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Economic Impacts of Syrian Refugees Existing Research Review & Key

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Economic Impacts of Syrian Refugees Existing Research Review & Key Economic Impacts of Syrian Refugees Existing Research Review & Key Takeaways Introduction As a part of the IRC’s ongoing work providing durable As the International Labour Organization (ILO) points economic solutions to refugee, internally displaced out, “the scale of the influx, and the consequent (IDP) and host communities affected by the Syria economic difficulties faced by both Syrians and the host Crisis, the IRC will produce a series of briefs and communities makes access to employment a pressing reports that bring together the most up to date issue.”3 research, programming best practices and policy This brief aims to synthesize the wealth of existing recommendations for sustainable livelihoods and research to illuminate some key points emerging in the inclusive economic development. debate. The IRC believes that a thorough The Syria crisis has presented the international understanding of the evidence will help policymakers community with an overwhelming challenge. As of and humanitarian actors design effective policies and December 2015, UNHCR had registered over 4.39 programmes to address the urgent need for access to million Syrian refugees1 (meeting the definition of a safe work both for Syrian refugees and the most ‘protracted refugee situation’)2, with most residing in vulnerable host communities. Lebanon, Jordan, Turkey and Iraq. Key issues emerging from the research One of the most discussed, debated and researched to date issues has been the impact of Syrian refugees on the labour markets of host communities. On one side, there The following key issues emerge from IRC’s review of is a stance and data demonstrating the influx of Syrian available qualitative research, quantitative data and refugees has stimulated host economies in the midst of public commentary examining the impact of Syrian a regional economic downturn, by providing labour and refugees on host community labour markets. Below is a purchasing power. Conversely, data also suggests that summary of several key themes and takeaways. the large influx of refugees has negatively affected the labour market with increased competition for jobs and Syrian labour has been a feature of host labour downward pressure on wages. The size of the informal markets for decades. In some countries, job economy in the region makes it difficult to accurately competition is primarily between Syrian refugees and assess the true impacts on regional economies; migrant workers, not host communities. Across the however, as Syrian displacement becomes protracted, region, however, the recent influx has contributed to a understanding how host communities can maximize the driving down of wages. presence of Syrian refugees to benefit local economies, Syrian workers have been part of the region’s migrant while at the same time protecting the host countries’ labour pool since well before the conflict, in particular in most vulnerable people, is increasingly urgent. Lebanon and Jordan, attracted by the draw of higher Responses to the crisis have not adequately addressed wages and proximity to Syria. Around 160,000 Syrian the ongoing needs of refugees and the communities in migrant workers were in Jordan before the outbreak of 4 which they have settled, for example by providing the war while in Lebanon estimates fluctuate between employment and regular income-earning opportunities. 1 http://data.unhcr.org/syrianrefugees/regional.php 3 See, ILO Child Labour in the Urban Informal Sector, Jordan (Amman, Mafraq 2 Protracted Refugee Situations (PRS) are situations where refugees have been and Irbid), 2014, available at: in exile ‘for 5 years or more after their initial displacement, without immediate http://www.ilo.org/beirut/publications/WCMS_246207/lang--en/index.htm, p. 18 prospects for implementation of durable solutions’ (UNHCR 2004, ExCom) 4 Access to work for Syrian Refugees in Jordan: A discussion paper on labour and refugee laws and policies From Harm To Home | Rescue.org Policy Brief: Impact of Syrian Refugees on Host Communities 2 200,000 and 1 million.5 In 1991, a bilateral agreement undignified or poorly paid. 12 In other cases, however, for Economic and Social Cooperation and Coordination competition between Syrian refugees and host was signed between Lebanon and Syria, removing labourers is a real concern. In Lebanon, which has movement restrictions and granting freedom to stay, historically seen higher volumes of nationals work and practice economic activity on the basis of participating in informal markets, the ILO has found that reciprocity.6 In Jordan, Syrian migrant worker “competition over job opportunities is one of the most, if arrangements were formalized in 2001 