Tuesday, July 12, 2016

Investing in countries of first refuge, in return for integrating refugees into their economy

The NY Times has a story about Jordan: If a Carrot for Jordan Works, Syrian Refugees Will Stay Put

"Jordan, which has 650,000 Syrian refugees registered with the United Nations inside its borders, has long made it nearly impossible for them to work legally, citing concerns about high unemployment among its citizens. But under the new experiment, the government has given out 13,000 work permits to Syrians, and is promising to issue up to 50,000 by year’s end — and tens of thousands more in the future.

"In exchange, the World Bank is giving Jordan a $300 million interest-free loan, the likes of which are traditionally reserved for extremely poor countries in Africa. Western nations, including the United States, have offered roughly $60 million to build schools to accommodate Syrian children. And Jordan is close to clinching what it wants most: tax-free exports to the European Union, especially garments stitched in its industrial export zones.

"In short, Western leaders are using their financial and political leverage to convince Jordan that it is worthwhile to help refugees improve their lot in this country so they do not cross the Mediterranean Sea in flimsy rafts in search of a better life in Europe. It is a stark shift for both donor countries and Jordan, which, after absorbing generations of refugees from wars across the Middle East, had tried to keep Syrians from establishing a permanent foothold.

“Some may say this is the one shot that the government has to extract a lot of money,” Stefan Dercon, a professor at Oxford University and the chief economist at the British government’s development aid agency, which supports the effort in Jordan. “I would say it is also the only shot that it will have to really reform its economy and create jobs, with substantial international funding.”

"Jordan is not the only country trying to leverage Europe’s anxiety about refugees and migrants. Turkey has negotiated a deal that involves taking back most of those who traveled across the Aegean Sea into Greece in exchange for $6.6 billion in European aid and a proposed waiver of visas for Turks entering Europe.

"Europe is also promising over $4 billion in aid to several African countries in exchange for their help in stemming the exodus out of the continent. Even Sudan, long under European and American sanctions for its human rights record, is reaping money as part of the package. Libya is getting assistance from Europe to keep migrant boats from crossing the Mediterranean, an approach that Human Rights Watch describes as outsourcing “the dirty work to Libyan forces.”
"The Jordan deal, announced in February as part of the Jordan Compact, is described optimistically by its framers as “turning the Syrian refugee crisis into a development opportunity.” Its goal is to draw new foreign investment and create jobs for both Jordanians and Syrians. The risk, its proponents privately point out, is that no new investments will pour in, Jordan’s economy will continue to languish and local resentment will grow.

"Until recently, barely 5,000 Syrian refugees had work permits. The International Labor Organization, a United Nations agency that supports and devises work policies, estimated that 50,000 people in Jordan worked off the books — roughly the number that the government is promising to legalize this year alone.

For Jordan’s leaders, grappling with debt and an economy growing at an anemic 2.4 percent, access to the European market is a critical incentive."

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