The Economy of Conflicts Hasan ALPAGU Any behavior of individuals and the change in the society have consequences and these consequences lead to tangible effects and costs. The migration and refugees also cause economic, political and socio-cultural consequences. The fact is that immigration and refugee issues have created a unique international economic and administrative system. Currently, millions of refugees are part of this system, and they are trying to obtain their daily needs with very limited resources. These resources are managed by different local, national and international organizations, NGOs and other voluntary establishments. In addition, refugees are often fall in the hands of human traffickers and smugglers. In this study, the issue of refugee and migration have been studied in the context of "The Economy of Conflicts. Keywords: Conflict, Economy, Integration, Evaluation, Security, Globalization, Change JEL. J15, D87, E12 Introduction All economic, political or any other discipline is constantly in a progress of adaptation and transformation. The main motive behind this process is needs and chooses of world population, which are in a transformation and adaptation process. This evolution process forces firms, institutions, governments and individuals to develop new way of handling, which can lead them to maximize their profit and realize their expectations. In this evolution process there are some turning points, which differs themselves from any other occurrences of these developments. In other words, they are different, because they force discipline or approaches to undertake radial courses. The migration of mass is one of main element of these developments. Furthermore, the world's most flexible, adaptable and influential living beings are human species. The displacement or migration of human beings causes radical change in the economic and socio-cultural structures of their origin county as well as in their new homeland. Hereinafter, people are able to redesign the socio-economic and even in some extend geographic structure of their environment. On the other hand, this attempts frequently confront with the resistance of local residents. Most importantly, the migration and its effects/consequences are of interest to all parts of society. Owing to the importance of the subject, as a social science it is also of interests to economics. Migration leads to a chain of complications in the society. In particular, at the first stage the change is occurs in the labor market and in the demographic structures. There is no country that is able to preserve its demographic structure against migration. One of the main reason is the new process of remodeling of society, which forced to be occurred by migrants.
The migration and its economic and sociocultural consequences concern both source as well as destination countries of migrants. The immigration process leads to two ways change. One of them is seeking for a new demographic and economic equilibrium in country of origin and another in country of destination. The complications and problems caused by migration in a society are same time among the causes of migration. Therefore the economic and socio-cultural dimesons of that issue needs to be examined from innovative approach. Such way of handling bases on the creating integration models which provide migrants to integrate themselves into community's economic and social structure. Any integration model based on this principle will bring mutual benefits and long term solutions. In this study, we tried to figure out how and why such a process can be shaped. Dealing with the issue of migration in this solution-oriented and constructive critic perspective will contribute to efforts in this area. Objective and Methodology The chance of resolving any problem can be increased when it correctly diagnosed and then it became possible to develop a proper procedure for getting rid of it. Starting from this basic approach, this study and its socioeconomic aspects has been examined from a neuro-economic and constructive analytical point of view. In fact, this issue up to date had not examined from such a perspective. Furthermore due to limited and insufficient resources as well as terminological lacks in this field, in this study we try to use new formulations and definition as well as develop creative approaches. Hence the concept of this article is pioneering and groundbreaking. For this purpose, on the one hand we try to develop solutions to problems in this area, on the other hand we try to develop new concepts and perspectives for further research in this field. The ultimate aim of this study is to provide more effective and efficient approaches for decision makers in respect to encouraging reforms in field of migration policy. 2 Liberal and Socialist Approaches and the Migration Issue The fact is that, until end of the Second World War, scientists did not give appropriate importance to migration and integration issues. The main reasons behind this deficiency can be listed as follows: Demographic changes had not happening through migration but trough conquering. In other words, people did not migrate in masse, when their land lose its agricultural availability, they prefer to conquer other land. The result of immigration and integration problems were not visible as today they are. The integration and scientific approaches are the concept of urban and intellectuals. However, in these times, a significant percentage of the world's population was engaged in agriculture and lived in rural area.
