A Smart Pledge to Create Economic Opportunities for Syrian Refugees

There was a little-noticed gem among the announcements from the London conference on Syria.

The headlines focused on the $10 billion of aid that has been pledged. This money is desperately needed to tackle the humanitarian crisis that is unfolding in the region. Of course, this is only the beginning. Past pledges haven’t been delivered, and even if donors meet their promises, they also have to spend it wisely and effectively. (Much greater transparency and accountability of humanitarian aid is needed).   

But donors would be deluded if they thought that this additional aid, even it arrives and is properly used, would be enough to stop large numbers of refugees from trying to migrate. Extra food rations wouldn’t be enough to stop me from trying to take my family somewhere where I could get a job, and build a better life for me and my children.

That’s one reason why the new deal for Jordan to create economic development and opportunities in Jordan, both for Jordanians and for Syrian refugees, is so important.

Under the deal, Jordan will allow Syrian refugees to apply for work permits. In return, the EU will review its market access rules. Specifically, the EU’s restrictive “rules of origin” make it difficult for Jordanian exporters to take advantage of what is supposed to be duty-free, quota-free access to EU markets.  The US scheme, which is much less restrictive, has already provided Jordan with a transformative export boost. This is one of a number of initiatives to boost growth - another is nudging European firms to invest - which are expected to create over a million jobs in the region for the local population and Syrian refugees.

This is a terrific example of what is known (in ghastly jargon) as “policy coherence for development.” The EU will flex its trade rules to boost Jordanian exports and incomes, and so create opportunities for people living in Jordan.  This is exactly the kind of idea that we at CGD promote. (Sadly we can’t take the credit for this one. I gather it came from Oxford professors Sir Paul Collier and Stefan Dercon.)

This announcement is of course hugely welcome. Less so is the footnote that it may take half a year for the change in European trade rules to be agreed by European member states.  

There is also a deal to promote jobs in Lebanon, involving investment as in Jordan, and also a new subsidised temporary employment programme which, if it succeeds, could be a model for other countries.

In addition to opening European markets to exports from Jordan, and the measures to promote  investment and employment in both Jordan and Lebanon, there is more we can and should do to create more opportunities for people in the region. One thing that would help would be to provide most of our humanitarian aid in the form of cash transfers, rather than in kind, so that it helps generate local jobs and growth, as well as giving more choice and dignity to the refugees (CGD and ODI recommended scaling up humanitarian cash transfers in this joint report last September). Another would be to accept a larger number of migrants to our own countries, instead of expecting Jordan, Turkey and Lebanon to accommodate them.

And of course it should force us to ask some deeper questions:

1. why don’t we make the same offer to Lebanon? Which other countries are hampered by unnecessarily restrictive trade rules that prevent them from selling their goods in Europe? (Turkey is part of the customs union, so it doesn’t face the same challenges for selling goods in the EU - but it could benefit from market access for agriculture and services.)
    
2. why hadn’t we changed the rules of origin long ago?
    
3. why does it take a European policy crisis to persuade governments to look seriously at “policy coherence” reforms which are in everyone’s interests?

The media tends to reduce every development policy to billions of dollars of aid. But there are many things we can do which are mutually beneficial - making us better off as well as accelerating economic development. It is good to see donor countries exploring, at last, what else they can do.