infrastructure is used at higher rates. Doing so can not only help avoid inefficient resource allocation, it can also mitigate risks associated with parallel systems (for example, when staff are hired away from public service providers to work for NGOs). Beyond supporting host country systems directly with financing, the GCFF in Colombia can also incentivize investment in local systems and facilitate greater complementarity between public service providers and humanitarian actors. It can do so by designing and setting up programs that bilateral and other multilateral actors can channel funds through and increasing planning and coordination capacity (e.g., integrated referral systems).

3. Prioritize policy gaps and opportunities.

The GCFF has so far deployed financing in Jordan and Lebanon. Our research with the IRC examined the successes and lessons learned from its initial programming. A key lesson is the need to focus on policy changes that are “binding constraints” to progress from an on-the-ground, practical perspective. For example, the 2016 Jordan Compact started with a focus on granting work permits so refugees could work at factories in designated special economic zones (SEZs). However, the SEZs are located far from where most Syrian refugees live, and many factories require workers to live on-site or remain for extended periods of time. Refugees were not often willing or able to leave their families, while some found that they could earn more in the informal market. Female refugees also reported harassment or a general lack of feeling safe at some factories in SEZs. A closer look at the key barriers to livelihoods may have led to a more immediate focus on other policy changes that would enable refugees to find decent work, such as the regulation to allow Syrians to register home-based businesses (which was recently passed, and could be a game-changer for women who cannot or prefer not to commute to work) or greater freedom of movement. This level of detail and insight into the main challenges that migrants and refugees, as well as vulnerable Colombians, face is precisely what will be required to prioritize policy changes that enable GCFF programs to succeed.

4. Engage Venezuelans and Colombian hosts early and often.

As the above suggests, many of the key constraints to improved well-being are known to Venezuelan migrants and refugees and their hosts. It is a mantra in development and humanitarian response to include affected populations in programming, but it still happens too rarely. With IRC, CGD has recommended that robust consultative processes be required in all GCFF countries, and sketched out a possible governance mechanism that would be led by the host government and include line ministries, businesses, NGOs, and refugee and host community representatives at the decision-making table. There should be meaningful engagement with affected populations, beyond one-off consultations or surveys.

5. Partner with the Inter-American Development Bank.

The Islamic Development Bank was one of the founding partners of the GCFF in 2016, bringing with it financing and a critical set of relationships and experience working with Jordan and Lebanon. In Colombia, the Inter-American Development Bank (IDB) is a natural partner. The IDB president in September announced a fund that “could generate as much as $1 billion in concessional loans” by September 2020. The World Bank and IDB should create a formal partnership so that these resources are coordinated and deployed in a way that maximizes impact for migrants, refugees, and hosts. The partnership could also make it easier for donor countries align and complement their funding to efforts by the World Bank and IDB, maximizing versus duplicating responsibility-sharing contributions.

Colombia’s policies on Venezuelan refugees and migrants are relatively forward-leaning, while recognizing that much more progress is needed in practice (including in ensuring services, protections, and other necessary rights to Venezuelans without documentation). But Colombia is only one of many countries in the region seeking a more effective response. Peru, Ecuador, and others are hosting significant numbers of Venezuelans and are grappling with how to best respond, both individually and collectively. In September, Ecuador hosted 11 nations’ representatives to discuss coordinated, integrated response to the Venezuelan migrant and refugee movements. The region has demonstrated political will to address the crisis, but greater responsibility-sharing is required. GCFF financing is an important step forward and can pave the way for more medium-term investments in improved services and livelihoods opportunities for Venezuelans and their hosts.

Thanks to the IRC’s Lauren Post for her thoughtful comments, and to Kate Gough and Jimmy Graham for research assistance. All errors are my own.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.