Despite above mentioned reasons economist and social scientists such as Adam Smith, Karl Marx, and David Ricardo had stressed the importance of economic cooperation and integration of different components of societies without direct referring demographic challenges and immigration. In the 1800s clergyman Thomas Robert Malthus scrutinized the abnormal growth of the population and lack of agricultural land. Malthus made attention on asymmetric relationships between demographic trends and geographic constraints of civilization. In fact this criticism from Malthus can be interpreted as legitimizing proposal for migration. In other words, migration can be considered as such as valve to regulate the demographic structure of world population. In his masterwork "The Origin of Species" Charles Darwin also stressed the inevitable changes and adaptations of the all living beings on the planet to the new conditions. Darwin pointed out the micro level (root and cellular changes) of living beings. Following this approach, the migration and demographic change in society can be considered as the macro dimension of such transformation process. Furthermore, considering the issue of migration from different viewpoint, there are two main approaches with different argument: 1. Liberal or capitalist perspectives: According to this view, there are two types of immigration. They has been defined as legal and illegal migration. The main or the most important concern of liberal views is merely illegal migration. According to this view such migration movements should be prevented. Because they consider migration as a treat for the economic and social order of developed countries. As a suggestion of this approach these countries tend to tighten the border controls and tend to establish required refugee camps, in order to take control of migration streams. 2. Socialist or Alternative Perspectives: Socialists take an entirely different perspective on the issue of immigration. According to this view, migratory flows occur as a result of the immoral policies of the capitalist system. Accordingly as the consequences of these policies, the economic infrastructure of mentioned countries become weaker and fragile. Finally population of these countries forced to immigrate. Accordingly the developed countries became the opportunity to use a new market in an easier way, where immigrants are willing to work at very low wage. Thus industrial countries became able to produce more goods and services with low costs of labor. 3 Taking above mentioned two different views under a common consideration, following conclusions and recommendations can be incorporated. It appears that according to liberal perspective the welfare and security of the country outside the conflict zone have the priorities. In this respect, they pay attention to the issue of migration just because of their concerns relating to their economic and sociocultural primacies. In order to apply this policy the NGO projects and border security come foreground. Currently acting most influential institute of liberal world is United Nations High Commissioner for Refugees (UNHCR) that regulate and govern the migration problem according to the liberal immigration policies. As its name suggests UNHCR can be related with security incidents. In fact, the term Commissioner represents a securityrelated terminology. As such institutions of liberal worlds are considering the issue comparatively from security and priories of countries outside of conflict zones.
It give the impression there are limited little opportunity to provide sustainable solutions to the refugee problems. The accurate solution can be achieved through improving and creating tangible economic and social infrastructures in conflicts zones. Although many critics of socialists seem to be convincing, however experiences emerged in the USSR and the former Eastern Bloc Countries during time of communist regimes proved that they cannot be an alternative to liberalism. In fact, the solution could be found in Keynesian interventionist policy, which consist from a combination of socialist and liberal policies and governmental intervention in case of economic crisis. The Motives behind Immigration and the Social Change in the Societies Decision for migration has several critical backgrounds. This applies to all living things. All living beings depend on their location and habitat within the framework of the following points: Economic reasons (home, shelter, work, properties) Legal and political (civil, political unity, patriotism) Cultural (same language, religion, ethnicity, geographic unity) Emotional or psychological (emotional commitment, fear of displacement, trust) In case of occurrence of problems in one of above mentioned point, people first try to find internal solution, if solutions are not found, ultimately the incidents force people to migrate. Especially economic concerns can force mass immigration. The demographic movements in former East Bloc countries after fall of communism can be given as prove to the relation between immigration and economic collapse. 4 In this countries, what people most desired was freedom in the first place. After fall of communist this aim has been achieved, but then economic concerns came to the foreground and a significant part of people from Poland, Bulgaria and Romania and in other Eastern Bloc countries immigrate to Western Europe, Britain and to the United States to find work. In the civil war in Syria, the situation became a different dimension. The first and only cause of mass fleeing were civil war and security concerns. Hence economic resources have been sacrifice to save the life safety. Here especially liquid assets such as cash money, gold and other precious material were the most applicable capital to afford a way of escaping from conflict zone. Hence, most of poor people, women, children and disadvantages people could not manage to escape and remain got stuck in conflict zone. Migration as a Dynamic of Evolution Process of Society The migration is a dynamic part of evolution process of society. The changes on the earth and the evolution process of society both are based on the same progress. They are slow but steady and at the same time inevitable. The earth has developed itself to its current form in millions of years. But this current appearance is not the final one. The earth s evolution process is continuing. It means that after years and years some component of Earth will take another form.
