World Economy

Migration Crisis Proves Boon for Some Businesses

Migration Crisis Proves Boon for Some Businesses Migration Crisis Proves Boon for Some Businesses

People crammed into boats and trekking across borders have become the dominant images of Europe’s migrant crisis. In the shadows, however, there are those who are profiting, for whom every migrant is a business opportunity.

The business of migration extends far beyond the human traffickers, who often grab migrants’ money and send them on life-threatening journeys on rubber boats or in cramped trucks. It include bus companies and shelter operators that provide essential logistical help to authorities overwhelmed by the sheer number of people in need of housing and transportation. Telecoms companies that sell SIM cards with special contracts for cross-border calls. And petty food-and-drink vendors at train stations are even known to be price-gouging, charging migrants double or triple the amount they’d be charged in stores around the corner, AP reported.

There are no overall estimates for how much the business of migration rakes in–but there’s no doubting it’s a multi-million dollar industry. Authorities in Germany estimate the cost of housing and feeding migrants alone at about €12,000 ($13,400) per person, per year.

Entrepreneur Bert Karlsson is among those profiting from the wave of migrants coming to Europe. The record company boss and founder of a now-defunct anti-immigrant party in Sweden raised eyebrows recently when Swedish media reported that his company, Jokarjo, had billed the government 132 million Swedish kronor ($16 million) to house asylum seekers.

Sweden is one of the main destinations for many of the Syrians, Iraqis, Afghans and others hoping to start a new life in Europe. Another is Germany, where the government has forecast between 800,000 and one million arrivals this year.

  Better Deals

Local German authorities have long outsourced the management of refugee shelters to non-governmental organizations, particularly charitable groups such as Diakonie, AWO and the German Red Cross. But faced with an unprecedented influx of migrants, private companies have been able to offer cash-strapped mayors better deals.

“We’re doing something some people consider dirty: we make money,” said Klaus Kocks, a spokesman for European Homecare, a housing company.

Refugee rights campaigners have criticized the company, claiming it cuts corners in order to be able to keep costs down and win contracts. Kocks denies this, saying European Homecare is simply better placed to keep costs low. The company buys in bulk to be able to provide full-board lodgings, with social and medical care, for as little as €11 per person, per night.

“Where there’s price competition those who have lean overheads win,” Kocks told The Associated Press.

Smaller companies, too, have been doing handsome business off migration. Far-flung hotels teetering on the brink of insolvency have received government contracts to provide all their rooms for refugees; one German firm has specialized in selling starter kits for refugees containing a bed, chair, table and kitchen utensils; security companies, meanwhile, are doing brisk business providing guards to keep the peace inside packed asylum centers and ensure they aren’t attacked by far-right extremists.

  Tainted Contracts

The sums involved have attracted criminal enterprises too.

In Rome, dozens of local politicians, businessmen and mobsters have been arrested or put under formal investigation in a huge corruption probe centered on allegedly tainted contracts to house and feed refugees.

In one intercepted phone call, police overheard a suspect gleefully comparing the money to be made off services for asylum seekers to drug trafficking profits–without the risks.

The greatest risks, but also biggest profits, are arguably taken by people traffickers who help migrants cross borders illegally. Many of those arriving in Germany say they paid traffickers to take them at least part-way into Europe.

The cost of a short boat ride from Turkey to Greece, for example, can run to €2,000 per person. On both sides of the journey support industries have sprung up, with shops on the Turkish coast selling life-jackets and plastic pouches to keep cellphones dry, and those on the Greek side doing a brisk trade in tents and backpacks for the onward journey.

 Kingpins Remain Safe

Further north, in Hungary, smugglers were asking up to €250 a head to bring people from the border to Budapest a few weeks ago. In order to get to Munich, migrants had to pay another €600-650.

Security officials warn that the traffickers who are caught are inevitably small-time crooks, while the kingpins remain safely in the background.

“Criminals who prey on the desperation of those fleeing conflict or poverty are making millions in profits, which can then be used to fuel corruption and fund other forms of serious transnational crime,” Juergen Stock, the head of Interpol, said recently.