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Evidence brief for policy |2020

Impact of COVID-19 on Syrian refugees and host communities in Jordan and

and enterprises. Lessons learnt and The COVID-19 pandemic has claimed recommendations are presented for the lives of half a million people governments, donors and globally and continues to cause development partners to support devastating social and economic design and adaptations of disruptions. In Arab States, hosting employment interventions and large numbers of Syrian refugees, the policies to address the current crisis pandemic has added new challenges more effectively. for vulnerable people resulting in difficulties of sustaining livelihoods and limiting access to sources of Key Questions income. 1. What were the employment Evidence on how the pandemic affects workers and their employers and working conditions of is beginning to emerge as the Syrian refugees and host starts to grapple with the effects communities prior to the from the restrictions put in place to COVID-19 pandemic? mitigate the spread of the virus. The 2. How does the COVID-19 International labour Organization pandemic and related (ILO) is currently leading a regional initiativei aimed at assessing the mitigating measures impact impact of COVID-19 on workers and employment, household enterprises in three Arab States: , income and protection at work Jordan and Lebanon. places? This brief provides an overview of 3. What type of support do ii evidence on the impact of the individuals, households and pandemic on Syrian refugees and business enterprises need to host communities in Jordan and Lebanon to shed light on some of the minimize the consequences of most pressing issues facing workers the pandemic?

Evidence for policy brief: Impacts of COVID-19 on Syrian refugees and host communities in Jordan and Lebanon

Basis for evidence Working conditions prior to COVID-19 The assessments are based on telephone The assessments reveal a high degree of surveys carried out during April-June 2020. informal employment among Syrian refugees The surveys addressed the employment in Jordan and Lebanon. status of individuals before and during the In Lebanon, twelve per cent of the surveyed lockdown, implications of COVID-19 and Lebanese workers were employed in related measures on their livelihoods; as well agriculture, while 11 per cent were employed coping and adaptive mechanisms taken by in construction and 28 per cent in trade/ individuals and their families to deal with the repair industry/ other services. In addition, crisis. The assessments also address the eight per cent were employed in the effects of the pandemic on small-scale accommodation and food service industry. businesses, their coping strategies and Around one-third (35 per cent) of employed business prospects. Syrian refugees worked in the agricultural The assessments address individuals and sector, while 19 per cent were employed in enterprises that have received support or construction and a total of 20 per cent in retail participated in programmes and project trade/ repair industry/ other services. schemes implemented by the ILO or the Further, half of all surveyed workers in collaborating development and Lebanon had seasonal, temporary and humanitarian organizations that have otherwise irregular employment. Only two participated in the assessments. This implies per cent of the surveyed Syrian refugees had that the assessments describe the economic social security compared to 14 per cent of the and livelihoods situation of relatively surveyed Lebanese workers, who said they vulnerable individuals and enterprises in the had social security coverage through their labour markets, and that the samples do not employers. Almost two-thirds of the workers represent the national labour market as a did not have any health insurance coverage. whole. Yet, studying populations supported This is alarming considering the indecent by humanitarian and development working conditions often found in the organizations provide valuable insights to informal sector. Moreover, 95 per cent of the interventions and policies needed in times of employed Syrian refugees lacked valid work crises. permits in Lebanon, indicating that the The current assessments are based on the majority of them work informally. following sample sizes. In Jordan, most of the respondents were . Jordan: 1,580 Jordanian and Syrian working in the manufacturing sector (31 per workers and 1,190 enterprises cent), followed by construction (23 per cent). . Lebanon: 1,987 Lebanese and Syrian The majority of Jordanians were working in workers and 363 enterprises the manufacturing sector (41 per cent), while most (37 per cent) were employed in The ILO and Fafo Institute for Labour and the construction sector – although 41 per cent Social Research (Fafo) are currently finalizing of the employed Syrian women were working a similar assessment in Iraq, which will in the manufacturing sector. provide further evidence for policy purposes. Informal employment was found to be widespread in Jordan, mainly among Syrian refugees. The level of informal employment is

Evidence for policy brief: Impacts of COVID-19 on Syrian refugees and host communities in Jordan and Lebanon

