From tragedy to opportunity: Lessons learned from the Jordan Compact

From Tragedy to Opportunity:

Lessons Learned from the Jordan Compact

S1675524

Msc Thesis Political Science Universiteit Leiden

June 11th, 2019

Thesis supervisor: Dr. Matthew Longo Second Reader: Dr. Claire Vergerio Thesis seminar: Borders & Migration

Abstract

The potential of refugees to offer benefits to host states signifies a new approach in the international refugee regime. This thesis aims to contribute to the literature through a case study research into the Jordan Compact. The Jordan Compact is a deal signed between the EU and the Jordanian government in 2016, attempting to strengthen Jordan’s economic resilience by providing work opportunities to Syrian refugees. Since it has not lived up to its expectations during the first two years after implementation, this research aims to distinguish the necessary conditions for a policy like the Jordan Compact to be effective in reaching its objectives. Using various data sources, such as stakeholder accounts from Jordanian employers and Syrian refugees, insight is gained into the particularities of the Jordanian labor market, needs and constraints of refugees, and the relevance of how refugees are perceived within their host society. By delving into what has prevented Jordan from economically benefiting from the integration of refugees into its formal labor market, lessons can be learned for future attempts of a development-led approach to handling refugee influxes. Most importantly, the incentive framework of the host government, the labor market and potential international parties needs to be aligned.

Table of Contents

Abstract 2

List of Abbreviations 4

1. Introduction 5

2. Literature Review 8

2.1 Conditions for a Successful Development-Led Approach to Refugees 9

2.1.1 Types of Economic Advantages 9

2.1.2 Temporal & Spatial Context of Refugee Livelihoods 11

2.1.3 Securitized Migration 13

3. The Case of the Jordan Compact 16

4. Data and Method 19

4.1 Research Design 19

4.2 Data Collection 21

5. Findings 24

5.1 Jordan’s Economy, Private Sector and Labor Market 24

5.2 Refugee Needs and Constraints 29

5.3 Securitization of Syrian Refugees in Jordan 33

6. Discussion 37

List of Abbreviations

ENP - European Neighbourhood Policy

EU - European Union

FGD - Focus Group Discussion

ILO - International Labour Organization

JC - Jordan Compact

KII - Key Informant Interview NES - National Employment Strategy NGO - Non-Governmental Organization

ROO - Rules of Origin

SEZ - Special Economic Zones

1. Introduction

“Syria has become the great tragedy of this century - a disgraceful humanitarian calamity with suffering and displacement unparalleled in recent history. [...] The only solace is the humanity shown by the neighbouring countries in welcoming and saving the lives of so many refugees.” - António Guterres, September 3rd, 2013.

The refugee crisis following the conflict in Syria that started in 2011 has moved from a “humanitarian calamity” into a protracted situation affecting not just the Syrian population, but also the neighbouring countries that have welcomed Syrian refugees within their borders. Eight years after the onset of the conflict, the effects within the region as a whole are felt increasingly. A common perception of refugees as a burden to their host society prevails. Refugees often have to deal with a sense of exclusion from the community they enter into. By asking the question “what problems might foreigners solve for us?”, a more constructive angle is taken in hosting refugees (Honig, 2003, p. 3). Refugees offer an influx of new capital and resources a host state previously did not have.

The possibility for refugees to contribute positively to the society they have fled to is the basis for the contemporary shift in the international refugee regime. One of the first, most tangible, results of this shift is the Jordan Compact (JC) (Betts, Kaplan, Bloom, & Omata, 2017). The JC is a deal between the European Union (EU) and Jordan intended to strengthen “Jordan’s

resilience and stability while seeking to also address the impact of the protracted conflict in Syria” (European Commission, 2016, p. 2). The most innovative turn within the EU-Jordan partnership, which the JC is part of, is the aim “to turn the challenges posed by the Syria crisis into concrete opportunities to the benefit of the population of Jordan, the Syrian refugees, and the EU” (EC, 2016, p. 6).

The commitments within the JC are intended for 10 years, starting out with an implementation period between 2016-2018. Since this initial period has ended, the effectiveness of the JC is debated. The levels of poverty and unemployment of both Jordanians and Syrian refugees in Jordan do not show improvement and the objectives have not been reached in terms of outputs (e.g. work permits, decrease in overall unemployment) nor in terms of outcomes (e.g. improvement of livelihoods, trade increase) (Agulhas, 2019, p. 15). Nevertheless, the decision to extend the JC for another two years was adopted on the 10th of december, 2018 (EU, 2018).

While the JC has not yet proven a development approach to refugees to be an undebatable success, approaching refugees as potential givers to society is still believed to be possible. This begs the question under what conditions it is possible for refugees to become givers to their host societies? Hence the research question this thesis aims to answer is: what has prevented the Jordan Compact from strengthening Jordan’s economic resilience while enhancing economic opportunities for Syrian refugees in 2016-2018?

The research into this question is rooted in the literature on the place of refugees in their host society and the conditions influencing the likelihood of refugees contributing to the host economy. It works from the assumption that when refugees are given the opportunity to

participate in the formal labor market of a state, they can indeed benefit their host economy. The JC was selected as a case study because it offers the first concrete attempt to view refugees as a development opportunity. Furthermore, the creation of the policy was directly informed by academic research. Hence, the conditions found in the literature are operationalised as hypotheses. Next the hypotheses are tested using various data sources including first hand accounts from a REACH fieldwork research in East-Amman and data from the International Labour Organization (ILO) on the Jordanian labor market. The structure of the thesis is as follows: after the literature review, a background to the JC is given. Next, the methodology section outlines the methods employed to test the hypotheses, case selection, and data collection. The findings are then analyzed after which the discussion will tie the most important findings to the existing literature on refugees as givers.

