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How Not to Fix the Refugee Crisis – A Response to ‘Refuge’

Comparative advantage is the wrong theory for refugee protection, says political economy professor Behzad Yaghmaian, warning that Alexander Betts’ and Paul Collier’s new book ‘Refuge’ could exacerbate the very problem it is trying to solve.

Written by Behzad Yaghmaian Published on Read time Approx. 5 minutes
Jordan syria un refugees
Syrian refugees at Zaatari camp in Jordan on March 28, 2017. AFP/THOMAS COEX

“Refuge,” a new book by Alexander Betts and Paul Collier, promises a groundbreaking and novel plan to fix our broken refugee system. Betts and Collier propose using global capitalism to bring autonomy, dignity and empowerment to refugees.

Hardly anyone would object to placing the autonomy and dignity of the refugee at the heart of refugee protection. The primary problem with “Refuge” is its overall theoretical approach to refugee protection and its plan of action.

The book’s principal ideas will not only fail to bring us any closer to refugee autonomy and dignity, they could potentially exacerbate the very problem “Refuge” seeks to solve.

Comparative Advantage

The refugee protection model presented by Betts and Collier is based on an old international trade theory, the so-called comparative advantage. The basic premise of the theory is that countries must specialize in the production and export of commodities in which they have a comparative advantage. Free trade based on comparative advantage results in a win-win situation for all, increasing production, consumption and welfare.

Based on this theory, Western economists advised poor developing countries to specialize in the production and export of labor and resource-intensive commodities in return for importing capital and technology-intensive commodities from rich industrialized countries.

Many development economists and policy makers view comparative advantage as a trap for developing countries. Boxing them into primary goods production, they lose the opportunity to industrialize and gain the technological know-how and capital needed for their development.

After World War II, many developing countries defied the principle of comparative advantage and free trade and began locally producing what they were recommended to import from rich states. South Korea, China and Brazil, just to name a few, succeeded in building the industrial basis that eventually made them new economic powerhouses.

Old Model, New Application

Now, Betts and Collier propose a model of refugee protection using comparative advantage. Rich Western states have a comparative advantage based on their relative abundance of capital and technology, they argue. Developing countries, home to 90 percent of world’s refugees, have a comparative advantage based on their spatial and cultural proximity to the countries of origin of the refugees.

There lies the basis of a win-win solution to the refugee crisis. The rich Western states provide the host countries with technology, development funding (aid and loans), and preferential trade agreements. In return, developing countries become “safe havens” for refugees, exporting to the West commodities produced with refugee labor. Rich states are transformed into donors, and poor states into safe havens.

Their proposal will worsen the refugee crisis we currently face. This is how.

According to Betts and Collier, countries in the global south are designated the role of providing space for refugee protection in return for funding from rich Western states. Any attempt by rich states to be a haven for refugees rather than a source of funding minimizes refugee protection and creates crisis and unnecessary death, according to their argument.

“Refuge” therefore theorizes and legitimizes the end of resettlement by rich Western states and the warehousing of displaced people in countries’ neighboring conflict zones. It provides a convenient strategy for Western countries that have been doing everything possible to keep refugees and migrants out. Apart from cases of “symbolic” resettlement, Betts’ and Collier’s proposal relieves Western states of the responsibility of receiving, protecting and integrating refugees and others in need of protection.

Instead of being a win-win for all, it results in a structural win for rich states, and a losing outcome for host countries and refugees.

Like its original application in international trade, it is a Eurocentric theory, designed to maximize and protect the interests of rich Western states. Countries in the global south will be forced to accept all the economic, social and political consequences of housing a large number of refugees, institutionalizing the current unfair distribution of refugee responsibilities.

Misdiagnosis

The proposal inRefuge” is based on a misdiagnosis of the European crisis over refugees.

Betts and Collier argue that more than a million people risked their lives to reach Europe in 2015, largely as a consequence of Merkel’s “headless heart,” her decision that summer to effectively open the door to Syrian refugees. Germany deviated from its comparative advantage and its role as a donor. By assuming the role of a haven, Germany created an attractive pull factor with tragic consequences.

“An offer of refuge to people from much poorer countries effectively turn refugees to economic migrants,” write Betts and Collier.

The use of the much disputed and artificial distinction between refugees and economic migrants is highly problematic here. The drivers behind people’s movement and willingness to take risk are more complex than Betts and Collier portray.

Displaced people leave their first place of asylum, taking huge risks and endangering the lives of their families, because of the failures of host countries to provide them with economic, political, and social security.

The majority of the current “havens” in the south are riddled with political violence, and economic and social insecurity. To Syrians and other refugees, Germany and the West offered a perceived possibility for safety, good jobs, education and healthcare, and ultimately citizenship in a real safe haven with legal protection.

Refugees will continue to cross the sea as long as the protection gap between rich Western states and refugee-hosting countries remains. Betts and Collier fail to present a viable mechanism for closing this gap, instead focusing on pull factors and oversimplifying why people fled Syria’s neighbors to reach Europe.

Special Economic Zones

“Refuge” presents a solution to the crisis – setting up Special Economic Zones (SEZs) that provide jobs for refugees and attract international investment with special regulations. Their prize project is the so-called “Jordan Compact,” a pilot launched in February 2016 to create 200,000 jobs for Syrian refugees in Jordan in five years.

It is highly unlikely that SEZs in Jordan or elsewhere in the global south can offer the security that refugees aspire to. SEZs have been long criticized for their violation of the labor rights and human rights of their employees. Without legally institutionalized respect for workers’ rights, a job at an SEZ is a pathway to more abuse and exploitation.

Yet Betts and Collier are largely silent on this issue, noting only: “Given the combination of international-organization oversight, media scrutiny and the reputational concerns of large corporations, the risk of abuse is remote.”

At best, SEZs can offer jobs to a negligible fraction of the 21 million refugees around the world and alleviate some pain for them and their families. But these jobs do not lead to refugee protection, autonomy and dignity, and empowerment.

Given the dire conditions facing refugees in Jordan and elsewhere, some refugees will take the SEZ job opportunities despite low wages and abusive practices. Yet refugees trapped in these conditions will take any opportunity to travel to other countries where they are not exploited.

The comparative advantage approach seeks to stop them from doing so, eliminating their chance to escape the protection deficit in their current host countries.

Betts and Collier have provided us with a timely opportunity to discuss some real problems in refugee protection. “Refuge,” however, is not the pathway to autonomy, dignity and empowerment for the refugees.

Read Alexander Betts’ earlier article on Refugees Deeply: U.N. Refugee Agency Must Change Course or Risk Obsolescence.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Refugees Deeply.

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