Sweden could solve their migrant problem by creating a new state-within-a-state where national laws don’t apply and sending thousands of migrants and so-called refugees there, the incoming chief economist of the influential World Bank has said.

Paul Romer, director of New York University’s Stern School of Business Urbanisation Project, made the remarks about his unusual approach to Sweden’s migrant crisis this week in an interview with the national newspaper Dagens Nyhter. Suggesting the zone could model itself on British Hong Kong, the senior economist said it could bring enormous benefit at no cost to the taxpayer.

Explaining his plan, the economist said: “The refugee issue is a huge problem, but there are possible solutions. Sweden, a sparsely populated country, could rent out a land area the size of Hong Kong.

“That could take millions of people who would support themselves, and not have to cost anything… It is important that this free zone should be considered independent, with its own laws and rules, and not as part of Sweden.

“Those who live there would not be Swedish citizens, but would live their lives completely separately from the rest of society.”

The economist has already suggested a similar zone for the United States, using the land in Guantanamo Bay to create an autonomous colony for refugees and migrants.

To make the zone work, Romer said there would have to be strong border controls with the rest of Sweden”making it impossible for free zone inhabitants to move to the other side of the border”. Freeing the migrants from restrictive labour laws such as the minimum wage and working time limits would stimulate economic growth within the zone, he said.

The basis for this assumption again rests with Hong Kong — the low regulation British crown colony which was one of the richest places on the earth — and that the arrival of hundreds of thousands of migrants would follow those who came from China and would be hard working and productive.

There are other real-world examples of where this has worked — the Russian exclave of Kaliningrad, a small parcel of land in northern Europe geographically isolated from the bulk of the nation — is the fastest growing region of Russia and per-capita, one of the richest.

Yet the European experience of newly arrived migrants has predominantly not been like that of Hong Kong, where Chinese arrivals were entrepreneurial. Despite initial optimism about the power of mass migration fueled by the refugee crisis to solve Germany’s demographic issues and fill gaps in the labour force, employment of so-called refugees has been stunted.

Of the over one million migrants that arrived in 2015, most have been found to be “unemployable” as the vast majority have absolutely no qualifications whatsoever. Just 54 had found employment with top German firms, despite a significant government-backed drive for publicly listed German businesses to hire asylum seekers.