Some landscape will be covered by water, some mountains will sink underground, and continents will move away from each other or join together and change their existing appearance. The social order of civilization changes by exactly the same methods. It is in a continuous but slow evolutionary process. We could not measure these changes well in time or influence them. These changes are, much like the changes in the planet, beyond our control. In the universe elements are linked with each other in various forms and ways. However none of these forms will remain forever in same group. Because there is a continuous changing and breakdowns, breakups and explosions taking place in each group of elements. Each fraction becomes a new event. And each event will bring its own results. The laws of physics and chemistry allow a new formation of new elements. The Motives of Migrating and Unequal Distribution of the Population on Earth The fact is that the growth rate of population has many dimensions. While developed countries suffer under meager population growth, developing countries in contrast have an economic and social dilemma because of high population growth. More population means more challenges for them. They have not enough resources or accommodations for these surplus populations. High and low population growths tag along a circle of reasons and have many social, political and economic dimensions. It is most important that these challenges should not be ignored. Their consequences affect the economic as well as the political future of societies and countries. The immigration decisions of people take place as in the Keynesian animal spirits of entrepreneur s theory, a term coined by Keynes to describe investors feelings. 5 Moreover, the immigration of people functioned like the immigration of migratory birds. The migratory birds immigrate because of the change of seasons force them to do so. If, in their country of origin it becomes spring again, they return. This also applies to humans. If one were to improve the survival possibilities in their own countries, many immigrants would return to their home countries. Migration is changing a habitat to another. It's part of the nature of living beings. There is an exchange process which is never stopped to change. Furthermore, the immigration is taking place since begin of civilization on earth constantly. Neither developed countries nor less developed countries are able to regulate this process accordance with their own priorities and interests. The migration inflames a chain of economic, political and sociocultural complications in societies, consequently it disrupts the infrastructures of countries. Therefore particularly developed countries are trying to regulate and control migration through strengthening their border control and making their refugee policy tougher. On the other side, the migration obtaining significant contribution to the economy, social, cultural and most importantly regulation of world population. If reasonable and sustainable policy will be followed by countries, they will benefit mutually from this never ending process. Thus the migration which mostly based on labor force will help to increase employment and economic development.
