New economic opportunities for Jordanians and Syrian refugees

In 2016, the Government of Jordan, in partnership with the international community, committed to tackling the challenge of improving the living conditions, prospects and resilience of both Syrian refugees and Jordanian host communities. Thus, the Jordan Compact was born. It is a commitment from the international community not only to support Jordan in providing a regional and global public good by hosting refugees as best as it can, but also to support Jordanian citizens and the economy as a whole.

The Program for Results: Economic Opportunities for Jordanians and Syrian Refugees was designed by the World Bank and the Government of Jordan, in close cooperation with the ILO and the UNHCR, but also with a set of development partners involved in Jordan. Since 2016, this program has supported Syrian refugees’ formal access to the Jordanian labor market to enable them to be self-reliant and contributors to the Jordanian economy. This access is at the heart of the development approach to the refugee crisis, which complements the humanitarian approach. The program has also supported the Government of Jordan in improving its investment climate — through better investment promotion, an expanded trade facilitation, reforms of business licensing and home-based businesses regulations as well as improving the predictability of business regulations — to grow its economy and be able to offer jobs and entrepreneurship opportunities for Jordanians and Syrian refugees.

This $300 million four-year program just benefitted, in June 2020, from a two year extension and an additional financing of $100 million. This extension will support the Government of Jordan in providing Syrians with more flexible work permits to reduce informality and ensure they are covered under the labor law. Only a third of Syrian workers hold a work permit, and 4 to 8% of them benefit from social security coverage. Moreover, work permits will be issued to Syrians when they renew their ID cards or where they work through mobile work permit stations organized with the support of the ILO. Outreach through UNHCR and ILO will also be key, including through the two active employment centers in the refugee camps of Zaatari and Azraq and the 11 employment centers outside of camps.

Labor force participation of Jordanian women, although higher than that of Syrian women is still low by regional and international standards, at only 15%. This can be explained by several factors including the lack of decent job opportunities, transport, lack of child care services and conservative social norms.

Encouraging the growth of child care services in the private sector is key because it will free women’s time to attend work as well as create jobs mainly for women.  To enable the expansion of child care centers and home-based nurseries, it will be important to reduce red tape and streamline registration and licensing procedures while ensuring the quality of services.

In the context of the COVID-19-induced economic crisis, enabling entrepreneurship will be key. Starting a business from home without having to rent premises, while benefitting from a light regulatory framework reduces startup cost and enables Jordanian women to circumvent the classical obstacles related to home care, transportation and social norms, as those will take time to tackle. The food, handicrafts and tailoring sectors have been opened to Syrians and mainly benefit Syrian women entrepreneurs.

The advent of the COVID-19 crisis has demonstrated the importance of social protection and digital financial services. In this regard, the program is supporting ongoing ambitious government efforts to improve social security coverage of employees of small and medium enterprises and the self-employed workers, through refinement and enhancement of the Social Security offering. Speedy enrollment of both Jordanians and refugees has been put in place, which led to a big increase in the number of e-wallets in the country to 1 million, from 0.62 million six months ago. Efforts to put more workers under the protection of social security will benefit both Jordanians and non-Jordanians. As a prelude to this approach and as part of the COVID-19 humanitarian response, UNHCR is adding 500 refugee families to the 700 households who already receive their monthly cash assistance through the e-wallet modality.

Jordan declared 2020, the year of agriculture. This strategic sector is not only important for Jordan’s food security but also because it could be an important source of high-value exports if gaps in the logistical chain are addressed. With the potential reconfiguration of value chains post-COVID, Jordan could increase its exports’ market share. The program will address these gaps while rationalizing water-use. It will also be important to improve working conditions. In cooperation with the ILO, the program will support the Ministry of Labor in regulating labor in agriculture and putting in place a new inspections system, supported by the IFC.

Using crises as opportunities to leapfrog and enact bold reforms is what Jordan has done in recent years, with the double goal of growing its economy and turning the refugee crisis into an opportunity. Effective collaboration between the World Bank, ILO and UNHCR in their support to the Government of Jordan has been key to the design and implementation of this program. By joining their forces, the three organizations can better support refugees and host communities.