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One year ago, the Center for Global Development (CGD) and Refugees International launched the “Let Them Work” initiative, aiming to expand labor market access for refugees and forced migrants around the world. In this post, we explore what has changed in the last year in four countries—Colombia, Peru, Ethiopia, and Kenya—and what challenges remain.

The context

One percent of the global population is now displaced⁠⁠—including 26 million refugees, 4.2 million asylum seekers, and 3.6 million Venezuelans abroad. The vast majority live in low- and middle-income countries, where they often face legal and practical barriers to entering the formal labor market. These barriers not only affect refugees’ self-reliance and well-being, but they also create a wide range of costs and forgone benefits, including lower economic productivity for the host country and forgone tax revenues.

Given the protracted nature of refugee crises, the need to enhance refugees’ socio-economic wellbeing has been a focus of recent years. Indeed, “self-reliance,” (defined by UNHCR as the ability of refugees to actively participate in the social and economic life of host countries) is one of just four key objectives of the 2018 Global Compact for Refugees. Moreover, the presence of new actors, such as the World Bank and the private sector, has led to an increasing focus on refugees as economic contributors to their host communities. This emphasis on sustainable livelihoods and self-reliance interventions in host countries was a major focus of the 2019 Global Refugee Forum, where participants agreed that expanding labor market access for refugees was a necessary step.

While the global context has now shifted with the COVID-19 pandemic, research continues to affirm the importance of expanded labor market access for refugees and forced migrants. As new analysis from CGD, Refugees International, and the International Rescue Committee shows, refugees will be disproportionately affected by the economic impacts of the pandemic, but refugee-hosting countries can take steps to safeguard refugee livelihoods, ensuring the benefits they provide to host communities continue to flow. Here, we look at progress made in four countries in particular over the past year, and highlight the challenges raised by COVID-19.

Progress on labor market access in the past year

Colombia, Peru, Kenya, and Ethiopia, are all within the top 15 refugee-hosting countries, together hosted almost four million refugees, asylum seekers, and displaced Venezuelans in 2019.

A map showing refugee populations worldwide

Notes: Number of refugees hosted (UNHCR Refugee data finder where “refugees” includes the UNHCR categories of “Refugees,” “Asylum Seekers,” “Venezuelans displaced abroad,” and “others,” discounting those with the same country of origin to their country of destination. Palestinians under the mandate of the UNRWA are not included.

Colombia

Colombia has taken major steps to integrate displaced Venezuelans into its economy. By May 2019, it had regularized around 784,234 Venezuelans through the continued roll out of Special Stay Permits, and in July 2019, it introduced a new permit that would allow foreigners to obtain formal work even if their immigration status was irregular.

Despite this progress, many Venezuelans still struggle to access the formal labor market. Acknowledging this challenge, in October 2019, the government of Colombia prepared a strategy to promote the economic integration of Venezuelans. The strategy identifies 45 policy, institutional, and financial barriers that prevent Venezuelans from joining the Colombian labor market. It proposes solutions based on employment and entrepreneurship, and establishes 85 actions to be implemented in priority areas. The strategy is a major step towards Venezuelan economic inclusion in Colombia.

However, the COVID-19 pandemic presents new challenges. Colombia entered a lockdown and a state of emergency, leaving many Venezuelans unemployed and in an increased state of precarity. While the government of Colombia created a six-point action plan to include Venezuelans in the national COVID-19 response, many are still suffering and making the unthinkable trip back home.

Furthermore, increasing social tensions and limited international support are pressuring Colombian institutions, which, paired with the global economic crisis, threaten the roll-out of Colombia’s integration strategy towards Venezuelans.

Peru

Initially, Peru welcomed Venezuelans, providing them with a Temporary Stay Permit (PTP) that regularized their stay, opened a pathway to residency, and allowed them to work, among other benefits. However, in January 2019, Peru issued the last round of PTPs, and as of June 2019, requires a visa and passport for all Venezuelans—a policy that has had the unintended effect of increasing the number of irregular entries. Asylum has, therefore, become the only avenue for Venezuelans to regularize their stay.

While restrictions to regularization have increased, some government agencies have taken steps on their own to expand and tailor their services to the Venezuelan population. For instance, the Peruvian Labor Ministry opened a line to report harassment at work to Venezuelan workers. Similarly, the Peruvian Ministry of Education reduced the costs and implemented innovative ways to validate diplomas of Venezuelan professionals. Nevertheless, in Peru, barriers to economic inclusion remain, even for those with regular status.

