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Challenges to Integrating Refugees into the Formal Economy in Jordan

Photo credit: Medair/EU/ECHO/Kate Holt. Mohammad Raabah, 71 years old and from eastern Damascus. and who has lived in this disused building for over two years, sells some children some sweets in the small shop he has set up in the one room he lives in, in the town of in Zahle, Lebanon.

 

The following analysis appears in the Special Issue on Refugees & Migrants in Volume 4 of the Peace Science Digest.

CitationLenner, K, & Turner, L. (2019). “Making refugees work? The politics of integrating Syrian refugees into the labor market in Jordan.”Middle East Critique, 28(1), 65-95.

Keywords: Jordan, Syria, refugees, work, economy, humanitarian aid

What happens to refugees once they arrive in a receiving country? In many cases, refugees are caught in protracted situations, living in countries foreign to them for upwards of five, ten, fifteen, or more years.1 Most receiving countries tend to be lower- or medium-income, developing economies with limited resources to extend and their own domestic politics to contend with. This results in a thorny situation for refugees and the countries that host them: refugees are presented with few livelihood options, receiving countries are resistant to offering pathways to employment or permanent residency because of competing demands with their resident population, and both rely heavily on humanitarian aid and foreign assistance.

To address these challenges, the government of Jordan along with numerous international partners developed the Jordan Compact in February 2016. This is a work program created to integrate Syrian refugees into the formal economy by providing work permits in particular sectors in need of labor. The Government of Jordan declared that it would grant work permits to as many as 200,000 Syrian refugees (as of May 2017, 51,000 work permits were issued). It is supported by trade deals with the European Union aimed towards bolstering Jordan’s export economy. Additionally, this program gained international support as a means to prevent refugees from attempting a journey to Europe.

This article reviews the effectiveness of this program, understanding that programs like the Jordan Compact have gained international popularity among foreign aid, humanitarian, and donor communities. These programs frame refugees not just as “objects of humanitarian care” but as “unused human capital, which can be made productive.” Before similar programs are implemented in other countries with large refugee populations (the U.K. is currently pursuing one in Ethiopia), this article suggests that designers take more care to consider the local economic context to ensure that these programs achieve what they set out to achieve.

Specifically, the article calls out three “underlying dynamics” in the Jordanian economy that have undermined the success of the Jordan compact: 1) zonal development strategies, 2) a “nationally-segmented labor market that builds on specialized, precarious migrant labor,” and 3) the pervasiveness of the informal labor market. Zonal development strategies seek to attract investment and support an export economy by creating business opportunities in specific industries, like garment or textiles. Yet, because Jordan is a destination for multiple refugee and migrant communities, many industries benefit from (and prefer) migrant labor. For instance, migrant workers from Southeast Asia dominate the garment workforce in Jordan because of their willingness to bear long hours and low pay. Employers also benefit from an informal labor market that is engrained and tolerated in social and political structures. The informal labor market is a popular option for refugee andmigrant populations. Most recent figures from 2013 by the United Nations Development Program (UNDP) estimate that informal employment accounts for 44% of all private sector employment in Jordan. This number has likely increased due to the influx of Syrian refugees since 2013.

With this in mind, the effectiveness of the Jordan Compact thus far has been mixed. Opportunities were contingent on economic sectors, since work permits specify the industries in which refugees must have employment. Shortly after the Compact was finalized, a plan was developed to recruit 2,000 Syrian refugees for work in the garment industry beginning in April 2016, since it was among the more successful export industries in the Jordanian economy. However, by the end of 2016, only 30 Syrians had been employed through this plan. It failed because it implicitly targeted Syrian women who were particularly unwilling to travel long distances for work, had concerns about the availability of childcare, and were uncomfortable working in factories with men. In other cases, Syrian refugees avoided signing up for formal work permits for fear that it might affect their access to financial assistance or refugee resettlement, opting instead to seek employment informally in sectors like construction, wholesale, or agriculture. Despite this prominence of the informal labor market among refugees,the agricultural sector did see some success in formalizing refugee workthrough the Compact by allowing for work permits through agricultural cooperatives. By working with agricultural cooperatives that allowed refugees to work for more than one employer, the Compact successfully issued 16,000 formal work permits for Syrian refugees by May 2017.

Talking Points

  • The Jordan Compact is a work program for Syrian refugees created by the Government of Jordan and numerous international partners that frames refugees not just as “objects of humanitarian care” but as “unused human capital, which can be made productive.”