2. Literature Review

The definition of refugee is criticized for being derived from a specific point in history, consequently offering little space for analyzing groups of refugees within their own context (Kaplan, 1996). The attempt to use the concept of refugee as an ahistorical category universalizes particularities of persons in exile (Nicholson & Twomey, 1999, p. 114).

The generalisation of refugees is split up in two camps; viewing refugees as either takers or givers. Support for the view of refugees as takers derives from the internationally agreed upon definition of refugee. Those fleeing their country of origin “owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group, or political opinion” are allowed protection by the international community (United Nations High Commissioner of Refugees, 1951, p. 14). The negative content of the notion of protection entails absence of persecution, yet ensuring the positive content of protection puts a responsibility on the host state as a provider of protection (Storey, 2016). Within the discourse of refugees as a burden, the need for protection as taking something from the state ties in with the view of refugees as solely takers (Gammeltoft-Hansen & Tan, 2017, p. 30; Honig, 2003, p. 8). Hence, scholars who perceive refugees as takers often derive their argument from causal mechanisms informing migration, such as escaping negative living conditions to earn a better livelihood or those fleeing war carrying with them the risk of spillover of conflict.

On the other hand, there is an emerging scholarship on the potential of migrants to be givers. In responding to what is seen as a global refugee crisis, it is important to perceive refugee identity as “not merely the negative, empty, temporary, and helpless counterpart to the positive, present, permanent, and authoritative citizen” (Nyers, 2006, p. 23). Honig shows the figure of a foreigner to be able to import resources that a host society could be lacking (Honig, 2003, p. 3). The view of refugees as in need of protection overlooks the economic capacities refugees have, related to their engagement “in production, consumption, exchange, entrepreneurship, and the development of financial and capital markets” (Betts, et al., 2017).

The labelling of refugees and how the concept of refugee is interpreted impacts the matter in which refugees are discussed, as “different meanings have both productive and prescriptive capacities” (Cole, 2018, p. 2). Yet, besides recognition of refugee potential there are several other conditions identified in the academic literature that need to be in place for refugees to give back to their host society.

2.1 Conditions for a Successful Development-Led Approach to Refugees

2.1.1 Types of Economic Advantages

Research into the economic lives of refugees proves a diversity in livelihood capabilities of refugees (Jacobsen, 2005; Jacobsen & Fratzke, 2016). Yet, refugee economies share the definition of “the resource allocation system that shapes refugees’ lives in exile” (Betts, et al., 2017). The material, social, and political resources that flow into a country hosting refugees are referred to as refugee resources. Besides humanitarian assistance, refugees can contribute in

terms of human capital and economic assets as well (Jacobsen, 2002, p. 577). The extent to which a host country manages to benefit from these resources depends on whether refugees are integrated into the workforce of a country. Refugees can also be entrepreneurs and thus employment-creators for both refugees and citizens of the host state (Betts, et al., 2014, p. 19). Moreover, host economies benefit from refugees’ purchasing power (Betts, et al., 2014, p. 16). While the financial resources earned by migrant workers are often sent back to be spent in a different country, refugees’ spending boosts the economy. It is thus a combination of refugees’ skills and resources, resulting in increased production capacity and consumption demand, which can contribute to a host state’s economic development (Khoudour & Andersson, 2017, p. 2).

Previous research on the impact of forced migration showed a long-term positive impact for displaced groups in European countries, with long-term mobility being the defining factor. In contrast to this, the outcomes for forced migrants in developing countries seem to be mostly negative and mixed for host communities (Ruiz & Vargas-Silva, 2013). An example of this is agricultural producers who manage to benefit from the increase in cheap labor and demand for products (Fakih & Ibrahim, 2015). On the other hand “losers include local workers who have lost their jobs due to the supply of cheaper labor following the influx of job-seeking refugees” (Fakih & Ibrahim, 2015 p. 69). It is precisely this job competition that can be influenced through policy. The JC is such a policy created to “generate additional labor demand among Jordanians” (Fallah, Krafft & Wahba, 2019, p. 204).

In the case of Jordan, Lozi (2013) claims that the extent to which refugees can be held accountable for the economic challenges in the country is generally overstated. This is supported

by Zetter’s (2012) conclusion that the adverse effects of hosting refugees, termed the refugee burden, is overemphasized by governments and humanitarian actors. According to him, potential positive effects on the productive capacity of the host economy take longer to materialize and are therefore overlooked (Zetter, 2012). Nonetheless, any potential positive impact depends on more than refugee resources based on “the mechanisms of aid, additional labor demand in services, and work permits”, but also on the relation and competition between refugees and migrant workers (Fallah et al., 2019, p. 204).

Combining these claims with Fallah et al.’s finding that “Jordanians living in areas with a high concentration of refugees had no worse labor market outcomes than Jordanians with less exposure to the refugee influx”, leads to the question what is necessary to turn these “no worse labor market outcomes” into positive outcomes (Fallah et al., 2019, p. 203). The JC seems to offer a viable effort to turn the refugee influx into a positive impetus for the labor market and overall economy. Seeing as this has not happened yet, a possible hypothesis that arises is: a lack of recognition for the particularities of the Jordanian economy, labor market, and private sector while making the JC causes its goals not to be reached.

2.1.2 Temporal & Spatial Context of Refugee Livelihoods

The effective use of refugee resources partly depends on supply and demand of the host labor market. Besides this, the specific needs and constraints caused by the living situation of refugees are of influence. The idea that refugees could benefit their host economy is based on the understanding that an influx in the workforce can boost the economy. Yet there is one specific

difference between a workforce of citizens and a workforce of refugees, namely the institutional framework of refugeehood. Institutions are “the humanly devised constraints that structure political, economic, and social interaction. They consist of both informal constraints (sanctions, taboos, customs, traditions, and codes of conduct), and formal” (North, 1991, p 97). Refugees face different constraints from citizens within the workforce, such as formally being forbidden to work or through more informal constraints. These can relate to cultural ties between the host population and the refugees, but also to the location of residence or the length of time a refugee has been inside a host state.