2 exhibited by the type of employment informality, such as construction, agriculture contract, duration of contract, and social and services. Consequently, the type of work security coverage that the workers have. that Syrian refugees are able to access in the Fifty-five per cent of surveyed workers in labour market are limited and informal. Jordan reported that they had short term Impacts of COVID-19 on employment employment agreements (temporary, seasonal, or irregular). The precarious type of In Lebanon, the COVID-19 crisis has resulted work including temporary, seasonal and in a high number of permanent and irregular, is more prevalent among Syrians temporary job lay-offs, particularly among (69 per cent) compared to Jordanians. About informal workers. The majority of the 39 per cent of the employed respondents respondents in Lebanon (84 per cent) were reported that they only had verbal permanently or temporarily laid-off as a agreements with their employers, while 4 per result of the COVID-19 crisis. Sixty per cent of cent had neither a written nor a verbal the Syrian refugees were permanently laid-off agreement with their employers. The level of and 31 per cent were temporarily laid-off. The informal employment is higher among Syrian corresponding figures for Lebanese workers refugees (52 per cent) than among were 39 per cent and 38 per cent, respectively. Jordanians (35 per cent). Social security Only 11 per cent of the respondents reported coverage for Syrians is limited to only 24 per that they had worked during the lockdown. cent, while 63 per cent of Jordanians reported The largest share of Lebanese workers to have social security coverage facilitated by permanently laid-off from their jobs were their employer. Health insurance coverage for those employed in the construction sector (50 Syrian workers was 15 per cent, compared to per cent), while most Syrians who have been 42 per cent of the Jordanian workers. Only 30 permanently laid-off from their jobs were in per cent of the surveyed Syrians had valid agriculture (66) and construction (72 per work permits. There is substantial disparity cent). This may be explained by the irregular on work permit ownership across male and and casual nature of work in these sectors. female respondents, with 21 per cent of Higher lay-off rates were found among females having a valid work permit, workers who lacked written contracts, as well compared to 38 per cent of the male as among independent and self-employed respondents. Furthermore, the percentage of workers. While only 24 per cent of the female respondents who never had a work Lebanese workers who had written contracts permit is 60 per cent compared to 40 per cent prior to the lockdown have been permanently of the men. laid-off, 50 and 33 per cent of those who have The presence of informal employment among no contracts or just verbal work agreements, Syrian refugees are primarily explained by the respectively, have been permanently laid-off structural constraints that they face in the from their jobs. This again reflects that labour market. In Lebanon, the majority of vulnerability in the labour market is linked to Syrians are working without any work informality. permits, and hence they are unable to access In Jordan, one-third of the Syrian workers had formal jobs. In Jordan, where a relatively lost their jobs permanently due to the crisis. flexible work permit system exists, Syrian While 35 per cent of all Syrians who were in refugees are still only allowed to work in employment before the crisis lost their jobs restricted occupations and sectors that are permanently, only 17 per cent of Jordanian often characterized by a high degree of

Evidence for policy brief: Impacts of COVID-19 on Syrian refugees and host communities in Jordan and Lebanon

