Jordan is home to over 600,000 Syrian refugees registered with the United Nations. Actual numbers are estimated to be twice that. These refugees, despite a curtailing of health services and the occasional deportation, are unlikely to be going home soon, if ever. This mirrors the situation in Turkey and Lebanon, which host Syrian refugee populations of 1.7 and 1.4 million respectively. An earlier post on this blog looked at Turkey’s attempts to deal with these refugees by legalizing their presence and absorbing them into the economy. The social and economic dynamics in Jordan are different. The country is much smaller (a population of 6 million versus 77 million) and the economy equally smaller and quite different. For example, well over 60 percent of Jordan’s formal employment is in the public sector. Yet the dynamics of the Jordanian economy may still provide a reasonable chance for integrating the refugees and avoiding a permanent refugee underclass. Indeed, while Syrians account for approximately 20 percent of the population and tensions inevitably occur, the situation remains less than explosive (so far…) due to a number of factors specific to the Jordanian economy and the Syrian refugees.
The largest numbers of employed Syrians—an estimated 160,000 according to the U.N. International Labor Organization (ILO)—are low-skilled workers who take jobs that Jordanians tend to avoid. Such jobs are in construction, agriculture, retail, etc. The Syrians tend to displace not Jordanians but rather the more than 500,000 immigrants, most from other Arab countries, who work in these low-wage jobs. Half of these immigrants do not hold work permits, so the Syrians enter a labor market familiar with informal employment. Indeed, well over half of the firms in the Jordanian private sector are themselves informal. According to University of Minnesota Professor Ragui Assad, the Syrians also find an economy where a powerful private-sector lobby preserves a labor market for small Jordanian firms who have become dependent on cheap, mostly foreign, labor.
Obviously the downward pressure on wages exerted by the entry of Syrian workers in this segment is bad news not only for other migrant workers but also for the 14 percent of Jordan’s population who are at the poverty level and who depend on wages for half of their incomes. How sustainable the current situation is remains unclear. The ILO calls for comprehensive labor market reforms, including granting work permits for Jordanians in specific sectors, to deal with the unregulated labor market and the challenges these workers face.
The ILO notes that, so far, unemployment has not increased in the Jordanian Governorates that host the most Syrian refugees. The ILO expects that “enterprising and resourceful Syrian refugees, driven by their difficult livelihood conditions, will inexorably be pulled into the orbit of the Jordanian economy.” Indeed, the economic activity rate of Syrians (48.5 percent) is higher than the hosting Jordanians (36.5 percent). Overall, small and medium-sized enterprises in Jordan, which comprise the vast majority of Jordanian firms, have been boosted by the lower wages. In the meantime, Syrians and their entrepreneurial ways have boosted many parts of the Jordanian economy as they create new firms, new jobs and enhance products and services in parts of the economy. Numbers are difficult to come by, but the Jordanian Investment Board stated that in 2013 some $1 billion was invested by Syrians. Also noted is that these investments, as well as the redirection of investment from neighbors fearing further instability and the economic inputs of the refugees themselves, have probably played a large role in the country’s nearly 4 percent growth rate in 2013.
That entrepreneurial spirit is evident in the Za’atari refugee camp where the main street is called the “Champs Elysees” and businesses abound. Now Jordan’s fourth largest city, the camp seems to be slowly developing its own economy, but that economy is still dependent on aid flows—much of it in the form of debit cards—to the refugees. This brings to mind the Palestinian experience with camps, a cautionary example well known to the Jordanians for whom the Syrian exodus is the third large refugee inflow after the Palestinians and the Iraqis.
While there are various mechanisms by which Jordan appears to be coping with this massive influx for now, significant outside assistance may be needed to prevent tensions from eventually boiling over. Support from the United Nations, the World Bank, and other donors have provided direct assistance to local administrations where the refugees are concentrated. However, if the refugees are to be integrated into the Jordanian economy and receive the social services they need, more support will be needed, especially so if Jordan’s poor are not to bear the brunt of this challenge. It would be useful to remember the Palestinian example and recognize that now is the time to assist—before the creation of a permanent, large refugee population dependent on handouts and living in camps in poor conditions. The impact of the Palestinian exodus is very much with us nearly 70 years later and the Palestinian issue remains an unresolved crisis at the core of many of the challenges the region—and consequently the world—faces today. Let’s make sure the influx of Syrian refugees into Jordan follows a better path.