Refugee camp economies are distinct from the economic lives of refugees outside of camps (Ruiz & Vargas-Silva, 2013; Werker, 2007). The time frame of a refugee influx influences the likelihood of them becoming integrated into the host country. Around 56% of refugees are currently said to be in protracted exile (Betts et al., 2017, p. 4). Protracted refugee situations arise when durable solutions, such as repatriation, resettlement to a third country, or local integration into the host state, are lacking (Betts et al., 2017, p. 4). It is within these situations, where refugees seem to have few prospects for the future, that increasing their ability to become self-reliant is most important. This would include offering refugees the chance to partake in the market of a host state. Yet camps are often in border areas, which poses obstacles to integrating into the formal labor market, such as restricted mobility. Furthermore, distance from commercial centres increases transportation and information costs (Werker, 2007, p. 466). Consequently, it seems that in protracted situations it is generally beneficial for refugees to live in urban settlements as it facilitates economic integration. Nevertheless, an important advantage

for camp-based refugees is the access to humanitarian aid, a form of support often inaccessible to refugees in non-camp contexts (Betts et al., 2017, p. 57). In coping with a refugee crisis host states receive humanitarian aid based on the amount of refugees they admit within their borders, incentivizing host states to pursue a policy of encampment as it enables them to prove refugee presence (Jacobsen, 2002).

There are several distortions inhibiting the economic empowerment of refugees. Isolation from the national economy and subsequent issues related to transportation costs, information costs, market size, terms of trade hinder camp economies. Urban refugees encounter hurdles in earning a livelihood due to issues related to mobility, family commitments, or discrimination. Recognition of these needs and constraints should form the basis of a policy encouraging economic empowerment of refugees. Therefore a second hypothesis is: the job opportunities offered to refugees through the JC were unsuitable due to a lack of recognition for the needs and constraints faced by Syrian refugees.

2.1.3 Securitized Migration

Offering refugees the possibility to earn an income depends on the willingness of the host population. This willingness derives from the perception of refugees. Refugee identity is often linked to insecurity, either for the host community in terms of spillover conflict or radicalisation of refugees within camps, or for the refugees themselves due to discrimination or risk of deportation (Werker, 2007, p. 469). Possible security problems of refugee camps perceived by host governments include crime, recruitment for rebel militias, political radicalism, military

recruitment, etc. (Jacobsen, 2002, p. 587). This bears consequences for refugees’ place in the labor market. “Insecurity reduces the economic vitality of the community and offsets any economic advantages that might accrue from refugee resources” according to research by Jacobsen (2002, p. 588). The perception of refugees as a security issue or not is a highly influential condition for the likelihood of benefitting from refugee resources.

When fleeing their country of origin, refugees come under the protection and the rule of a host government. Regardless of international agreements on the treatment of refugees, it is up to national policy-making to live up to international standards. The topic of migration concerns more than solely the protection of refugees. Migration can be employed by politicians and government institutions as a mode of governmentality (Bigo, 2002). Within national discourses on migration, security issues often take central stage. The causes of fleeing make security issues inherent to what it means to be a refugee and thus a logical consideration in the discourse on refugees. Consequently, migration can become securitized when refugees are perceived as solely a security issue. Nonetheless, this relation between refugees and security threats is not so straight-forward. There are several factors for the securitization of migration, identified by Bourbeau as: “1) the notion of migration in a collective sense posing an existential threat to the security of [...] society; 2) the prominence given to immigration as a security threat; and 3) its attendant effects in political practice” (Bourbeau, 2013, p. 1). Securitization is the process by which state actors establish something as a threat to such an extent that violation of certain rules or procedures are tolerated by the population (Buzan, Wæver & de Wilde, 1998, p. 25). As a result, securitization of a subject like refugees can lead to disproportionate attention to refugees

as a threat. Bigo discusses the securitization of migration to be a transversal political technology employed as a mode of governmentality, which can be understood as politicians and government institutions aiming “to affirm their role as providers of protection and security and to mask some of their failures” (Bigo, 2002, p. 65).

Hence the discourse surrounding refugees is of major importance. The enduring interpretation of the refugee phenomenon as a problem in need of a solution has led to several approaches by different actors. Either the idea of refugees as a burden, based on the definition of refugees as in need of protection, or the idea of refugees as a security threat, employed by politicians, obstructs a move towards a development approach to refugees (Nyers, 2006, p. 5). From this follows the last hypothesis, being: the continued presence of security issues such as the fight against terrorism, violent extremism, and radicalisation prevent the effective use of refugee resources in fostering economic growth, due to the relationship between security issues and refugee presence in Jordan.

3. The Case of the Jordan Compact

The JC is part of a deal by the EU-Jordan Association Council signed at the London conference on ‘Supporting Syria and the Region’, on the 4th of February 2016. Although intended for ten years, the period 2016-2018 was selected as the period of implementation after which the policy’s objectives would be reviewed. The JC’s aims for the period of 2016-2018 were described as “supporting and strengthening Jordan’s resilience and stability while seeking to also address the impact of the protracted conflict in Syria”, yet its objectives were more extensive as can be seen in figure 1.

The second objective on economic stability and job creation encompasses the literature on economic integration of refugees. The commitments on behalf of Jordan’s government and the EU are also outlined in the JC. Eighteen Special Economic Zones (SEZs) were created in Jordan where refugees would be allowed to work. To this end, the government of Jordan was expected to issue 200,000 work permits to Syrian refugees during 2016-2018. In return, the EU would provide preferential trade access to goods produced within these zones, by firms employing at least 15% Syrian workers. This percentage was supposed to rise to 25% after three years. In return, the World Bank would grant loans at concessional rates to these firms operating in the SEZs.