The correct migration policy will provides circulation of human sources that feeds economy completely, which creates multiplier effect as receiving input and submitting output to the other sectors. Human Smuggling as the Core of the Economy of Conflict One of the socioeconomic challenge of globalizing word is the issue of refugee and the new economic condition of mass migration. According to the data from United Nations High Commissioner for Refugees, in end of 2014 nearly 60 million people have been forced to emigrate due to war, internal conflicts and socioeconomic instability in conflict zones. Nearly 85% of these refugees tried to find a temporary place in their own countries or regions, in order survive treating conditions. These part of population choose this way, just because they cannot get the opportunity for managing to immigrate to other countries outside of conflict zones. As a result they remain in the conflict zones and live under constant threat. On the other hand, while millions of people are struggling to seek refugee from EU and other regions outside of conflicts, this striving creates a new form of market structure. We try to explain this concept in framework of "conflict economy". Also accordingly a new form of business and profit market system has been developed. In this system there are acting statesmen, some component of security forces and various person with different backgrounds. Despite the fact of impasses, refugees try to overcome legal obstacles at any price. On the other side, the agents of this risky business are aiming just their own profit. Accordingly thousands of refugee lost their life even if they pay their last possessions to human smugglers. In this market there is less place for moral and other kind of business ethics. Paradoxically although the human smuggler s business is running illegal, however, they are often only hope for refugee for managing to flee to from conflict zone. In fact, without possessing legal documents such as a valid passport and a visa, there is no way to cross-border, with the exception of illegal tryouts. This fact leads to creating an illegal economy system of conflict zones and the refugees often landed defenseless in this illegal market. In this illegal market the risks for both side are significantly high and there is no any kind of payback possibilities such an insurances in case of failures of agreed deal. 6 In the market of conflict economy the valid currency for transactions are US dollar, Euro and precious metals like gold. Correspondingly due to high risks and other kind of instability in this market the real property and other goods and services are not accepted as a medium of exchange. The fact is that the illegal business on migrant s flows and the market of economy of conflicts is way to achieve a profitable income. This market is acting according to the rule of free market system, but with unequal conditions. Because it is a working according to supply / demand and the profit motivations of liberal trade. On the other hand, the humanitarian and ethical aspects of this business is controversial as the tragic situation of refugees.
Table I: The Problem of Refugees by Numbers 7 Countries with Highest Number of Foreign Refugees Country Number of Refugee Problem Syria 3,88 Million Radicalism and impasses of regime Afghanistan 2,59 Million Taliban and weak economic / political infrastructure Somalia 1,11 Million Radical movements, piracy and hunger Sudan 648.900 Integration and conflicts with southern Sudan Southern Sudan 616.200 Integration and conflicts with Sudan Congo DR 516.800 Conflicts between Tutsi and Tutu and democratic deficits Myanmar 479.000 Ethnical and religious conflicts, democratic deficits 8 Countries with Most internal refugees Number Country Number of Refugee Problem Syria 7,6 Million Continuing ethnical and sectarian conflicts Colombia 6 Million The guerrillas of the FARC, coca and poverty Iraq 3,6 Million Radical movements Congo DR 2,8 Million Tutsi and Hutu conflict and democratic deficits Sudan - 2,1 Million The problems relating with the seeking for establishing a new equilibrium after separation of South Sudan from main Sudan Southern Sudan 1,5 Million Integration and Infrastructure Problems Somalia 1,1 Million Radical movements, piracy and hunger Ukraine 832.000 The formation of a new pro-russian autonomous region 6 Country with Most number of refugees Hosting Country Number of Refugee Problem Turkey 1,59 Million Capacity and internal pressure Pakistan 1,51 Million Capacity-out and poverty Lebanon 1,15 Million Increased refugees and internal problems Iran 982.400 Uncertainty and turbulences with the West Ethiopia 659.500 Increasing the number of refugees from neighboring countries Jordan 654.100 Increasing problems in refugee camps Source: UNCHR 2014, Eurostat 2014 7 Important note: This data can be changed at any moment depending on the level of violence and instability. As shown in Table I, there is a progressive linear correlation exists between the number of refugees the level of conflicts and uncertainty.