3 workers reported to have been permanently (52 per cent). The remaining 5 per cent of the dismissed. The majority of those who respondents had their wage rates reduced by reported to be unemployed prior to the crisis the employers. stated that they continued to be unemployed Prior to the lockdown in Jordan, the average (92 per cent) during the crisis, while the monthly income during the past 12 months remaining (8 per cent) reported that they had been 368 Jordanian were no longer looking for work. (approximately USD 519), while the average Further, workers with a written contract have income in March 2020 was reduced to 215 lower anticipation of losing their jobs (40 per Jordanian Dinars (approximately USD 303). cent) compared to those with a verbal This decline in income was attributed to agreement (57 per cent) or no contract (59 per reduced working hours as well as some cent). Similarly, more workers with irregular workers being dismissed from their work on a types of employment (59 per cent) are permanent basis. Income loss is more concerned about the risks of losing their jobs pronounced for Syrian refugees; whose as a result of the on-going crisis. This again average income fell below the set monthly highlights the fact that workers in informal minimum wage of 220 Jordanian Dinars employment are most vulnerable and most (approximately USD 310). This is partly affected by the crisis. explained by the temporary nature of work agreements obtained by large shares of These findings illustrate that workers in Syrian workers. informal work arrangements have been impacted the most from the crisis. In Jordan, there is a considerable decrease in Employment formalised through written household income, mainly among Syrian contracts plays an important role in times of refugees working in informal arrangements; a crises by reducing the vulnerability of workers substantial number of workers (92 per cent) from losing their jobs - be it temporarily or on reported that their household income had a permanent basis. This becomes even more decreased due to the crisis brought about by important for refugee populations already the coronavirus. This is particularly experiencing challenges in finding stable pronounced among Syrian respondents, of work to sustain themselves and their families. whom 95 per cent reported a decline in household income. For those individuals with Reduction in household income verbal employment agreements, 97 per cent The visible effects of lockdown measures claimed that their income has declined as a include reduction and losses in wage income result of the coronavirus crisis. This implies for the surveyed workers in Jordan and that the COVID-19 pandemic substantially Lebanon. affects household income and more In Lebanon, the results show that income in proportionately those households whose March 2020 decreased by more than two- members are working in informal thirds for both Lebanese and Syrian workers, arrangements. compared to their average monthly income in Limited protection to workers the previous 12 months. Ninety-four per cent Large discrepancies were reported on of the employed respondents from both measures taken in workplaces to mitigate the nationalities reported large wage reductions. risk of infection. Cuts in wage incomes were mainly due to lay- offs (43 per cent) and reduced working hours

Evidence for policy brief: Impacts of COVID-19 on Syrian refugees and host communities in Jordan and Lebanon

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In Lebanon, thirty-seven per cent of the difference may be explained by the fact that a Syrian workers reported that no measures relatively large portion of Lebanese women were introduced at their workplaces to work in the health and education sectors, mitigate the risk of infection, compared to 9 which are relatively better protected per cent of the Lebanese workers. While 80 compared to most other sectors. Syrian men per cent of the Lebanese workers reported and women were equally concerned about that disinfection measures were introduced losing their jobs. in their workplaces, only 37 per cent of the In Jordan, almost half of the employed Syrians reported the same. Similar respondents (48 per cent) anticipate that they discrepancies between Lebanese and Syrians might lose their jobs in the coming months if apply to other measures, including regular the measures imposed to mitigate the COVID- handwashing, the provision of protection 19 virus stay in place. Syrians have somewhat equipment (face masks), enforced stronger anticipation of losing their jobs (52 regulations for social distancing, and reduced per cent) compared to Jordanian workers (45 sizes of gatherings. Few measures were taken per cent). Surveyed workers with written in the manufacturing sector. The highest contracts have lower anticipation of losing number of measures was found in workplaces their jobs (40 per cent) compared to those where written work contracts are common. with verbal agreement (57 per cent) or no In Jordan, disinfection of work areas was the contract (59 per cent). Similarly, more most common measure taken at workplaces workers with irregular types of employment where the surveyed workers were employed. (59 per cent) are concerned about the risks of However, about 21 per cent of the losing their jobs because of the crisis. This respondents indicated that no measures have highlights the fact that workers in informal been taken at their place of work. This figure employment are most vulnerable and most is even higher among respondents with affected by the crisis. verbal employment agreements. In Lebanon, prior to the lockdown, only one- Furthermore, 29 per cent of the Syrian third of the surveyed enterprises reported respondents reported that no measures have that they were profitable, reflecting the been taken at their place of work, compared realities of the economic crisis that was to 15 per cent of the Jordanian workers. already affecting the at the time. These findings indicate that Syrian refugees Forty per cent of the enterprises reported that are working in difficult conditions they were breaking even, while 26 per cent of characterized by lack of Occupational Safety the enterprises were operating at a loss. This and Health (OSH) measures. pattern was quite similar for all enterprises regardless of size. Forty-three per cent of all Grim prospects for individuals, households enterprises in the sample had some type of and enterprises financial commitment prior to the lockdown; In Lebanon, more than 60 per cent of all 20 per cent had bank loans; and 13 per cent employed respondents expressed that they had micro-finance loans. The load of financial were concerned about losing their jobs in the commitments increased with the size of the coming months due to the COVID-19 enterprises. pandemic. More Syrians (72 per cent) than Lebanese (52 per cent) had such concerns, as The COVID-19 crisis has further worsened the well as more Lebanese men (56 per cent) than economic crisis for enterprises in Lebanon. Lebanese women (46 per cent). This About half of the enterprises in the sample (51