Nonetheless, in April of 2019 only 125,000 work permits were issued to Syrian refugees since the JC implementation in 2016 (UNHCR, 2019). In June 2018 only 50,000 Syrian refugees were considered to have active work permits (UNHCR, 2018). When it comes to the trade access and relaxation of rules of origin (ROO) only 16 companies applied as of February 2019, of which 13 were approved (Agulhas, 2019, p. 15). Combined these firms have 1,000 employees, 28% of Syrian origin.

The JC embodies a new approach to development and the place of refugees in a host society. Hence its incompetence in succeeding up until now might change after a long enough period of trial-and-error. The 2016-2018 period stands for the first try, after which meticulous identification of its errors can be accounted for in the continuation of the JC and other policies with similar intent. Hence the background conditions against which the JC has been implemented are crucial.

Even without having signed the 1951 Refugee Convention, Jordan has a rich history of welcoming refugees past its borders (United Nations General Assembly, 1951). Jordan is the host of the second highest share of refugees per capita worldwide (UNHCR, 2019). Syrians account for 665,498 of registered refugees in Jordan (UNHCR, 2019). While the majority is unregistered, the total Syrian refugee population is estimated to range between 1.3-1.4 million.

Notwithstanding this, the Jordanian government decided to close the last border checkpoint to Syria in 2015. This meant cutting off important trade routes for Jordan to Syria and Iraq. This, together with the stress on public infrastructure due to the refugee influx, was seen as a disaster for Jordan’s economy. Nonetheless, Jordan’s economy already faced significant challenges before the Syrian conflict. The global financial crisis of 2008 combined with the turmoil following Arab uprisings in the region in 2011 and the increase in energy costs “due to the steep reduction in supplies of less costly gas from Egypt” all took its toll (Fakih & Ibrahim, 2015, p. 2). Against this background, the steep influx of refugees exacerbated the deterioration of Jordan’s current account deficit.

4. Data and Method

4.1 Research Design

To gain insight into whether refugees can contribute economically to their host society this study employs a case study approach. A case study design was chosen to explain the necessary conditions for this phenomenon to occur. This study looks into more than mere numbers concerning economic growth, decrease in unemployment, and amounts of work permits issued to refugees. Instead, it aims to uncover the causal mechanisms between the reality of Syrian refugees and the Jordanian host population in order to assess what is necessary for the livelihoods of both groups to improve. This research works from the constructivist paradigm, acknowledging reality as a social construction (Searle, 1995). Therefore, it is crucial that a variety of actors are included to describe their views on the JC’s impact (Baxter & Jack, 2008, p. 545).

This case study seeks to explain the presumed causal link between the policy implemented and the outcome in terms of improving refugee livelihoods and the host economy. An explanatory case study is used, as the research question seeks to explain “presumed causal links in real-life interventions that are too complex for the survey or experimental strategies” (Yin, 1984). Due to these presumed causal links, some elements from the method of process-tracing are included.the JC was expected to yield opportunities that would benefit the population of Jordan, the Syrian refugees, and the EU, due to the extensive research, negotiations, and international momentum that preceded it. By delving into which processes

caused the actual outcome of the policy to be unsuccessful in matching these priorities, this research hopes to offer further insight into the JC besides contributing to the literature on a development approach to dealing with refugees as givers.

Similarly to the hypotheses used in “explaining-outcome process tracing”, which “aims to trace causal mechanisms in order to produce comprehensive explanation of a particular outcome”, Baxter and Jack (2008) also identify the value of including specific propositions in case study research (Beach, 2017, p. 21). Therefore, three propositions, or rather hypotheses, are derived from the literature to be tested. An instrumental research design is selected, because the hypotheses are derived from academic literature on conditions for the economic integration of refugees. Hence, the specific case of the JC is used to better understand the integration of refugees into the formal labor market in general (Hancock & Algozzine, 2017, p. 33).

The JC was selected because of its explanatory value on the relation between economic integration of refugees and improvement of the host economy. The fact that the JC is based on rigorous academic research by experts on forced migration, refugee economics, and development, makes it a deviant case study, although representative of a country expected to be capable of economic growth incited by its refugee population (Betts & Collier, 2018, p. 9; Betts & Collier, 2015). It is likely due to the scope conditions that the JC serves as a deviant case study within this research. It looks into the first two years of implementation, starting from the London conference in 2016, until the review and decision for extension in December 2018. Yet by limiting the study temporally, a better insight can be gained in the necessary adaptations which

could turn the JC into a conforming case study when researched post-2018 (Gerring & Cojocaru, 2015, p. 7).

Hence, the value of the study lies in uncovering what is necessary for refugees to become givers rather than takers. When the JC manages to effectuate economic growth as a consequence of hosting refugees, it could be the catalyst for further international policy that stimulates economic growth and empowerment of refugees instead of prolonging refugee dependency on the host state and international aid. The turn from humanitarian aid to sustainable development aid in Jordan is a prime test case. There were various options for creating international agreements in a region where so many countries are affected by refugee influxes, yet Jordan was chosen as a country where such a policy had the highest chance of being successful (personal communication, May 29, 2019, ). While the use of compacts is not new, the use of concessional financing to middle-income countries through multi-year development aid funding and technical assistance to what would normally be considered a humanitarian crisis is new (Post, 2017, p. 6).

4.2 Data Collection

Collecting the data and making sense of it was a recursive process, as continuous analysis was needed in order to refine findings and further data collection. Multiple data sources were used in order to take various perspectives into account and to enhance data credibility. Much of the data on Syrian refugees in Jordan is concerned with assessing vulnerability caused by the influx of

Syrians. The attempt to focus instead on opportunities rather than vulnerabilities is thus quite refreshing.

