Financial Cryptography

How Refugees are reducing the cost of processing refugees - for around $2000

Der Spiegel online reports:

At some point Hassan Rahimi * wanted to go back, he tells it. Back to Syria , home, to his wife and two sons. They were starving in the devastated land. Rahimi saw himself as a refugee in Germany failed. The family he was not allowed to catch up, he did not get a job. The hopes that had led him to flee in early 2015 were dashed.

And so the 35-year-old sat on a summer day 2017 in Berlin-Tegel in a plane to Thessaloniki, Greece. Once there, he entrusted himself to a smuggler. The man should take him to Turkey, the transit country - as if on the way there.

"Sell your papers!"

A refugee who has been recognized in Germany like Rahimi is not allowed to enter Turkey without further ado. And so the tug Rahimi even before the green border gave an advice: "Sell your papers!" The German documents, refugee card and refugee passport, the AOK card. To deny yourself if border guards suddenly turn up. And to make money.

Rahimi did as he was told. He sent the papers by post to his cousin, who lives in Leipzig. And he sold on to a stranger. For 1500 euros. Rahimi was later sent the sum. He was already back in Syria.

It's almost as if there is a law of identity documents - they work for the middle road of broad society but fail dismally at the edges. In this case, the desperate, but also the criminal, who are two separate classes merged into one in the fairyland fantasy of the bureaucratic mind.

The CDU interior politician Armin Schuster, chairman of the parliamentary control committee in the Bundestag, nevertheless calls sharp sanctions for fraudsters. "Every refugee who participates in a pass trade, has forfeited his right of residence," said Schuster the SPIEGEL. In this case, there must be "an accelerated form of deportation".

Yet - the broad swathe of comfortable society - they (we?) don't really need identity documents, because we already know each other and we already trade and we already have comfortable safe lives and we behave. Remember being taught not to steal as a child? You don't steal because of your identity documents, you behave because you're part of the community, and you want to remain part of the community.

Identity documents work for people who don't need them; they don't work for those that do. What is this product called in marketing or economic terms, the product that sells and works only for those who don't need it? A few terms come to mind: Vanity goods, marketing discrimination, security theatre, entrapment.

There are many discussions and conclusions we can draw from the story of refugees, but some are easy: the authorities will always say, our system is broken, bad people are doing bad things, we must try harder ! Bracelets, implants, biometrics, liveness detection, fingerprints, toeprints, roving police checks, cultural alignment testing! Meanwhile, only refugees will know that the recognition of status without humanity is no recognition. They will drift on in hope, as they are boxed into their new isolated, tolerated but despised class - like gypsies, never finding a real home, always despised.

Yet, perversely again, maybe in the breach we see the flaw:

The scam is therefore quite simple: Recognized in Germany refugees travel to Turkey. Somewhere along the way they sell their papers, apply for replacement at German consulates - if they want to return to their host country - or continue like Hassan Rahimi the journey to their homeland without documents.

Oh, the cunning devils at Der Spiegel - the real trade is different, and Rahimi's story is just to tug at the heart strings. Refugees are bringing back additional refugees!

Let's say the cost of formally processing a refugee through "the system" is X. And let's say the cost of informally running (a.k.a. smuggling) a new refugee through Greece is Y == €2000 = 3 flights + $1000 + the cost of replacement documents.

The cost of processing two refugees under this enhanced scheme is now to X + Y. The fact that refugees are doing this - bringing in new refugees and taking on the risk of right-wing outrage to boot is evidence that X is too high. This formula only works if X is very much greater than €2000.

To take a stab at that, I'll guess that the state's cost is around €100,000. To support that, if we go back to the start - the cost of Rahimi not finding a job is easily €20,000 or more. So, under these finger-in-the-air assumptions, the authorities have set the cost of processing a refugee too high, and therefore the system is breaking at the edges.

Assuming that Rahimi doesn't sell his papers to a terrorist (a vanishingly small probability) everyone wins under this scenario. The state saves $100,000 and the new refugee saves on a year of misery.

One may have moral views on the above - "it's just not right!!!" - but when the economy saves money, the economy follows the money. For more numbers and a slight segue:

Elsewhere, a potential salesman tells that he arrived in Turkey four days ago. "I have a residence permit for three years, with a passport and AOK card." If you are interested, the package of German papers for $ 1000 to have. It is crucial that the photo could be used on the documents. A buyer must look like him. Otherwise the danger would be too great to fly up with the papers.

.... There, people offered real passports from 500 euros, passes from 200 euros and driver's licenses from 150 euros.

Higher up, €1500 and here, $1000. I guess I've been tracking the cost of stolen documentation for a decade now, and it quickly settled around 1000 ($ € £). In the Spiegel article, we see it hasn't changed in a decade, which I find surprising. It suggests that nothing that has happened over the last decade has changed anything, at least in the supply versus demand.

ps: better translations welcome.

Posted by iang at April 19, 2018 11:12 PM