Evidence for policy brief: Impacts of COVID-19 on Syrian refugees and host communities in Jordan and Lebanon

5 per cent) had stopped operations temporarily that they will weather the crisis and resume due to the COVID-19 pandemic and the profitability, while 20 per cent were not associated lockdown measures. Because of confident of their economic resilience and the COVID-19 pandemic and lockdown robustness. However, asked about their pre- measures, 40 per cent of the enterprises in the crisis financial situation, 25 per cent of sample were operating with reduced working enterprises indicated that they were losing hours, a reduced number of workers (36 per money and 46 per cent indicated that they cent), or other types of reductions (4 per were breaking even, suggesting that many cent), while only 9 per cent of the enterprises enterprises had financial difficulties even were operating as before the crisis. before the lockdown measures. Apprehension is higher amongst home-based Furthermore, only 39 per cent all surveyed and micro enterprises. enterprises reported that they will still be in operation after three months under the Furthermore, a limited number of surveyed current conditions. Only 19 per cent of the enterprises reported that they were operating enterprises expect to be able to keep paying as usual during the time of the survey while 39 wages to their employees. While only 34 per per cent were operating with reduced staff or cent of the home-based businesses hours and 51 per cent of them reported to considered that they were robust enough to have closed temporarily. make it through the present situation, 53 per Around one-third (30 per cent) of the cent of the medium-sized enterprises enterprises indicated that they would not be expected they would survive. Reduced sales, able to stay operational for more than a restrictions on foreign currency and low month under the current situation, while 36 liquidity were considered the most serious per cent indicated that they would be able to challenges facing enterprises in the coming remain operational up to 3 months. Only 5 per months if the current situation continues. In cent said they believed they would remain the months to come, political and social operational for more than 3 months. instability were also highly cited as major challenges for the enterprises in Lebanon. The capacity of business enterprises to survive the economic crisis will depend on The main economic implications of the multiple factors including how agile lockdown on small-scale enterprises in companies are in ensuring business Lebanon are reduced sales and revenue loss. continuity and adapting their business More than one-half of all enterprises in the processes, yet only 25 per cent of the 1,191 sample reported such implications to be the enterprises in Jordan indicated that they had most serious ones. Lack of access to cash (40 a business continuity plan in place. per cent), increased production costs (28 per cent), and problems with importing materials Required support to minimize effect of needed for operations (19 per cent), were also COVID-19 on households and cited as major negative implications of the enterprises lockdown. However, these problems could in many cases be a combined result of In Lebanon, the majority of the surveyed Lebanon’s overall economic crisis and the workers (56 per cent) expressed that cash pandemic/lockdown. support to families who have lost their sources of income was a crucial measure to In Jordan, over half of the surveyed cushion the adverse impact of the crisis, while enterprises (52 per cent) remained confident

Evidence for policy brief: Impacts of COVID-19 on Syrian refugees and host communities in Jordan and Lebanon