Firstly, legal and governmental documents concerning the JC, the European Neighbourhood Policy (ENP), and further international agreements on Syrian refugees in the region were analyzed. Next, a variety of review reports from NGOs, both international and community-based, were consulted. The fact that humanitarian NGOs might have contrasting objectives to some aspects of the JC or Jordanian government was taken into account in assessing their credibility as a source. Nonetheless, insights from humanitarian organizations did provide a lot of insight due to their knowledge on the living situation of Syrian refugees in Jordan. Attending a conference on humanitarian actors in Syria and the region emphasized this.

Furthermore, data from fieldwork in East-Amman in 2017, performed by REACH, was shared for the purpose of this research (REACH, 2017). Nineteen focus group discussions (FGDs) were held with groups of Syrians and Jordanians in East Amman between the 9th of February and the 16th of April 2017. Sixteen key informant interviews (KII) with business owners and eight KII’s with stakeholders from community-based organizations, NGOs, the (municipal) government, and business associations are included. The Amman governorate hosts the largest number of refugees. Generally, most urban refugees in this governorate are settled in East-Amman. Data on urban refugees is more difficult to obtain than on encamped refugees, making the data from REACH especially valuable. Additionally, interview data derived from a fieldwork research project by the International Labour Organization (ILO) in 2017 was taken into account (Razzaz, 2017). Quotes were analyzed from interviews with employers, Jordanian

workers, migrant workers, Syrian workers, unemployed Jordanians, unemployed Syrians, and several government employees, in order to identify challenges in the Jordanian labor market across different sectors.

Due to the large variety of stakeholders, the time period, the area under consideration, and the overall scope of this research project, the data collection had to fall back on mostly secondary data. Nevertheless, meaningful outcomes can still result from this secondary data when understood as “not so much as the analysis of pre-existing data; rather as involving a process of re-contextualizing, and re-constructing, data” (Moore, 2006, p. 22). Moreover, a key informant interview with an expert on Jordan working for the Dutch ministry of foreign affairs was undertaken to test the outcomes of this research and check for alternative hypotheses (personal communication, May 22, 2019).

5. Findings

5.1 Jordan’s Economy, Private Sector and Labor Market

The first hypothesis blames a lack of recognition for the particularities of the Jordanian economy, its labor market, and private sector, as the cause of the JC’s commitments not being reached. The objective of the JC is twofold. The relaxed ROO assists Jordanian companies to get access to and benefit from the European market. This is supposed to compel companies to increase formal employment of Syrian refugees. Nevertheless, the products applicable for the relaxed ROO are derived from the manufacturing sector. The Jordanian National Employment Strategy aims at increasing employment of Jordanians as well. Within this strategy, a sector-specific approach was taken to adjudicate which segments of the labor force proved most promising in increasing employment of Jordanians.

Sector Dominant segments of the labor force Tradeability

Agriculture Migrant workers (Egyptian men) and Syrian refugee families

Partly traded

Manufacturing Migrant workers (south Asian women) and Jordanian men

Traded

Construction Jordanian men, migrant workers (Egyptian men), male Syrian refugees

Non-traded

Tourism Jordanian men, with more recent entry of male Syrian refugees in the restaurant sub-sector

Traded

Domestic work Primarily migrant workers (South and East Asian women)

Non-traded Table 1 - labor force per sector (Razzaz, 2017, p. 21)

The National Employment Strategy (NES) approach builds on the logic that the most potential for increasing employment of Jordanians is in non-traded sectors, since there is no international competition and the national economy can find its own equilibrium in those (Ministry of Labor, 2010). Both the data from ILO and REACH show a discrepancy between the policy commitments and the reality for employers and employees.

Firstly, tapping into the benefits offered by the relaxed ROO turned out to be more difficult for Jordanian firms than expected. The World Bank offered millions of dollars in concessional funding to firms within the SEZs, but only 13 firms were approved to benefit from the relaxed ROO. Generally, accessing international markets is difficult for Jordanian firms, regardless of sector. “Jordanian farmers do not have a clear strategy or sophisticated vision to understand the shifts and gaps of the international markets and what to grow for what market. We don’t have any information to help make decisions and have to depend only on information we get from wholesalers or exporters, and we know they give information based on personal biases.” (Representative, Farmer’s Union) (Razzaz, 2017, p. 49).

Secondly, there is widespread frustration with the government’s focus on certain sectors. In the NES this is on non-traded sectors, while the JC only provides benefit for increasing employment in a traded sector; manufacturing. This frustration is expressed in interviews with key stakeholders from labor organizations in Jordan. “The construction business is at its lowest scale for years now”, yet “the government is more concerned about employing Syrians than employing Jordanians” (REACH, KII, n.d.). Additionally, the representative from the General Association for restaurants and sweet shops owners, mentions how the “Jordanian-Syrian ratio

(60:40) set by the Ministry of Labor is not helping the business owners, especially fast-growing restaurants. This is why owners are illegally hiring Syrians and other foreigners” (REACH, KII, n.d.). Sometimes Syrians are hired in professions they are perceived to be skilled in only to train Jordanians and get fired immediately after.

Thirdly, although distinctions between Jordanians and Syrians are clearly visible in the labor market, the JC attempts to increase employment for both groups in the same professions, consequently ignoring the widespread segmentation between sectors, which are based on nationality rather than education or skill. “My workers are 65% Syrian, 25% Egyptian and 10% Jordanian. I hire Egyptians for hard work like spreading manure. I hire Jordanians as drivers and guards. I hire Syrians for picking, sorting, and packing” (Farmer) (Razzaz, 2017, p. 51). Migrant workers are not mentioned within the JC, while the biggest competition is between migrant workers and refugees. Generally, refugees and economic migrants are hired sooner than Jordanians since they accept worse working conditions and lower wages. “Foreign workers are ready to sleep at the factory if their employers want because they come here just to make money and work. Jordanians have families and commitments and can’t do that” (Farmer) (Razzaz, 2017, p. 10).

