Friday, September 23, 2016

Article in Foreign Affairs Magazine: Unlocking refugees' economic potential

Article in Foreign Affairs Magazine: Unlocking refugees' economic potential
Risk and Reward


Wednesday 21 Sep 2016
The foreign Affairs Magazine

MANAL OMAR is the Associate Vice President for the Middle East and Africa Center at at the U.S. Institute of Peace.

ELIE ABOUAOUN is Director of Middle East Programs with the Center for Middle East and Africa at the U.S. Institute of Peace.

Over the past four years, the Zaatari refugee camp [1] along Jordan’s border with Syria has undergone a jarring transformation. What was once a desolate desert settlement has become a bustling, oddly vibrant city of 80,000. Virtually every one of its residents has suffered unimaginable loss and needs help from the international community, but they aren’t just waiting for it. In the
forest of tents and prefabricated homes, barbers and teachers, fruit vendors and bakers—all Syrian refugees—are playing a role in their local economy.

It is a phenomenon we have witnessed before in working with people who’ve fled violent conflict in places such as Darfur, Lebanon, and Iraq. After losing everything, many displaced people have the resilience and resourcefulness to try again. And that begs a question: Why are these individuals, with their varied backgrounds and talents, so seldom viewed as an economic opportunity? It is a question addressed at two major meetings held this month during the opening of the United Nations General Assembly in New York: The UN Summit for Refugees and Migrants on September 19, followed the next day by the Leaders’
Summit on Refugees, hosted by U.S. President Barack Obama. The UN summit called [2] for a crisis response that goes beyond humanitarian aid to embrace employment and education. Obama is seeking enhanced work rights for refugees amid other massive increases in refugee assistance.

No doubt, the strains refugees place on host countries today are enormous. Lebanon’s population of four million, for instance, has ballooned 25 percent with the arrival of fleeing Syrians. Refugee children comprise 50 percent of elementary school students there, and Lebanon’s unemployment rate has doubled [3] since 2011. States bordering conflict zones need much more help from the international community in assisting the world’s 60 million refugees. The World Bank estimates that refugee­hosting countries, principally Lebanon and Jordan, require $5.8 billion this year just to fill infrastructure needs; from water to health facilities, the countries’ facilities can hardly bear the strain of a surging population.

Certainly, refugees’ economic participation in host countries doesn’t mean that those places must become the permanent destination for the majority of refugees. Many hope to return home and many others will move on to a third country for permanent resettlement. Until then, though, the international community should recognize—and help mitigate—the demographic burden imposed on nations bordering the region’s conflicts. And in the longer term, unleashing the economic energies of displaced people is the best path to reducing the burden on host states, permanent or otherwise, and limiting the risk of radicalization, especially since refugees now typically spend 17 years in legal limbo.

Quality data on the economic activity of displaced populations is scarce, but growing research points in hopeful directions. In Cleveland, for example, the $4.8 million that local agencies spent resettling clients in 2012 returned about $48 million in economic impact [4], according to a study by Chmura Economics & Analytics. The firm said that refugees were more entrepreneurial and notched greater business success than natives, and their additional purchasing power often helps revitalize declining communities.

The European Union could also benefit from the influx [5] last year of 1.2 million asylum seekers, the International Monetary Fund’s Christine Lagarde said recently, citing research by fund economists. EU countries that manage to bring refugees into the workforce could add 0.2 percent to growth by 2020, according to Legarde, due to an expanded supply of labor as well as consumer
spending. In Europe’s slow­growth environment, that addition is significant, she said.

Clearly, context matters [6]: Jordan and Lebanon—small countries with limited resources and delicate demographic balances—face a greater challenge absorbing refugee populations than Europe or the United States did, for example, when it integrated 880,000 Vietnamese after the United States’ war in their country. But there are success stories outside of the advanced economies.

For example, Turkey, whose population is now about three percent Syrian, saw its economy expand four percent last year, according to the International Monetary Fund, which is roughly in line with recent years. Despite the refugee burden, meanwhile, the IMF expects Lebanon’s gross domestic product to grow one percent [7] this year and Jordan's to expand 3.2 percent [8]. Its true that international aid plays a role in stimulating that growth, but according to the United Nations, refugee assistance doesn’t come close to offsetting [9] the negative effects of the Syrian crisis.