6 about 29 per cent mentioned in-kind food Furthermore, 53 per cent of enterprises in assistance as an important measure. Jordan consider direct financial support as the most essential support needed to cope Only 18 per cent of all surveyed enterprises in with the situation at this stage. Sixty per cent Lebanon were aware of any support of micro businesses and 43 per cent of measures offered by the government or other enterprises with more than 100 workers actors to help them cope with the crisis. Out indicated a need for direct financial support. of the few enterprises that received support, To better cope with the crisis, 42 per cent of the most common were government all survey enterprises reported that wage subsidies, tax relief, delayed loan payments subsidy is an essential mechanism. or reduced interest rates. However, only 5 per cent of the enterprises received any such Policy recommendations support. Based on the findings of the assessments as To tackle the current circumstances, well as the experiences of the ILO, the surveyed enterprises in Lebanon had following recommendations are drawn. considered a variety of measures to continue 1. The underlying informal employment and business operation. The most widely poor working conditions of Syrian considered course of action was developing refugees have further deteriorated due to new business models for production and the COVID-19 pandemic. The findings of sales (35 per cent). Other measures included the assessments indicate that people in introducing e-commerce, introducing new formal and decent work are relatively less products, increasing prices, and negotiating affected in times of crises. Hence, delays of payments to banks and creditors. formalization of work among different The most preferred types of support that the segments of society including refugees enterprises would like to receive are direct should be promoted to achieve inclusive financial support and wage subsidies and decent jobs for all. Donors and (mentioned by 63 per cent in total). governments should increase efforts to In Jordan, 6 out of 10 workers expressed that promote the formalization of work and cash support to families who have lost their ensure decent working conditions are source of income was an important measure derived from a duly concluded to minimise the adverse impact of the crisis. employment contract. For instance, existing models such as the Jordan The majority (67 per cent) of the enterprises Compact could be re-vitalized through in Jordan indicated that they were not aware the promotion of protective measures at of any support packages or measures work places. available to them that mitigate the impact of 2. In Lebanon, Syrian workers are unable to the crisis. Around 12 per cent of the obtain work permits mainly for reasons enterprises indicated that the government is related to their legal status in the country. subsidizing pay – 16 per cent among small To ensure that refugees are not further enterprises and 21 per cent among and disproportionately affected by the enterprises with 100 workers or more. Eight COVID-19 crisis, Syrian refugees should be per cent of the enterprises reported that they allowed to obtain residency permits in were accessing soft loans while 5 percent of Lebanon by adopting a general fee waiver them have access to credit. for all refugees. A flexible work permit scheme that allows access to all sectors

Evidence for policy brief: Impacts of COVID-19 on Syrian refugees and host communities in Jordan and Lebanon

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should be introduced to facilitate access to formal labour markets and promote “To address the current needs of vulnerable decent work. workers including Syrian refugees and host In the context of fiscal constraints, 3. communities, we must work on improving the governments should develop a clear and status of workers in the longer term – through transparent approach to support micro, improved formalisation and social protection.” small and medium enterprises that are providing jobs for a substantial number of Frank Hagemann workers in both formal and informal Deputy Regional Director sectors. These support measures could ILO Regional Office for the Arab States be designed and implemented in a manner that promote the formalization of work for all, including that of Syrian refugees and that of enterprises.

i The ILO is leading an initiative, in collaboration with development partners, that conducts rapid assessments of the impacts of COVID-19 on labour markets in three Arab States: Jordan, Lebanon and Iraq. The participating organizations are: Development Programme (UNDP), International Rescue Committee (IRC), (DRC), Norwegian Refugee Council (NRC), International, Oxfam, and . Fafo Institute for Labour and Social Research (Oslo, ) provides technical and scientific support in design and implementation of the rapid assessments. The initiative will produce a series of country-level and comparative studies during April- 2020, examining the development and impacts of the pandemic over time by interviewing the same respondents at regular intervals. ii This brief is based on the following recent publications: . Tewodros Aragie Kebede; Svein Erik Stave & Maha Kattaa (2020) Facing Double Crises: Rapid Assessment of the impact of COVID-19 on vulnerable workers in Jordan. https://www.ilo.org/beirut/publications/WCMS_743391/lang--en/index.htm . Tewodros Aragie Kebede; Svein Erik Stave & Maha Kattaa (2020) Facing Multiple Crises: Rapid assessment of the impact of COVID-19 on vulnerable workers and small-scale enterprises in Lebanon. . https://www.ilo.org/beirut/publications/WCMS_747070/lang--en/index.htm . Tewodros Aragie Kebede; Svein Erik Stave; Maha Kattaa and Michaela Prokop (2020) Impact of the COVID-19 pandemic on enterprises in Jordan. https://www.ilo.org/beirut/publications/WCMS_749136/lang--en/index.htm

Authors Maha Kattaa Tewodros Aragie Kebede, Senior Researcher Senior Resilience and Crisis Response E-mail: [email protected] Specialist Svein Erik Stave, Senior Researcher Regional Office for Arab States E-mail: [email protected] International Labour Organization Fafo Institute for Labour and Social Research E-mail: [email protected] PO. Box 2947 Tøyen, NO-0608 Oslo, Norway www.fafo.no

Evidence for policy brief: Impacts of COVID-19 on Syrian refugees and host communities in Jordan and Lebanon

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