22 April 2016

Syrian refugees present a golden opportunity for the Jordanian economy


For all the protestations from Ukippers that Britain is facing a migration crisis, spare a thought for the Jordanians.

The country plays host to 1.4 million Syrian refugees. With a population of just 6 million before the conflict, for Jordan, this is no small feat. Social security systems are struggling to cope with the number of people they are being expected to look after.

Indeed, the public school system has been forced to adopt a shift system. Jordanian children come to school in the mornings, before Syrian children attend evening classes, with accordingly poorer tuition from exhausted and underpaid teachers.

For some Syrian families, marrying their daughters to much older men is the only way to earn an income. In some cases these young girls are simply being prostituted out.

These pressures threaten to widen the rift between the new arrivals and resident Jordanians. The Amman based West Asian North Africa (Wana) policy institute, however, views the influx of refugees as a potential shot in the arm for the Jordanian economy.

Chaired by Prince Hassan bin Talal, uncle to the ruling King Abdullah II, the policy institute’s research looks at how the human overspill from the Syrian War can be harnessed to drive Jordanian growth.

Leen Aghabi, research fellow at Wana, explained why she felt Jordan has no choice but to embrace the influx of labour.

“It is a mistake to think of Syrian migrants as living in refugee camps. They live in between the rest of society, many of them living in cities such as Amman and Irbad,” Leen explained.

Syrian refugees are currently denied the right to work legally by the Jordanian state. As a result, most Syrians have to work illegally to supplement the meagre allowances paid by the UN and the government.

Making up most of the informal labour force, Syrians are paid far below the Jordanian minimum wage with no health and safety or social security to speak of.

“Instead they should be given the legal right to work” Leen said. According to research completed by Wana, doing so could solve a number of problems facing the Jordanian economy. “As with many states in the region, Jordan already has a bloated public sector,” Leen explained.

There are not enough graduate jobs to meet the expectations of well-educated young Jordanians. “They just don’t want to work in blue collar occupations. They don’t want to work in convenience stores or in factories.”

This paucity of graduate opportunities means many will simply rely on parental support until a good opportunity comes along in the public sector, rather than getting their hands dirty or starting their own businesses.

This worsens the already high rate of youth unemployment, and is a considerable dampener on growth.

Wana’s research suggests registering and legally employing Syrians could bring much of the informal economy into the light, both to regulators and to the exchequer, as well as filling the employment gap in blue collar jobs that native Jordanians are so averse to working in.

This is all great in theory, but achieving such labour reform faces an array of institutional barriers. Many Jordanians feel that Syrians are a burden on the state, and are quietly looking forward to the day that they cross the border once more.

With unemployment rates already high, many question why the Syrians are being given such “special attention.” “The average Jordanian may question why jobs for refugees are a priority. They would say, ‘I went to university, why isn’t the government focussing on helping me get the sort of job I would want to work in’,” Leen explained.

Most of all, such regulatory reform would beg the question, “Does this mean they are staying?”

However, things will never be as simple as opening the border back to Syria once its civil war comes to an end and watching Jordan’s unexpected guest walk back across.

“Due to the demographics of the Syrian conflict, and of Jordan itself, almost all of the migrants that came to Jordan are Sunni, and come from Daara, one of the main centres of the revolution back in 2011,” Leen explained.

“Talking to them out in the streets, they tell me that they fear going back, should Assad or one of his lieutenants hold onto power in the aftermath of the war.”

“’Will we not be seen as traitors to the state, first for protesting, then for leaving?’ they ask.” As such, many of those who left Syria for Jordan will be staying there for the long haul.

Whatever the social issues of employing Syrian migrants, creating jobs for them to have is contingent on investment. The Jordanian economy is already over reliant on remittances and foreign aid, and enjoys few natural resources, hindering growth and driving unemployment. While it has become more attractive to foreign investment in recent years, restrictive investment rules have dampened enthusiasm.

“Certain sectors of the Jordanian economy are closed to foreigners,” Leen explained. There are limits to foreign ownership in many parts of the industrial sector, where much of the growth Wana expects from refugee labour reform would need to come from.

Those sectors that are open to foreigners strictly regulate the numbers of non-Jordanians that can be hired by any new business. Firms must employ a large number of Jordanians to be allowed to operate, under so-called rules of origin. It is no wonder that the burdens such policies put on potential investors curbs their excitement.

Liberalising Jordanian labour laws therefore has the potential to hit two birds with one stone; driving investment while reducing the burden of accommodating refugees.

While the Jordanian government is nervous to strike a balance, and not inflame the ire of its under occupied young people by being seen to favour the Syrians, Leen thinks in the long run, the government has little choice but to reform, as static growth rates are no less likely to inflame social tension.

“In a sense, Jordan has no choice but to grow.”

This sort of innovative thinking that is desperately required in the region, to disrupt the inefficient crony capitalism and rent seeking behaviour that has held the countries of the Middle East back for a generation. Indeed, this sort of state favouritism in Assad’s Syria helped to take the divide between Sunni and Allawite to breaking point.

However, it remains to be seen whether investors can be enticed to risk their capital while hell on earth plays out just over the border.

George Greenwood is a freelance political journalist, published in the New Statesman, The Independent and The International Business Times.