A viable reality: Including refugees economically

16 June 2020
Interview with Filippo Grandi, UN High Commissioner for Refugees

Evelyn Seltier of the International Trade Forum had the opportunity to talk with Filippo Grandi, United Nations High Commissioner for Refugees, to discuss the economic opportunities for refugees and host communities and the impact that the COVID-19 crisis has had on them.

Mr. Grandi, how can refugees and host communities benefit from economic inclusion?

Refugees and host communities live side-by-side and depend on each other for market linkages, access to goods and services, and exchange of skills and experiences. Granting refugees access to market systems and to the formal labour market, while also implementing programmes that support vulnerable host communities, can bring economic and fiscal benefits to the whole society. Refugees with access to decent work can fill labour shortages, have greater workplace protection, increase their income and spending, and contribute to the host country’s tax revenues.

What are the main channels through which we can achieve refugee economic inclusion?

Refugees’ inclusion into market systems depends on how conducive the host country’s legal and policy environment is to their self-reliance -- the rules and regulations governing refugees’ freedom of movement, their legal right to decent work, inclusion in social protection systems and in government training programmes, and access to financial and physical capital. Today, most refugees live in countries where such rights are denied.

By engaging a broad range of public and private sector actors, this can and should be changed. Policymakers have a key role to play in granting refugees access to the labour market, freedom of movement and inclusion in social safety nets. The private sector can provide refugees with training and employment. Financial institutions can assess refugees’ entrepreneurship potential and provide access to financial services, including investment capital. Civil society can advocate for refugees’ inclusion in the workforce – and development finance institutions can support these actions by establishing sustainable, blended financial mechanisms.

How can access to markets, in particular global markets, promote economic inclusion for refugees?

In many countries, refugee camps are located in isolated and/or rural areas with limited access to transportation, resources and markets. If the surrounding communities are few or limited in size, there is a risk that markets are saturated, and skills quickly become obsolete. Access to larger, regional or international markets opens opportunities for production, trade and access to goods not available locally. The major challenges that refugees face when taking local products to global markets are complex logistics, trade barriers, limited access to financial solutions and inadequate marketing. An example of an innovative way UNHCR has responded is by building MADE51.

MADE51 is one of UNHCR’s global brand and flagship initiatives that creates livelihood opportunities for refugee artisans by linking their products to international markets. The initiative harnesses refugees’ traditional skills and connects them with local social enterprises that have experience in marketing, exporting products to international consumers, and adhering to Fair Trade standards. For their part, the enterprises receive technical support and gain greater access to international markets.

MADE51 is active in 16 countries, working in partnership with 22 social businesses, and supported by an international network of strategic partners who contribute technical skills and sector expertise. This collaborative model demonstrates the spirit and intention of the Global Compact on Refugees, which aims to enable refugee self-reliance and ease pressure on host communities.

What about integrating refugees into global value chains?

For refugees to access scalable opportunities, beyond limited or local markets, it is important to integrate them as producers, workers and consumers in an effective market system, specifically in value chains with market potential. For effective inclusion, the value chain should be relevant to their skill set and educational background, accessible in terms of rules and regulations, safe in terms of work environment, and respondent to their needs.

Such interventions must be based on a solid understanding of existing market conditions and challenges, as well as follow a holistic approach, combining actions that build the employability and capital of refugees to engage with the economy (such as access to credit, skills development, transfer of assets) and remove market bottlenecks that hinder refugees’ right and access to employment. Moreover, these interventions should demonstrate that refugees can add value to the local economy, as hosting refugees can bring additional private sector and development actor investment that benefits all.

How can refugees or displacement-affected communities and their hosts influence or promote economic inclusion?

Refugees and hosts need to be well informed about rights regarding labour market access and employment. They need to proactively identify opportunities to get certification, participate in mentorship, internship or apprenticeship programmes, seek to learn the local language and use informal job networks through civil society. When given a chance to work or invest in a business activity, refugees can and will contribute to the host country’s economy as producers, buyers and consumers. Access to information through market studies and knowledge sharing has an important effect on promoting the economic inclusion of refugees.

What is the impact of COVID-19 on the progress for refugee economic inclusion and business?

The global challenges posed by the pandemic require international cooperation, through practical immediate and long-term measures to support low- and middle-income host countries whose health and social protection systems are already strained. All marginalized communities are affected by COVID-19. The global lockdown is influencing refugee businesses and formal and informal workers. The International Labour Organization predicts that some 1.6 billion people, nearly half of the global workforce, will lose their livelihoods. Food security, already a challenge pre-COVID, is affecting displaced populations globally.

On top of that, we see that achievements already made towards inclusion in social protection systems, trading and labour markets are impacted and sometimes completely retracted, including the right to seek asylum, as borders are closed. When the whole economy is affected, refugees are often the first to lose their job or trading opportunities.

There are glimmers of hope. Some countries are taking a proactive approach and hiring refugee doctors and nurses to fill key labour shortages. We see refugee entrepreneurs across Africa using their tailoring skills to produce masks and other sanitary equipment for the community. We know that refugees and other populations of concern wish to contribute to the social and economic fabric of their host country and we must do more to support this.