Transforming the role of refugees in host economies

The Refugee Economies Programme carried out participatory, mixed methods research in Uganda, Kenya and Ethiopia to explore the determinants of refugees’ welfare outcomes; social cohesion with host communities; and mobility and residency choice. 

The research began with a pilot study in Uganda, the first study to systematically examine the economic contributions of refugees to a developing country. The researchers focused on Uganda because, unlike most developing host countries, it allows refugees the right to work and freedom of movement. The qualitative and quantitative research included a survey of over 1,500 refugees in both camps and urban areas. The approach was pioneering in recruiting and training refugees and host communities themselves as peer researchers and enumerators, enabling the project to have a positive benefit to the community. 

The research in Uganda challenged many assumptions widely held by aid agencies as to the essentially dependent economic lives of refugees. In contrast, it was found that: 

• Refugees often make a positive contribution to the host state economy. 
• Refugees are networked within settlements, nationally, and transnationally. 
• Refugees are economically diverse and there is significant inequality among them. 
• Refugees are users of, and sometimes creators of, technology. 
• Although many refugees receive humanitarian assistance, most are more dependent on other social relationships, aspire to receive other forms of support, and in many cases create sustainable livelihood opportunities for themselves. 

This pilot study was later extended to include Kenya and Ethiopia. Since 2017, with funding from the IKEA Foundation, the researchers have constructed the first ever panel data set on the economic lives of refugees, following 16,000 refugees and host community members across camps and cities in the three countries. The additional countries were chosen to permit comparison of economic outcomes for refugees and host communities across cases with more and less inclusive policies. 

The results of the Uganda research had enormous impact within the region and eventually across the world. 

Building on the Uganda experience to transform policymaking and capacity building in the region

Professor Betts presented the Uganda findings at the UN General Assembly in September 2016 on a panel that included the Ugandan Minister for Refugees and the UN Secretary-General. 

The Ugandan government also presented this research at the World Humanitarian Summit in May 2016. In response to the research, the Ugandan government worked with the UN High Commission for Refugees and the World Bank to develop a new multi-year livelihood strategy for refugees, including a focus on the market-based opportunities highlighted by the research, which will benefit over 100,000 refugees. 

This led to the UNHCR and the World Bank jointly publishing a 2016 report, titled An Assessment of Uganda's Progressive Approach to Refugee Management, in which one of the conclusions is that “[a] shift in the philosophy of refugee assistance is also crucial: refugees should be viewed as economic actors in charge of their destiny”. 

The Office of the Prime Minister of Uganda praised the research for providing a previously unavailable evidence base while the then-Deputy High Commissioner for Refugees stated that the work had been transformative for the way in which policymakers understand the contribution refugees can make. 

In July 2018, Professor Betts co-organised a visit of World Economic Forum (WEF) Young Global Leaders (YGLs) to the Kakuma refugee camp in Kenya. The group included government ministers, company CEOs, and journalists. The visit culminated in the creation of a new WEF initiative to support public-private partnership for refugees, launched in Davos at the WEF Annual Meeting, at which Professor Betts presented his work. In July 2019, this in turn led to him co-organising the first ever Executive Leadership course in a refugee camp, in Kakuma, in collaboration with the WEF and UNHCR for 30 refugee entrepreneurs, who subsequently embarked on a virtual mentorship programme pairing them with YGLs from around the world. 

The “Jordan Compact” 

Aware of the Uganda research, the Jordanian royal family invited Professor Betts and Professor Paul Collier of the Blavatnik School of Government to explore ways to include Syrian refugees in Jordanian labour markets. Based on the Uganda research, they proposed allowing Syrians to work in Jordan’s existing Special Economic Zones (SEZs); previously refugees had not been permitted to take any employment. Professors Betts and Collier presented the model to the Jordanian royal family, senior cabinet ministers, and relevant UN agencies in Amman in April 2015 and subsequently drafted a white paper for the Jordanian government. 

In September 2015, King Abdullah presented the ideas in the white paper to then-UK Prime Minister David Cameron, and the model was adopted and developed by DFID, forming the basis of the so-called “Jordan Compact”, an agreement between the Jordanian government, the World Bank, and the European Union, reached in February 2016. The compact states that it “allow[s] Syrian refugees to apply for work permits both inside and outside of the zones…Syrian refugees will be allowed by the summer to formalise their existing businesses and to set up new, tax-generating businesses, including access to investor residencies, in accordance with the existing laws and regulations”. 

In 2016, the European Commission agreed to grant Jordan market access to encourage firms to produce there, as recommended in the white paper – its first ever refugee-related trade concession. The Jordan Compact led to work permits being provided to over 180,000 Syrian refugees. IKEA and Walmart as well as Syrian companies have invested in the 18 special economic zones in which refugees are now employed. In just one example, in the Sahab Economic Zone, the Al Fayhaa Plastics Company employs 82 refugees among its 313 staff, with 40% of its sales being exports to the EU under the Jordan Compact. 

Expanding international policy support for refugee economies 

Jordan was the first case ever of the World Bank funding a middle-income country to host refugees. Soon afterwards, in 2016 the “Jordan model” was adopted by Ethiopia. The research was presented to the World Bank  and the Bank subsequently created a new $2 billion fund to support other refugee haven countries, initially 12 in Africa and two in Asia. Priority areas for the funding included to "promote refugee's welfare and inclusion in the host country's socio-economic structures" and support "formal labor force participation".