This competition between foreign workers relates to family commitments, living situation, mobility, and a preparedness to accept bad work conditions. Economic migrants have fewer family commitments since they have come to Jordan only to work and send most of their money home. Syrian refugees, however, have their families with them, making them more

limited in the jobs they can accept. Notwithstanding this, they do spend their money in Jordan which is beneficial for the economy.

Furthermore, the data shows that the expectations and skills of Jordanians differ from the rest of the workforce. To decrease Jordanian unemployment these need to be taken into account. “Generally speaking, mechanizing any aspect of construction leads to employing more Jordanians. Using machines, systems, or equipment reduces manpower needed but requires higher skills. And the majority of skilled construction workers are Jordanian.”(Construction contractor) (Razzaz, 2017, p. 19). So far this has not been part of the strategy of the JC.

Fourthly, the work permit process was not effective in increasing formal employment of Syrians. “The work permit system doesn’t work for our economy. We can’t promise someone we can employ them for a whole year. Sometimes we know the work is only short term. Other times, because of the economy, we just can’t take the risk. Not to mention having to pay social security. It’s just not possible for us”(Construction contractor) (Razzaz, 2017, p. 11). Most employment opportunities are shorter than a year, especially in the sectors where refugee employment is promoted. This causes many employers to find the labor permit process too complicated.

Lastly, there has not just been an information gap between the needs of employers and the government, but also between employers and employees. On the one hand, employers claim: “I would hire a Syrian any day. Just tell me where they are and I will go hire them tomorrow”(Factory owner) (Razzaz, 2017, p. 103). On the other hand there seems to be a flaw in communication as Syrians express the following: “We really want to work but no one has approached us to work in the manufacturing sector”(Syrian, agriculture worker) and “whenever

an agency approaches us asking if we want to work in factories, we always sign up. We wait and wait, but no one ever gets back to us”(Syrian, unemployed) (Razzaz, 2017, p. 104). Hence there does not seem to be an unwillingness of Jordanian employers. Out of the sixteen business owners interviewed by REACH, fourteen would hire Syrians. The two that would not, refer to negative generalisations of Syrian people; “they are not honest people, greedy, and not comfortable people to work with” (REACH, KII, n.d.). Those who would consider hiring Syrians claim to select employees on the basis of who is the most skilled for the job. Yet there were also a few examples saying they would consider hiring Syrians for “humanitarian reasons” or “to help them” (REACH, KII, February 26, 2017). This sentiment is also present in the ILO data: “We can send Egyptians back to their country but where would we send Syrians? We won’t be able to sleep at night if we’re sending Syrians to a regime that just sheds their blood” (Ministry of labor, Inspector) (Razzaz, 2017, p. 48).

These findings thus largely confirm the hypothesis claiming that certain relevant particularities of the Jordanian economy have not been accounted for in the JC. There is a lack of job-matching by the government and a mismatch between demand and supply of labor. Furthermore, the work permit process has not only been too complicated for employers and refugees, but also costly and incompatible with the needs of employment timewise. Nevertheless, the relative underdevelopment of the Jordanian private sector is impeding the private sector to make use of the benefits offered through the JC (personal communication, May 29, 2019).

5.2 Refugee Needs and Constraints

The second hypothesis refers to a lack of recognition for the needs and constraints that come with being a refugee as causing the lack of formal labor. A possible cause of this could be the absence of stakeholders capable of representing Syrian refugees in the process of drafting the JC (Grawert, 2019). The principal intention of Jordan’s government was to increase support from the international community and boost its own economy (personal communication, May 29, 2019). The main reason for the EU to engage in the JC was to improve livelihoods of Syrian refugees in order to prevent a “lost generation” (personal communication, May 29, 2019). While the theory underpinning the JC puts forward the notion that integrating refugees should suffice in creating economic growth, the Jordanian government is supposedly rather skeptical about this (personal communication, May 29, 2019). Even though one of the two main partners, namely the EU, is engaged in this partnership in order to protect and empower Syrian refugees, the JC was drafted during a momentum which was resolved to put host governments in the driver’s seat.

Another party often perceived as capable of representing refugees are humanitarian actors. Nevertheless, the development-led approach taken in dealing with refugees is put in contrast to a humanitarian approach. Assuming humanitarian organizations are capable of representing the interests of refugees becomes problematic once the policy one is trying to implement is signified by a move away from the humanitarian sector.1 _{While humanitarian help}

is generally concerned with emergencies, the temporal context in which Syrian refugees in Jordan live is one of protracted nature. This disparity between a humanitarian approach and the objectives of the JC becomes clear in the ILO interviews. “I’m worried that if I get a work permit I will lose my cash assistance and then my boss will fire me after a few months. That way, I will end up with no income from either side and there will be nothing I can do about it. I can’t stop my boss from firing me for no reason, and I wouldn’t be able to ask UNHCR to put me back on cash assistance.” (Syrian, Agriculture worker) (Razzaz, 2017, p. 106). Even when refugees might be able to obtain a work permit and get access to formal employment, they might choose to remain reliant on humanitarian aid. “The cash assistance is less than what we get if we are working in manufacturing, but at least it’s guaranteed and consistent. If we work, then we lose the cash assistance. The job is more money but is likely to be temporary. It’s not worth it.” (Syrian, day laborer) (Razzaz, 2017, p. 106).