The people in the conflict zones are suffering under the effects of internal economic / political conflicts and crisis, so they look out ways for immigrate. However the toughest barrier to drag themselves outside of conflicts zones are border security and legal obstacles of mentioned regions. Significantly the only way to overcome these blockages is trying to flee in illegal way. Other significant obstacles are geographic difficulties such as deserts, sea and mountains. Even if the refugees can overcome all barricades and achieve to land outside of conflict zones, due to legal restrictions, economic difficulties and sociocultural prejudices their struggle for surviving remains in same grade as in their origin country. All these makes it difficult to escape the spiral of problems that refugees are facing continuously. Scale of the Economy of Migration The evolution process of society has also economic as well as social costs. The emigration as a part of this process of has also such prices. Immigration has long and short run positive as well as negative effects on the economic and socio-political structure of countries. Any basic economy model needs four component to process resources. These are: Land Labour Capital Entrepreneurs Also accumulation of capital is the main target. In order to accumulate capital, investors need human resources such as labour and entrepreneurs. Hence, migration has effects directly quality and quantity of labour and entrepreneurs. These two element of economy further built accumulation of capital. Consequently for host countries, migration takes the role of balancing lack of labour and entrepreneurs. On the other side, migration especially migration of skilled population and entrepreneurs in case of war and other crisis effected negatively on the economy of home countries of mentioned migrants. 8 Additionally, the economy immigration is functioning according to rules of informal economy. Henceforth, there is no a concrete references and criteria to obtaining its size, effectiveness, efficiency and future expectations. However, comparative indicators in the origin and destination countries can make the effects of the economy migration partly measurable. For instance according to data form Turkish statistic institute officially the number of refugee from Syria in Turkey is 1.6 million and the Turkey's population is 76.7 million. Considering that, there is a 2.1% increase in Turkish population in a short period of three years. These demographic change have also economic effect on Turkish economy. Especially this new unexpected increase in Turkish economy means a 2.1% new consumers that in need to basic requirements such as shelter, nutrition and clotting. These requirements push the demand for goods and services in these sectors. On the other hand, it is difficult to calculate the exact effect, costs as well as contribution of refugees on economy of host land. The reasons can be counted as in the following points:
It is difficult to identify the location and the number of refugees where they live It is unmanageable to take an inventory of valuable assets and goods of refugees Due to legal restrictions that refugees are not allowed to work and participate to the economy system of host country, they illegal activates such as illegal work and participation gin other kind of informal economy, their income remain undeclared. Despite above mentioned reasons, the contribution of migrants to host country's economy are significant. Namely: Low-cost labor and thereby reducing production costs An arising in demand from the compulsory expenditure such as rent, medicine, food, clothing create a significant potential new consumers The qualified refugees bring quality to human resource reserve Inspiring social and cultural changes Formation of new field and data for researchers Possible negative effects of refuges on the economy of host country can be considered in following headings: Increasing of unemployment rate Lead to exceeding the capacity of social and economic infrastructure Safety issues Cultural and integration issues Deformation of human values such as solidarity, empathy or vice versa Increase in rate of poverty and the deterioration of income distribution The formation of massive trauma 9 Above listed causes and consequences are valid for destination country. On the other side, the consequences of immigration for origin countries for short and medium-term have radical economic, social and cultural structure shocks. In the long term the conditions in the host country are decisive for new status of emigrants. In addition, immigration can lead to radical political, economic and cultural changes in origin as well as host country. Indeed in the course of the history several authoritarian regimes have been terminated by diaspora. The Role of NGOs and International Organizations in the Economy of Migration The developed countries have established organizations such as UNCHR and NGOs in order to regulate treating effects of mass immigration on their demographic, economic and sociocultural infrastructures. Indeed, today the refugee problem and fight against illegal immigration lead to develop a new economic and administrative structure. The founders of this structure and decision-makers are developed countries immigrants, because they are facing mass immigration from conflicts zones. The origin countries of migration are suffering under economic, political and social infrastructural complications. Hence the role of organizations from developed countries are significantly decisive by regulation of migrant movements.
