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An Arabic sign that reads: "3 Syrian style bread 5 lira" is seen at a market in Istanbul, Turkey February 17, 2016. Turkey's 2.6 million Syrian refugees may be straining the housing and jobs systems, but they're also fuelling economic growth. The world's largest refugee population has had a positive impact on Turkish output, economists and government officials say. It may be partly responsible for an unexpected rise in third-quarter growth and stronger forecasts for 2016 output. Picture taken February 17, 2016. REUTERS/Murad Sezer  - GF10000315754
Future Development

Syrian businesses in Turkey: The pathway to refugee integration?

Omer Karasapan

In March 2016, there were some 4,000 formal businesses in Turkey established by Syrians. Today they number 6,000, with 760 established in the first seven months of 2017 and 2,000 expected by the year’s end. Estimates of total Syrian businesses (or firms), including informal ones, range from 10,000 to over 20,000. Starting in 2013, Syrian firms consistently accounted for upward of 25 percent of foreign firms registered in Turkey, with the latter accounting for around 10 percent of the over 60,000 firms established annually in Turkey. Their presence is especially visible and proportionally much more significant in areas bordering Syria

Author

Omer Karasapan

Regional Knowledge & Learning Coordinator, World Bank

These numbers point to a story of entrepreneurship and growing integration even as perceptions of Syrians as competing for local jobs, driving higher rents, and contributing to increased crime persist. These perceptions are not surprising given that Turkey hosts over 3 million Syrian refugees, representing 3.6 percent of the population. Police crime data debunked the crime perception, but Syrians, especially in border provinces, do compete with Turks in informal unskilled jobs and drive up rents. But the flow of refugees has also boosted overall growth while increasing wages in certain sectors. What is clear is that the refugees are in Turkey for an extended period. Returning to a warring Syria is not an option any time soon, and the European Union-Turkey deal has effectively closed the route to Europe.

The more data and analysis are generated on Syrian firms in Turkey, the clearer becomes their positive impact on refugees and host communities. “Another Side to the Story: A market assessment of Syrian [small and medium-sized enterprises] in Turkey” by Building Markets and its partner the Syria Economic Forum, notes that Syrian firms on average employ 9.4 people—Turks and Syrians—with 55 percent planning to hire eight people on average over the coming year. Syrian business owners are well educated with 67 percent having higher education and are committed to Turkey—39 percent plan to start another business there and 76 percent intend to keep their businesses after the war while expanding in Syria and beyond. Indeed, 39 percent see regional trade as the primary opportunity in Turkey followed by 23 percent each for serving Syrian refugees or the Turkish market.

Increasingly, the debate is moving beyond accommodating Syrians as temporary guests to recognizing their long-term presence and opening up opportunities for livelihoods and preventing the development of an alienated underclass prone to criminality and radicalization. There are worrying elements of ghettoization reminiscent of Europe and some of its migrant communities. Inter-communal tensions, with isolated incidents, are another source of worry. Erol Yayboke from the Center for Strategic and International Studies calls for a “shift from short-term humanitarian support to long-term harmonization efforts.” Similarly, Timur Kaymaz and Omar Kadkoy from the Economic Policy Research Foundation of Turkey (TEPAV) call for “policies aimed at sustainable and durable integration… and a shift from a policy framework of ‘Turkey hosting the Syrians] to one of Syrians earning their livelihoods.’”

The politics will not be easy given that the issue of refugees is caught up in the highly polarized politics of Turkey. While Turks have been generally welcoming of refugees, surveys show few favor giving citizenship. Measures to support Syrian and host community businesses are precisely the types of interventions that will generate the jobs and services to demonstrate that the Syrian presence can be an asset rather than a liability.

This will necessitate incentives for establishing firms and for formalization as well as mentoring support and cultivating links to universities and other sources of expertise. Measures to ease access to finance will also be needed as will expanded efforts to teach Turkish. This will also mean measures to ease residency requirements if entrepreneurs are to risk their labor and capital and start paying taxes.

TEPAV has a proposal with the Union of Chambers and Commodity Exchanges of Turkey (TOBB) entitled “Living and Working Together: Integrating Syrians into the Turkish Economy through Local Chambers” that targets 12 provinces with the largest Syrian populations. This involves economic and sectoral analysis, capacity building for local chambers, skills and qualification testing for Syrians, matchmaking with firms, and Turkish language courses. Local chambers in border provinces also have programs for Syrians, including the Gaziantep Chamber, which is partnering with the European Bank for Reconstruction and Development to help local and Syrian entrepreneurs. The International Organization for Migration has a program for supporting Syrian micro-enterprises in border provinces. There are others, including the Syrian Business People Association and Syrian Economic Forum, which has trained 2,500 Syrian entrepreneurs. The European Investment Bank has expanded a program for small and medium-sized enterprises loan guarantees and counter-guarantees to Syrian entrepreneurs.

Support for the growing numbers of Syrian entrepreneurs will strengthen the integration of refugees as contributing members of society and help decrease tensions. More attention needs to be paid to this by foreign donors and will need continued concerted efforts by Turkish decisionmakers in government and the private sector. Looking forward, Gunes Asik of TOBB Economics and Technology University notes, “New policies could have a particular impact on the younger generation of refugees, most of whom are bilingual and have a strong stake in creating new lives for themselves in Turkey.”

This blog was first launched in September 2013 by the World Bank in an effort to hold governments more accountable to poor people and offer solutions to the most prominent development challenges. Continuing this goal, Future Development was re-launched in January 2015 at brookings.edu.

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