Besides the risk of losing humanitarian aid, several other risks part of life as a refugee constrain their work opportunities. A common denominator in the FGDs is security. Even when work opportunities open up, at first sight, these seem to depend on the willingness of Syrians to make use of them, however, “their willingness depends on ability and ability depends on security” (REACH, FGD, February 9, 2017). The prevalent sense of insecurity is caused by several issues. Firstly, obtaining a work permit means becoming registered and many refugees are afraid of personal information falling into the hands of the Syrian regime. Secondly, there is a fear of being deported due to lacking a work permit or legal sponsor. Because of the lack of registration, a general unwillingness to travel long distances prevails, since respondents do not

want to stay away from their families for too long and risk being arrested. Lack of protection is also a widespread feeling: “Syrians believe that Jordanian labor law doesn’t protect them even if they have work permits, as one of them had been threatened by a Jordanian tribe because he didn’t want to continue working with them for not receiving any payments from them” (REACH, FGD, February 13, 2017). Thus proximity to work opportunities is related to security issues, especially for unregistered refugees. Additionally, transportation costs also pose a barrier to employment. “I am willing to work in anything. But I cannot leave this city if the job I get does not enable me to rent a place and sustain my family. Here I am living without any expenses because I have relatives, so I can get by. If I go to another city, I won’t have that so the job I get needs to compensate me for that. I would move for a manufacturing job if I could get a salary of 300 dinars a month, but I can’t afford to do it if I don’t get that much” (Syrian, unemployed) (Razzaz, 2017, p. 13).

The proximity of camps to work opportunities is what inspired the use of SEZs in the JC (Di Porcia, n.d.). It is important to note that less than 20% of registered refugees in Jordan live in camps. It is exceptional that such a large percentage of refugees manage to cope rather well outside of the camps, which likely has to do with connections through religion, tribe, or family (personal communication, May 29, 2019). The large amount of unregistered refugees bears consequences for policy intending to integrate them into the formal labor market, requiring a form of registration. “My family decided it’s not a good idea to get work permits because we are trying to leave the country. Having a work permit would make that harder” (Syrian, restaurant worker) (Razzaz, 2017, p. 119). It might, therefore, be a conscious decision for refugees to

remain unregistered. A FGD showed how little resources there are to gain knowledge of work opportunities, as “they don’t have resources such as internet, magazines, papers, only advertisements that they see, or by word of mouth” (REACH, FGD, February 9, 2017).

Not only does the fact that many refugees remain unregistered make it more difficult for them to be informed, but it also raises issues for the government to effectively implement policy intended to improve their livelihoods. Therefore, understanding the reasons for not being registered is crucial for the success of the JC. This is both in the interest of refugees as it will lead to more suitable work opportunities, but also because it enables the Jordanian government to track and show outcomes of the JC better. While previously governments were incentivized to keep refugees encamped as it enabled them to show their presence and ask for humanitarian aid, the JC changed this incentive to show the amount of work permits, regardless of whether refugees are settled in camps or urban areas.

Many of the job opportunities offered through the JC do not match the refugee population. Work opportunities in SEZs are focussed on encamped refugees, while the majority of refugees are settled in urban areas. Additionally, current work permits do not always offer more benefits to refugees than when remaining reliant on humanitarian aid. The stakeholders present at the drafting of the JC also do not perfectly represent Syrian refugees. Notwithstanding this, it is a rather common picture that those affected directly by policies do not get a seat at the negotiation table. Yet a principal-agent problem is inclined to occur in this situation as the Jordanian government becomes the agent of the EU and by extension Syrian refugees, while having divergent interests as long as the government’s skepticism concerning refugee potential

remains (Eisenhardt, 1989, p. 58). The policy of employing Syrian refugees in SEZs exemplifies this, as questions tend to arise concerning whether this boosts economic employment or rather exploitation of refugees due to bad labor conditions. Moreover, the lack of recognition for refugee needs and constraints on the one hand and the little resources informing refugees of their opportunities, on the other hand, creates a situation of asymmetric information. The hypothesis can thus be confirmed that misaligned incentives cause the needs and constraints of refugees to be overlooked within the JC.

5.3 Securitization of Syrian Refugees in Jordan

The last hypothesis states that the presence of security issues associated with refugee influxes, such as the fight against terrorism, violent extremism, and radicalisation, prevents the effective use of refugee resources in fostering economic growth. In 2016 several major terrorist incidents took place in Irbid, Kerak, al-Baqaa camp, and the al-Jafr air base (Milton-Edwards, 2017). These terrorist attacks were performed by Jordanian home-grown terrorists. Above mentioned security issues are high on the agenda for Jordan, both as external and internal threats. The increase of terrorist attacks on Jordanian soil following the Syrian conflict has likely more to do with internal radicalisation and migration of Jordanians to Syria than the influx of Syrians refugees. Jordan is in the top 3 of countries with most foreign fighters that have left to Syria or Iraq, some of them already starting to return (Barrett, 2017). This has been a major point of concern for the Jordanian government (personal communication, May 29, 2019). While it is

Jordanian nationals rather than refugees causing these security threats, security issues such as radicalisation are linked to economic issues. Lack of opportunities for economic participation of the youth could stimulate radicalisation (Al Sabaileh, 2018). Hence the impact of the refugee influx on the Jordanian economy, in turn, affects the national security and political instability of Jordan (Younes, 2018).

The interrelated nature of these issues is recognized in both the JC and the ENP. The ENP concerning Jordan is structured around three mutually reinforcing objectives, one being “regional stability and security, including counter-terrorism” (EC, 2018). King Abdallah II of Jordan has voiced various security concerns both to the international community and nation-wide. While Jordan has prided itself on its open-border policy at the start of the Syrian crisis, border restrictions increased as the conflict went on, followed by international criticism. King Abdullah reacted by asserting that “elements” of Islamic State were among refugees stranded in border zones, hence they would be “going through a strong vetting system”, implying the risk of importing terrorists while admitting refugees (BBC, 2016).

An important side note to this border policy is that it seems more correct to focus on the relation between border zones and insecurity, rather than Syrian refugees in general and insecurity. A suicide attack on a Jordanian army base in the Rukban refugee camp on the Syrian-Jordanian border in 2016 led to the security vacuum that came to exist along Jordan’s northern borders (Ibrahim, 2018). Furthermore, the issue of borders also relates to the Jordanian economy since the securitization of borders meant cutting off of key trade routes.