The budget of these organizations are increasing parallel to increasing of migration inflows. Due to legal restrictions and required high qualifications such as graduation from a nominated university in developed countries make it almost impossible for emigrants to find a work in these international organizations. Salaries of employees in these institutions and organizations are over international standards. Considering the risks taken by these employees this kind salaries are justifiable. However, on the other side, there are significant contradictions between the economic statuses of these high paid employees with the situation of almost dispossessed emigrants. Another problem in managing the problem of refugees is that, these employees have been educated mainly according to theoretical education in developed countries without deep structural and appropriate practical experiences on the issue of migrants. Therefore these experts remain incomplete and insufficient for solving the complicated problems of refugees. Table II: Main institutions and organizations of the economy of conflicts Relief and Institutions institution Origin Field Description UNRCH UN refugees Annual Budget 6 Billion USD EULEX EU Rule of Law The annual budget of 80 million euros USAIAD USA Food, Health Budget 22.3 billion USD, with 3,909 employees people Red Cross NGO Food, health, Budget 1110.2 million Swiss shelter francs, 12,500 Employees Turkey Red NGO Food, health, 140 Trillion TL Crescent shelter Doctors Without Borders NGO health The annual budget 610 million USD 34.146 volunteer people Security and Military Institutions institution Origin Field Description The NATO- NATO If necessary, military intervention in the conflict KFOR BM-Blue UN Mediator in the conflict region and security helmets Source: EULEX, UNHCR, USAIAD, Red Crescent, Red Cross Annual Reports 10 The effectives and impacts of these organizations can be criticized from various aspect, however, consisting of such institutions is an important requirement for reduction of the consequences of migration. In fact, wherever there is a problem, there should be also search for solutions. On the other hand, such institutions need to be reformed and advanced according to increasing requirements for realistic polices on the handling methods to dealing with the issue of migration. Depending just to the efforts of well-educated and high paid experts form nonconflict zones in case of seeking solutions for refugee problems will be inadequate, unrealistic and incomplete. Including more specialists and academics from conflicts zones will be one important reformation of such strategies. Otherwise, the destructive consequences of refugees will lead to further humanitarian, economic, political and social cultural complications.
Conclusion Since the first sign of civilization, societies are in an economic, political, religious, geographic and socio-cultural evaluation process. This transformation processes develop its own specific problems and the solutions to these resolving these problems. This process is directly related to people's needs and therefore rational behaviors comes foreground to share of resources to meet these needs. Hence the transformation process gain a new dimension. So for people try to meet to meet their essential needs under all circumstances, accordingly a new system of supply /demand develop itself automatically. In course of time, this process get systematized and become a part continuing war and conflict, in which the struggle of people to survive under any conditions lasting to exist. In this context, migration and refugee flows create new customers and potential customers. Many organizations and individual entrepreneurs have been included in the system to meet the needs of this new customers. In this study, first time to this process has been considered as a new concept of business, which we called "the economy of conflicts". The immigration of people is different than the immigration of animals. The human migration takes place due to unexpected occurrences such as war, conflicts and weak economic circumstances. On the other side various organizations have been involved in this process in order to reduce the consequences of migration. Solving the problems of migrants it has created a new economic sector. In this sector there are various international institutions and NGOs. Finally, the economy of conflicts represents the most inequalities and contradictions. Literature 11 Alpagu H., (2014a), The Contradictions of the Free Market System and The Impacts of FDI and Foreign Trade on Economy, Turkish Economic Review, Volume 1 December 2014 Alpagu H., (2014b), The Economic Challenges and Everlasting Conflicts of Society International Interdisciplinary Journal of Scientific Research, Vol. 1 No. 3 December Alpagu H., (2014c), The Economy and the Power of Money, International Interdisciplinary Journal of Scientific Research, Vol. 1 No. 2 November, 2014 Darwin C., The Origin of Species by means of Natural Selection, PDF. Keynes J.M., (2007), The General Theory of Employment, Interest and Money, Palgrave Macmillan, London. Marx K., (2008), Das Kapital, Kritik der politischen Ökonomie von,, Dietz Verlag von Rosa- Luxemburg-Stiftung, Berlin Smith A., (2005), An Inquiry into the Nature and Causes of the Wealth of Nations, The Pennsylvania State, University press, Pennsylvania Yearbooks; Eurostat and UNHCR 2014