Jobs for refugees in transit: the new aid conditionality

A fundamental reshaping of European and UK aid strategy may be happening under our noses, with little public scrutiny. The so-called “jobs compact” for Ethiopia announced at the UN’s September summit on refugees and migrants is a prime example but has provoked little reaction.

This package of UK aid and EU soft loans would be unremarkable in its aim to create 100,000 jobs through construction of a couple of business parks, were it not for the eye-watering price tag of $500 million. The premium reflects the condition that 30% of the jobs must be offered, not to Ethiopians, but to applicants from over 700,000 refugees. Mostly from Somalia, South Sudan and Eritrea, these refugees are currently stuck in Ethiopian camps without work permits.

This job quota is designed to deter families from joining the African exodus heading for European shores. Similar compacts may be in the pipeline for other countries hosting large numbers of refugees, such as Lebanon.

Aid conditionality which reflects political expediency of the donor rather than the recipient has a terrible record. If there are flaws in these refugee compacts, it’s our task as observers to examine them swiftly.

Although the package was introduced in New York by a Vice-President of the European Commission, it has the fingerprints of a UK team, led by George Turkington, DFID’s director in Ethiopia.

These officials must be hugging themselves at the rabbits pulled from a relatively modest $100 million hat of UK aid. Working in unfashionably close cooperation with European institutions, they’ve persuaded the European Investment Bank not only to deploy its loan guarantee tools beyond European borders but also to pursue beneficiary outcomes which might normally be classed as humanitarian rather than development.

The concept of targeting aid to create jobs for refugees in transit, in the hope of snuffing out further travel, was probably inspired by a persuasive article in the Spectator by the development economist, Paul Collier, in August 2015.

Arguing that lavishing funds on refugees already in Europe would achieve little for Syria’s long term recovery, Collier preferred to focus on Syrian refugees in neighbouring Jordan:

Just minutes from the Za’atari camp is an empty industrial zone, fully equipped with infrastructure. This could be a perfect haven of employment, the means by which Europe could incubate Syrian post-conflict recovery

A “Jordan Compact” was duly announced at the London conference on Syria in February 2016. Development banks will finance the construction and operation of industrial business zones in Jordan. The EU will relax certain trade rules. And Jordan will provide work permits for thousands of refugees. This was an “innovative approach pioneered by the UK” according to prime minister, Theresa May, in her announcement of the subsequent Ethiopian initiative.

Although the Jordan programme has experienced difficulties, it’s too early for evaluation. But the jobs-for-refugees genie is out of the bottle. The President of the European Investment Bank described the Ethiopian scheme as “a showcase for Sub-Saharan Africa.” Jean-Claude Juncker has boasted that the new European External Investment Plan, of which the Ethiopia scheme is part, could mobilise up to EUR 44 billion of investments. In the UK, there are signs that migration anxiety is a fixture throughout the government’s foreign aid programme. I’ve seen those tell-tale phrases – “tackle the root causes of migration”, “strengthen the resilience of potential migrants” – pasted into DFID aid tenders, even for quite specialist interventions.

There’s no denying that these refugee job compacts press many buttons on the dashboard of innovative finance for development. Countries hosting the largest numbers of refugees on account of their proximity to the source have been neglected consistently by the aid community. Who could question the creation of jobs where none exist, in the process persuading host governments to respect human rights principles of the 1951 Refugee Convention? And the implied vision of repatriation is the solution preferred in principle by the authoritative UN Refugee Agency.

Two major reservations may stand in the way of these positive sentiments. The first observes that aid policy made on the hoof is rarely sound. The business of international development has learned the painful lesson that new ideas should be piloted before committing to scale. My guess is that pilot programmes are already out there but that research is needed to pull together their track record. The programmes in Jordan and Ethiopia are already on a scale which cannot afford to fail.

My second reservation springs from suspicion of “win-win” development programmes with more than one headline goal, especially if the goals contradict each other. Juncker’s press release boasts that the External Investment Plan will contribute not only to the 2030 Agenda on Sustainable Development Goals (jobs for locals) but also address the root causes of migration (jobs for refugees). (my phrases in italics)

There’s surely a hefty dose of naivety here. How will local families who are denied jobs by these quota systems react? Will governments shrink from the refugee quota conditions at the first sign of local dissent?

I’d like to hear more from the intended beneficiaries themselves. Do they see their futures working side by side, competent in similar skills in the demanding factory environments to be expected in special economic zones?

We know the painful answers to these questions in a European context. Just last week the UK Home Secretary, Amber Rudd, said: “(we) should ensure people coming here are filling gaps in the labour market, not taking jobs British people could do.”

Why should we impose loan conditions which we ourselves cannot contemplate?


Ethiopia pioneers in tackling root of European Migrant Crisis

European External Investment Plan: Questions and Answers

Paul Collier article in Spectator

The Jordan Compact from Leiden Law Blog