Although fleeing from the Syrian conflict is a central part of the refugee identity of many Syrians in Jordan and risk of spill-over has serious consequences for Jordanian security, the link between refugees and these security issues is not as straightforward. Jacobsen’s argument that “insecurity reduces the economic vitality of the community and offsets any economic advantages that might accrue from refugee resources” only seems to be true when insecurity is directly and solely related to refugees. Yet in Jordan, security issues are not limited to refugees as a cause. The refugees that are considered a security threat are separated into isolated sections of refugee camps (personal communication, May 29, 2019).

Research by the ILO established that “85% of Jordanian workers feel that Syrians should not be allowed to enter Jordan freely, while 65% state Syrians should be limited to living in refugee camps” (Stave & Hillesund, 2015, p. 113). Nevertheless, this likely has more to do with the sentiment that Syrians threaten the financial security of Jordanians in terms of job competition, rather than a fear of Syrian refugees in security terms. Moreover, in an interview with mayor Abbas Maharmeh Syrian refugees are described as follows: “Syrians are not refugees, foreigners, we treat them like citizens. We’re happy to do our duty to our brothers” (Betts, et al., n.d., p. 14). Maharmeh is mayor of the Sahab municipality, part of the Amman governorate, where 2018 saw the highest amount of work permits being issued. The discourse of Maharmeh concerning Syrians shows a complete lack of securitization. Since the act of securitization is not limited to the highest levels of government officials and since research by Betts et al. has concluded that “municipal authorities are key actors” in facilitating economic

empowerment of Syrian refugees and Jordanian citizens, the lack of securitization in this narrative is striking (Betts, Ali & Memişoğlu, n.d., p. 28).

Using the JC as a test case of the securitization hypothesis is especially interesting in terms of using securitization as a transversal political technology, or rather a way for politicians to mask certain failures by shifting attention to different concerns, such as refugees. On a national level, the government of Jordan has reason to shift public focus following a rise in threats to its political stability (Younes, 2018). Yet on an international level, the government gains the most by attempting to prove an increase in employment of Syrian refugees through the issuing of work permits, something that is more difficult when refugees are framed as security threats. Securitization inhibits economic integration and exactly economic integration of refugees is needed for the government to receive the most benefits.

All in all, this suggests that this hypothesis can be discarded in explaining the lack of progress of the JC in integrating Syrian refugees into the formal labor market and benefitting the host population. A risk in testing most securitization hypotheses is that once you look for it, it is easy to find examples suggesting securitization of an issue, whether it is justified or not. Nonetheless, the reasons for why state actors might use securitization of refugees as a political strategy is contradictory to their aims of increasing benefits derived from international agreements such as the JC. Moreover, it would not be justified to perceive Syrian refugees as the cause of security issues within Jordan when it is more so the case that Jordanian nationals pose security threats related to terrorism, radicalisation, and violent extremism.

6. Discussion

The findings prove that effectively employing refugee resources to the benefit of a host economy is highly context-dependent. The conditions brought forward by the literature related to the economic context in terms of labor market and private sector, the particularities pertaining to a refugee population, and the perception of refugees by those responsible for creating work opportunities. Within the literature, this latter condition mostly concerned a perception of refugees through a security lens. While this research did not find the securitization of refugees as a cause preventing economic empowerment of refugees, it did find the perception of refugees in terms of their skills and ability to benefit the host economy as determinative of the JCs success.

One of the most important takeaways is that the incentive framework of the different actors needs to be aligned. The JC showed that the private sector was incentivized to hire more Syrians in return for trade benefits, but due to being underdeveloped was not (yet) capable of benefiting from this. In terms of government, the JC signifies a shift in incentives. Previously, the Jordanian government could capitalize on the link between refugee encampment and humanitarian aid, while now the government is incentivized to show refugee employment through work permits in return of development advantages. This differs from actual belief in the capability of refugee employment as a benefit to the economy. Furthermore, obstacles in obtaining work permits de-incentives refugees to apply. Additionally, humanitarian aid reduces the need for refugees to opt for formal employment. Related to this is the fact that humanitarian

actors do not suffice in representing protracted refugees due to the discrepancy between their work in emergency situations where refugees are reliant on help vis-à-vis longer term refugee settlements that call for economic empowerment and promotion of refugee self-sufficiency.

Above all this study has shown how interrelated these factors are. The types of economic advantages refugees have to offer, depend on their settlement both temporally and spatially, which is in turn guided by government policy based on the perception of refugees within a country. Nonetheless, these factors can be accounted for individually to increase the chance of a policy like the JC succeeding. Therefore, the lack of job-matching, complicated work permit process, and an underdeveloped private sector prevented the Jordanian economy from benefiting directly from the JC in 2016-2018. Obstacles due to settlement, fear of the consequences following registration, and a lack of information on work opportunities inhibited Syrian refugees to make use of the opportunities offered to them following the JC. The lack of recognition for these factors could thus relate to the absence of stakeholders capable of representing Syrian refugees at the negotiation table of the JC.

Still, this research shows the effect of the JC not to be completely unavailing. A distinction can be made between the factors outlined above and the element of time as causing the lack of results. By only focussing on the first two years, the JC has not had a lot of time to take effect. Employing a Syrian refugee will not show results the next day, nor does easier access to the European market mean that Jordanian private sector is immediately able to export products adhering to the right standards. Some of the changes necessary for the JC to show positive results need more time to take root. This could be an interesting starting point for research into the JC

post-2018. Besides this, a gender dimension to conditional funding or the effect of the JC on labor conditions and child labor were outside of the scope of this study, but are noteworthy suggestions for future research.

Hence, while the continuous critical assessment of the JC is needed to account for the factors that have prevented it from reaching its objective until now, spotlighting these findings contributes to the paradigm shift of a development-led approach to refugees rather than a humanitarian one. In doing so, it offers the necessary insights for future policy to turn the tragedy of the century into an opportunity for the future.

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