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Jordan, Lebanon Compacts Should Be Improved, Not Abandoned

The ‘jobs for refugees’ experiments in Jordan and Lebanon are the most promising approach for decades, say aid policy experts Cindy Huang and Nazanin Ash. They offer three ways to improve on disappointing early results.

Written by Cindy Huang, Nazanin Ash Published on Read time Approx. 6 minutes
Among thousands of informal tented settlements in Lebanon, this cluster of tents in Akkar, North Lebanon, is home to eight Syrian refugee families.

Since the Syrian conflict broke out in 2011, Jordan has absorbed more than 1 million refugees, straining its already limited resources. In 2016, world leaders looked beyond traditional humanitarian assistance and agreed to a new response: a compact between donors and the government of Jordan that would support infrastructure projects, employment opportunities and basic services that help meet the needs of refugees and their host communities over the longer term. The compact also included national policy changes to better enable refugees to become self-reliant, such as giving refugees the ability to work legally and attend public schools.

In December, Refugees Deeply published an investigative report on the response to the Syrian refugee crisis, with a focus on the Jordan Compact and a similarly constructed Lebanon Compact. The report put a spotlight on the complex and nuanced challenge of responding to protracted displacement, and highlighted challenges of both compacts, including a lack of meaningful progress for refugees and their host communities. The authors ultimately questioned whether compacts can succeed.

Early implementation of these compacts has undoubtedly revealed some shortcomings, and we too are concerned about slow progress. However, these agreements have nonetheless been game-changing – not only for the Syrian crisis, but also as a model for refugee response around the world. The Jordan and Lebanon Compacts should therefore be improved upon and learned from, not deserted. Abandoning these compacts or the model altogether would be a mistake.

Compacts are a uniquely suited framework for responding to today’s refugee crises. They offer a rare opportunity to tackle difficult policy conversations about refugees with host governments and donors. Compacts bring together a diverse group of stakeholders, pragmatically and inclusively, from host and donor countries to international organizations across the humanitarian and development divide, and put into action collaboration that too often remains rhetorical. They also bring together longer-term financing with multiyear planning, which is critical in today’s world where refugees are on average displaced for a decade and require more than temporary shelter, food, water and clothing. The compact model is the most promising approach we have seen to refugee response in recent decades, especially when it comes to sustainable solutions; it enables refugees to become net contributors to host communities, rather than reliant on aid year after year.

It is in this spirit that we offer two things to keep in mind when assessing progress to date, and a set of recommendations to consider in future compact design. We focus on Jordan because it is where we have seen the greatest progress in implementation; although there are lessons to draw from Lebanon, many of the constraints there are specific to the country and its politics, leading to a unique set of suggested improvements.

Slow (but Real) Progress Against Endemic Challenges

To understand the pace of progress for refugee compacts, we need to recognize the very real and acute difficulties in creating livelihood opportunities, as well as in making agreements on refugees’ access to the labor market. There are very few examples of generous (or even sufficient) right-to-work policies for refugees. Even after becoming eligible to work legally, refugees often still face challenges to obtaining a decent and fair job, including burdensome work-permit processes and the possible loss of other benefits once a permit is granted, lack of knowledge about what jobs are available, restrictions on formalizing home businesses, the desire to work within a reasonable distance from home and the need for childcare.

The Jordan Compact’s focus on improving labor market access for refugees in host countries with such significant refugee numbers, tough economic environments and a sensitive host population is no easy feat. While we should focus on results, breaking ground against tough policy decisions is important progress.

These compact agreements, and broader World Bank funding, are catalyzing unprecedented changes in refugee policy. Although too many sectors in Jordan remain closed to Syrian refugees, there has been some movement in expanding subsectors in which they can work, and what positions they can hold. Eighteen new subsectors in the manufacturing industry were opened to non-Jordanians, including refugees, in June 2017. Portability was added to work permits in construction and agriculture in August 2017, allowing refugees to freely move between employers rather than being bound to one as their sole sponsor. The government has made adjustments, albeit minor ones, to various aspects of the work formalization and permit process. While still insufficient, these small changes have demonstrated that the government is open to policy reform – and there is room to improve more toward bigger gains.

Building Compacts for the Long Haul

Compact agreements are, by design, longer-term approaches that should remain flexible and responsive to changing realities in the host country. But this long-term focus means evidence of success will naturally be slower to appear. And progress, particularly on policy change, may very well be made up of small steps forward that build on each other over months and years.

Jordan has seen small wins – such as portable work permits in agriculture and construction, and reduced or waived permit fees for refugees – that can pave the way for future, bigger policy changes. Evidenced also in the Special Economic Zones (SEZs), a policy change allowed companies to qualify for preferential access to export to the E.U. market by hiring a certain share of Syrian refugees in an individual factory line, rather than having to meet the hiring quota throughout the entire factory. Positive steps by the government now can build the foundation for more ambitious policy reform later.

A Smarter Design Is Still Needed

There are three ways future compacts can be improved, drawing on the lessons learned from the Jordan Compact experience.

We need to get the incentives for refugee inclusion right by measuring what matters. All interventions should be geared toward achieving a set of outcomes for refugees and their hosts, like job creation and income growth. Standard analysis to identify barriers in the economy that affect refugees and citizens alike can save time and spur success over the long run, especially by identifying policy reforms needed to achieve those outcomes. Policy dialogues and subsequent change is tough, but there is agreement across the board that it is necessary, and it is the crux of delivering benefits to refugees and citizens more broadly.

Do not repeat the mistakes of the past: Review the data and evidence of what has worked – and what has not. In the Jordan example, some evidence indicates that formalizing and giving small capital injections to home-based business would lead to faster results at a greater scale for refugees and host economies. Other evidence suggests that SEZs can further entrench existing inequalities and that jobs in SEZs can pose risks to workers’ health and safety. And surveys among refugees found that many may not be willing or able to travel to the zones, even if jobs were made available. Considering this evidence from the start could have led to a greater investment in formalizing home-based businesses, rather than getting SEZs up and running. The World Bank and UNHCR’s joint data center demonstrates a recognition that data need to be improved for a better response; both institutions should consider expanding their effort to also identify and address evidence gaps.

The compact should engage partners, especially refugees, in designing solutions. Early and periodic consultation, and inclusion in decision-making, are critical to making sure agreed-on solutions meet the real needs of refugees and host communities. There are many constraints to refugees finding and engaging in formal work, such as lack of information about how having a work permit will or won’t affect other benefits and fear of traveling to a job far from home. A further challenge is that many Jordanian businesses are informal; although they may be willing to hire refugees, they likely will not sponsor refugees in the work permit process. The Jordan Compact has demonstrated that when determining solutions, host countries and international actors must understand refugees’ needs and the constraints that prevent them from being self-reliant. A robust multistakeholder engagement process, led by the host government, could have raised and addressed these realities from the get-go to enable solutions to materialize more quickly.

Despite an imperfect start, the Jordan Compact is a historic step and one worth sticking with. Rather than turn our backs on compact agreements, we can learn from this challenging start to improve them and, ultimately, the lives and livelihoods of both refugee and host communities in Jordan and beyond.

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

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