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Financing for Protracted Displacement in the Syrian Refugee Context - January 2022

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This synthesis report summarises findings from three country case studies on Jordan, Lebanon and Kurdistan Region of Iraq (KRI), and identifies common themes and lessons for how financing can better support pathways to durable solutions in the region. With durable solutions not in reach for the vast majority of Syrian refugees, supporting pathways to durable solutions is understood to mean financing to strengthen future prospects for durable solutions and support refugees’ socio-economic inclusion or self-reliance in order for them to take informed and voluntary decisions if and when solutions become available.

Across the region, Official Development Assistance (ODA) is likely to remain the primary albeit increasingly constrained source of financing for displacement. This research finds that despite some attempts to promote more coherent, joined up and longer term solutions – for instance the establishment of the Jordan nexus task team - and some specific financing instruments designed to support pathways to medium to longer term solutions, such as European Union (EU) Madad Trust Fund, France’s Minka Fund and the Global Concessional Financing Facility (GCFF) – the short-term nature of much of the funding reaching displacement affected communities inhibits the development of medium to long term programming and approaches. Approaches seeking to draw in funding beyond ODA through blended finance and greater private sector engagement remain nascent, small scale and /or unproven.

The policy, legal and regulatory environment is fundamental to developing pathways to durable solutions. In generating or supporting political commitment to longer-term approaches to displacement, financing is the key influencing tool international actors have at their disposal. But there are hard limits to the influence financing can exert. Debt financing in particular limits political leverage. Looking forward, the intentions of donors and appetite to support coordinated positions and negotiate financing packages is very uncertain.

Financing needs to be carefully targeted, involving hard choices about the use of limited resources, in a constrained environment where medium and long term solutions for refugees are limited.
Financial, economic and policy environments have deteriorated across the region, further limiting the scope for promoting medium to longer term solutions for Syrian refugees. Realistically, there isn’t enough money to do it all well - donors face difficult trade-offs and are likely to prioritise urgent acute needs. Effective prioritisation of concessional finance in this context is key and support to meet immediate needs will be needed alongside longer-term approaches for the foreseeable future.

It is important to build on what works, generate more and better evidence and to calibrate and manage financing to incentivise inclusion and quality. Financing approaches including large packages of concessional finance through the GCFF and multi-donor accounts appear to have been effective in supporting inclusion in national service provision. Providing financial support to inclusion through national systems with ODA is both necessary and difficult and may entail a potentially open-ended commitment. Second generation funding instruments need to pay closer attention to the quality of services provided. Despite years of experimentation in the region, there is a lack of evidence on what works to guide decision-making. In some cases, the capacity of partners and willingness of donors – aside from the major financing mechanisms – has acted as a brake on longerterm approaches.

Coherence and coordination are key to utilising existing limited resources as effectively and efficiently as possible. Supporting medium to longer term outcomes for Syrian refugees and their host communities requires coherence between humanitarian and development financing streams, in which both are used in complementary ways to meet immediate needs while working to address structural vulnerabilities and risks over time. Aiming for longer-term outcomes requires coherent approaches to policy, programming and financing, as well as transparency of financial flows. It is not clear that current leadership, coordination, evidence and analysis support coherent financing approaches. However, large programmes and financing instruments have served as loci of coordination and coherence.