when the two not the most, urgent challenges facing host governments signed a workforce cooperation communities”.13 agreement allowing labour migration between the two The research finds that, whether in competition with countries.7 other migrants or with the host labour market, the influx A key finding from the research is that, in some host of Syrian refugees in local labour markets has countries, Syrian refugees are predominately in significantly driven down wages and negatively affected competition for jobs with other migrant workers and working conditions, especially in informal labour much less so with host communities. For example, in sectors. The ILO study on the effect of Syrian refugees Jordan, a study looking at the impact of Syrian on local labour markets finds that “Syrian workers are refugees on the Jordanian labour market in Amman, accepting lower incomes, work for longer hours and Irbid and Mafraq, conducted by ILO, FAFO Research without social benefits; this has led to decreasing Foundation8 and the Jordanian Department of wages and a reduction of job opportunities” for all Statistics, found that instances of Syrian refugees employees.14 ‘crowding out’ Jordanians from work in most sectors Key takeaways: were modest.9 This is due in a large part to the fact that the vast majority of Syrian refugees who find work do ñ Syrian refugees predominately work in the large so in the large informal economies characteristic of the informal markets of host communities. 10 region’s host countries. Agriculture, construction, food ñ These markets have been served by migrant services and retail dominate the informal labour market, workers, including Syrian workers, long before the and are all sectors not typically attractive to the majority influx of Syrian refugees. of host workers.11 Reliance on migrant workers is ñ As a result of historical trends as well as recent therefore necessary as a growing educated labour host government policies and practices further force refuses to engage in certain sectors seen to be 5 The lack of a precise figure is due to the fact there are no published official investment, education, labour and social protection policies’, available at: statistics. In 1992 the Council for Development and Reconstruction estimated http://documents.worldbank.org/curated/en/2012/12/17464894/lebanon-good- 200,000 Syrians were working in Lebanon, while in 1995 UNDP estimated jobs-needed-role-macro-investment-education-labor-social-protection-policies- 450,000. The General Security Service in Lebanon estimated that between the miles-multi-year-technical-cooperation-program. In Jordan, it is estimated that beginning of 1993 and 1995 around 1.6 million Syrian workers entered Lebanon. 44% of the labour market is informal. See; ‘The Informal Sector in the Jordanian 6 See the Agreement for Economic and Social Cooperation and Coordination Economy’; available at: between the Lebanese Republic and the Syrian Arab Republic, available at: http://www.undp.org/content/dam/jordan/docs/Publications/Gov/The%20Informal http://www.syrleb.org/docs/agreements/03SOCIAL_ECONOMICeng.pdf %20Sector%20in%20the%20Jordanian%20Economy-jo.pdf. In Jordan, ILO 7 Jordan’s Agreements website, “Agreement of Workforce Cooperation between estimates that of the Syrian refugees who are employed, 99% are working the Government of the Hashemite Kingdom of Jordan and the Government of the informally, see http://www.ilo.org/beirut/media-centre/news/WCMS_369592/lang- Syrian Arab Republic”. In addition, Jordan and Syria have entered a number of -en/index.htm bilateral agreements which are related to free trade and economic cooperation. 11 Employer Perspective on the Jordanian Labor Force, Creative Associates 8 FAFO is an independent and multidisciplinary research foundation focusing on International and the American Chamber of Commerce, March 3, 2014 social welfare and trade policy, labour and living conditions, public health, 12 Employer Perspective on the Jordanian Labour Force, Creative Associates migration and integration, and transnational security and development issues. See: International and the American Chamber of Commerce, March 3, 2014. http://www.nifu.no/en/institutes/forskningsstiftelsen-fafo/ 13 ILO, “Assessment of the Impact of Syrian Refugees in Lebanon and Their 9 See, Stave and Hillesund, Impact of Syrian Refugees on the Jordanian Labour Employment Profile,” 2013, available at: Market, available at; http://www.ilo.org/wcmsp5/groups/public/---arabstates/---ro- http://www.ilo.org/beirut/publications/WCMS_240134/lang--en/index.htm beirut/documents /publication/wcms_364162.pdf, p. 8 14 Ibid. 10 In Lebanon for example, 50% of Lebanese employees work in the informal labour market. See, ‘Lebanon – Good jobs needed: the role of macro, From Harm To Home | Rescue.org Policy Brief: Impact of Syrian Refugees on Host Communities
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