Following the fall of the last Muslim stronghold of Granada in Muslim Spain at the hands of Isabella I of Castile and Ferdinand II of Aragon, the victors issued what is known as the Alhambra Decree. The decree,issued ‎on 31 March 1492, ordered the expulsion of practicing Jews from former Andalusia by 31 July of that year. Sultan Bayezid II (1481–1512) of the Ottoman Empire, ‎learning about the expulsion decree, dispatched the Ottoman Navy under ‎the command of Kemal Reis to bring the Jews safely to Ottoman dominions. Sultan Bayezid II sent out ‎proclamations throughout the Ottoman Empire(spanning three continents and including South Eastern Europe, the Middle East, and North Africa)that the refugees were to be welcomed.

Indeed, he threatened ‎with death all those who treated the Jews harshly or refused them admission into the empire. Ridiculing ‎Ferdinand and Isabella for their short-sightedness, the Sultan remarked to his courtiers, ‘You venture to call ‎Ferdinand a wise ruler,’ ‘he who has impoverished his own country and enriched mine!’‎‎ Some 100,000 Jews are estimated to have been given refuge in the Ottoman lands.The Ottoman Empire became a safe haven for Iberian Jews fleeing persecution, and in its heyday, the city ‎of Thessaloniki had a Jewish majority. The Jews of Al-Andalus (Iberia) contributed much to the rising economic power of the ‎Ottoman Empire by introducing new ideas, methods and craftsmanship, with the presence of luminaries, such as, the Talmudist and scientist Mordecai Comtino; ‎astronomer and poet Solomon ben Elijah Sharbi ha-Zahab; Shabbethai ben Malkiel Cohen, and the liturgical ‎poet Menahem Tamar.

This example of the positive impact of refugees on host societies is not unique. There is near consensus in the economic literature on the positive impact of refugees. Both demand and supply forces contribute to the favorable economic impact of refugee integration into the labor market. First, on the supply side,refugees who find work stimulate the economy by contributing to production.‎Second, on the demand side, the refugee-related expenditures by the government are accompanied ‎by positive economic demand impulses, as exogenous increase in expenditure leads to a chain of spending and ‎respending with the eventual increase in GDP being a multiple of the initial dose of exogenous expenditure. This is the celebrated Keynesian Multiplier Effect. Thus, over the intermediate and long run, the economic benefits of integrating refugees into the labor market more than offset the short term economic costs borne in the immediate aftermath of admission.

‎The economic case for admitting large number of refugees becomes stronger when,prior to admitting refugees, the host countries face a demographic deficit,with the proportion of working age population in the economy shrinking. Most advanced countries, including Germany, have been suffering from a huge demographic deficit with native fertility rate falling below replacement level.

Refugees who manage to brave the perils of drownin g or the risk of starvation and subhuman living conditions for months and years are the kind of young, energetic, and motivated people that can inject badly needed fresh blood into the labor market of these countries. Refugees want to live in dignity, they want to work!‎

It is against the backdrop of the looming demographic drought that the German hospitality towards refugees should make sense. The ‎German Institute for Economic Research (DIW) conducted a study on the impact of Syrian ‎refugees on the German economy. They found that in the most favorable scenario, the positive effect of integrating refugees in the labor market can come about after just four or five years.‎

‎”Refugee influx is a major opportunity for Germany,” the authors observe,‎“[E]ven if the labor market integration turns out to be sluggish, the refugees will still have a ‎positive impact on the German economy after five to ten years. ‎Most importantly, even in terms of per capita income of non-refugees, the benefits will ‎exceed the costs in the long-term, thus highlighting the benefits to the entire economy.”‎

Despite the misperceived negative economic impact of refugees on ‎the receiving countries, which might be partially true in the short run, it is possible to view this challenge as an opportunity ‎to boost the economy, with the cultural and demographic enrichment as a bonus. ‎Costs associated with short-term humanitarian cash and food assistance are necessary to ease the integration of refugees into society, and should be seen as ‎an ‎investment in the future.‎

For Bayezid’s hospitality ‎to Jews, or Angela Merkel’s generosity in admitting a ‎million refugees, while we don’t know whether humanitarianism or ‎economic calculus has the better claim,‎‎we do know that the economic argument is quite powerful in terms of both logic and empirical evidence. Thus, there is a method in the madness of German generosity towards refugees!

The writer joined Qatar University as a Fulbright scholar and is currently a Research Assistant Professor in the Center for Humanities and Social Sciences (CHSS) at Qatar University.