  • The success of the Compact has been undermined by three underlying dynamics in the Jordanian economy: zonal development strategies, nationally segmented labor, and pervasive informal employment.

  • While the Jordan Compact was driven by a desire to create “generalizable global policy models,” this article argues that designers should take more care to consider the local economic context to ensure programs like it achieve what they set out to achieve.

Informing Practice

The human cost of war extends beyond casualty numbers and impacts the millions who flee and those who accept the responsibility to care for them. For refugees, fleeing to a neighboring country means leaving behind their livelihoods for an uncertain future. How might they not only provide for their families but also fulfill their own desires and aspirations? For receiving countries, there is a strong humanitarian and ethical impulse but also a set of political and economic challenges compounded by the refugee crisis. International support is critical. But international support can be capricious. The protracted scenario in which many refugees find themselves means a reliance on humanitarian aid for decades. This combination, the need for long-term support and the unreliable options for that support, calls for a more sustainable approach.

Other research examined in this special issue (Haer & Hecker’s work on refugee recruitment) highlights the need for economic development for refugees. The authors find that a lack of economic opportunity makes refugees more vulnerable to attempts at armed group recruitment. In cases like these, programs like the Jordan Compact could effectively deter recruitment and therefore, ultimately, violence. Economic development programs in these contexts can be viewed, therefore, both as sustainable solutions to the refugee crisis and as peacebuilding activities in fragile or conflict-affected contexts.

The Jordan Compact was framed as a win-win strategy among the various stakeholders involved in developing it — including the Government of Jordan, various international organizations like the World Bank and the United Nations High Commissioner forRefugees (UNHCR), and numerous international civil society, donor, and private sector communities. The author notes that the Compact is a “remarkable compromise” that “mobilized a range of actors, agencies, and agendas, and tied them together in a joint project.” All of these where driven by “a shared desire to create development policy successes and generalizable global policy models.”

This article demonstrates that, while the Jordan Compact has the right intentions, the practice of implementing “generalizable global policy models” must be tailored to the social, economic, and political conditions of the specific context. This is an important but by no means easy task. Perhaps the most efficient way is to develop an iterative model that incorporates learning from the challenges and successes of a program to improve its design. There are examples of this approach in humanitarian work. For instance, International Medical Corps has launched a toolkit for integrating mental health capacity into humanitarian settings.1 It develops a three-step model where monitoring, evaluation, accountability, and learning are cross-cutting components. This approach, adopted elsewhere, would create a built-in method for adapting programs to local circumstances.

1. International Medical Corps. (N.d.). Toolkit for the integration of mental health into general healthcare in humanitarian settings. Mental Health Innovation Network. Retrieved July 16, 2019, from https://www.mhinnovation.net/collaborations/IMC-Mental-Health-Integration-Toolkit

Continued Reading 

Buffoni, Laura. (2019, July 9). The Jordan Compact would work better iwlistened to refugees. News Deeply. Retrieved August 12, 2019, from https://www.newsdeeply.com/refugees/community/2018/07/09/the-jordan-compact-would-work-better-if-we-listened-to-refugees  

UNHCR. (2015, March 26). The entrepreneurial spirit is alive in refugee camps. USA for UNHCR. Retrieved July 17, 2019, from https://www.unrefugees.org/news/the-entrepreneurial-spirit-is-alive-in-refugee-camps/  

Botzung, M. (2019, July 17). What can the private sector do to alleviate the refugee crisis?  World Economic Forum. Retrieved July 17, 2019, from  https://www.weforum.org/agenda/2019/07/what-can-the-private-sector-do-to-alleviate-the-refugee-crisis/  

International Finance Corporation. (2019, April). Private sector & refugees: Pathways to scale. International Finance Corporation. Retrieved July 17, 2019, from https://www.ifc.org/wps/wcm/connect/region__ext_content/ifc_external_corporate_site/sub-saharan+africa/resources/psr-pathways-to-scale  

Organizations/Initiatives 

UN High Commissioner for Refugees (UNHCR): https://www.unhcr.org  

Refugees International: https://www.refugeesinternational.org  

1. Devictor, X., & Do, Q.-T. (2016, September 15). How many years do refugees stay in exile? World Bank Blogs. Retrieved July 17, 2019, from https://blogs.worldbank.org/dev4peace/how-many-years-do-refugees-stay-exile

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