In 2014, the University of Oxford Refugee Studies Centre looked at refugees’ economic life in Uganda [10], where displaced Somalis, Congolese, and others are allowed to work and do business. “Despite the remote location of rural refugee settlements, these sites are ‘nested’ in the local Ugandan economies, attracting goods, people, and capital from outside to their active internal markets,” the center reported. The study challenged “five popular myths” about refugees—that their economies are isolated and that they’re a burden, homogenous, technologically illiterate, and dependent on humanitarian assistance. The center’s director of


research, Alexander Betts, is among those advocating approaches [11] that would let displaced people work without threatening native employment. In Jordan, for example, underutilized special enterprise zones [12]one is located a few miles from Zaatari— could become job magnets for Syrian refugees and hubs for Jordanian, international, and fleeing Syrian companies.

Although that might work in Jordan [13], which hosts as many as a million Syrians, where the refugee tide is more modest, Uganda’s integration model may work better. Lebanon and to an extent Jordan should reform their labor laws to open opportunities for refugees while protecting locals. Analyzing labor markets for unmet needs and searching for gaps in goods and services that could be filled by refugees should be an urgent priority. That work might change the world’s entire approach to refugee assistance and, as the Oxford team put it, “turn humanitarian challenges into sustainable opportunities.”

A working group led by the U.S. Institute of Peace [14] for the Atlantic Council reached the same conclusion earlier this year as part of a multi­partner review of Middle East strategy. One way of overcoming the tensions between refugees and their host communities would be to establish a formal dialogue process to identify shared problems—job markets, labor laws, and wages, for instance—and find common solutions.

Lebanon, which hosts the biggest displaced population by percentage in the world, is an extreme example. None of its refugees live in camps. Half of working­age Syrian refugees there are “economically active,” according to the International Labor Organization. The IMF estimated that activity had increased the countrys labor supply by half at the end of 2014. But are refugees competing with Lebanese citizens? Probably not very much [15], a 2015 World Bank report concluded. Most are in low­ to semi­ skilled jobs in the informal sector. So Syrians and other foreign workers who held those jobs before the influx have borne the brunt of the new competition.

Syrians de facto access to the Lebanese labor market should be legalized in conjunction with a broader overhaul of the countrys labor laws to address existing gaps, As it is, foreign workers are restricted from some occupations where they might be useful, and there are other types of work where it might be more beneficial overall for Lebanese to be protected from the lower­wage competition of foreigners such as handymen, bakers or repair shop workers.


On the negative side, rents have risen drastically in the border regions and inflation has picked up. And illegal workers have driven down wages, while small businesses that decline to hire them face unfair competition from those that do.

More broadly, though, the economy has benefited in some ways. Syrians haven’t taken locals’ jobs, the reports writers said. Rather, they are doing work locals won’t, meeting the demand for unskilled labor and helping lure investment. Syrian merchants and investors, especially from the nation’s commercial capital, Aleppo, have moved to Turkey, boosting economic activity.

The problem of displacement isn’t going away, so it is time to make the best of it. It is difficult to convince people that the crisis could bring opportunity. But it can. With fresh thinking, more open discussion, and creative economic plans, people fleeing persecution and violence could be turned from burden to benefit.

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Source URL: https://www.foreignaffairs.com/articles/2016­09­21/risk­and­reward Links
[1] http://www.bbc.com/news/world­middle­east­35492705
[3] http://www.sciences­po.usj.edu.lb/pdf/The%20Syrian%20Crisis%20%20its%20Implications%20on%20Lebanon%20­%20Khalil%20Gebara.pdf
[12] https://www.foreignaffairs.com/articles/levant/2015­10­20/help­refugees­help­themselves
[14] http://www.usip.org/publications/2016/04/13/panel­urges­new­view­of­middle­east­refugees

[15] http://www­ wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/11/17/090224b0831c195c/1_0/Rendered/PDF/Lebanon0econom0000the0great0capture.pdf [16] http://www.orsam.org.tr/en/enUploads/Article/Files/201518_rapor195ing.pdf