Despite the limited policy progress, at the Global Refugee Forum in December 2019, the Government of Peru pledged to provide residence permits to asylum-seekers, promote family reunification for refugees, and acknowledge qualifications for doctors, teachers, and engineers.

Amidst the COVID-19 crisis, Peru made significant progress in acknowledging the qualifications of Venezuelans by issuing a decree that allows Venezuelan doctors to temporarily work in Peruvian hospitals and contribute in the fight against the pandemic. Furthermore, the Government of Peru is also implementing measures that allow Venezuelans that allows Venezuelans to apply for asylum and change their migration status virtually during the lockdowns.

As Peru suffers from the devastating economic effects of COVID-19 and xenophobia continues to rise, it is uncertain whether the government of Peru will follow through with its forum commitments, particularly those related to Venezuelan economic inclusion.

Ethiopia

In January 2019, Ethiopia’s parliament revised its refugee law, making it one of the most progressive refugee policies in Africa. The new law enables refugees to obtain work permits; access primary education; obtain drivers’ licenses; legally register life events (such as marriages); and access financial services, including banking and other financing. Ethiopia has also committed to creating 30,000 jobs for refugees in industrial parks and elsewhere, which are already being constructed throughout the country.

The government’s Plan of Action for Job Creation 2020-2025 includes strategies to integrate refugees and internally displaced people into the formal labor market. In support of these commitments, a wide range of development partners are developing and implementing programs to support refugees’ economic integration within the new policy framework.

Despite this progress, implementation has been slow. The law has yet to be ratified by the Ethiopian parliament, and the specific policy moves mentioned in the law have not yet taken effect. Compounding these delays, COVID-19 has created uncertainty around future implementation. Even before the outbreak, high rates of unemployment in urban areas and the lack of developed markets around camps made it challenging to create economic opportunities for refugees. The politics of refugee integration were also highly contentious.

Now, with COVID-19 devastating economic activity worldwide and creating anti-refugee sentiments in many countries, there is a risk that implementation and economic integration will be even more difficult to achieve.

Kenya

Compared to Colombia, Peru, and Ethiopia, Kenya has shown minimal policy progress. Of the country’s approximately 490,000 refugees, some 84 percent reside in camps. Furthermore, movement throughout the country and access to formal labor markets—for those both in and out of camps—is highly restricted.

The largest camp in Kenya, Dadaab, sits along a porous and unstable border with Somalia. The government has repeatedly announced its closure (including this past year), though no such moves have been carried out. Entire generations of refugees remain “stuck” in Dadaab, many with few prospects for livelihoods or access to the labor market.

However, there have been some positive developments. In 2019, the national government published a new Refugee Bill that, if signed into law, would facilitate refugee registration—an important step towards economic inclusion. Progress is even more promising at the local level. The Turkana County government, for example, has incorporated refugees into local development plans.

Acknowledging the benefits refugees bring, officials in the county have also expressed a strong willingness to further incorporate refugees—many of whom have been there for decades—into the local economy. This suggests that they may be room for incremental policy improvements at the local level, including through lower restrictions on freedom of movement.

However, as is in most other countries, COVID-19 has stalled the potential for progress. With most refugees living in cramped conditions in camps with limited quality healthcare, humanitarian actors and government officials are focused on keeping COVID-19 out of camps.

It remains to be seen whether anti-refugee sentiment and lagging growth following the outbreak will continue to curb progress, or if incremental change at the local or national level will re-emerge as a possibility.

Remaining challenges

While progress in some countries over the past year offers grounds for optimism, the health and economic impact of COVID-19 represents the biggest challenge to expanded labor market access today.

New analysis from CGD, Refugees International, and the International Rescue Committee (IRC) finds that refugees will be disproportionately affected by the economic impacts of the pandemic. Based on data from eight refugee-hosting countries (Colombia, Ethiopia, Iraq, Jordan, Lebanon, Peru, Turkey, and Uganda) the report finds that refugees are 60 percent more likely to be working in highly impacted sectors such as accommodation and food services, manufacturing, and trade. They are also more likely to be working in the informal market.

As a result, COVID-19 will likely lead to widespread loss of livelihoods and an increase in poverty among refugee populations. These impacts will be exacerbated by the fact that COVID-19 has made it more difficult for refugees to access the labor market, social safety nets, and aid provided by humanitarian organizations.

As refugee-hosting countries face looming economic recession, increasing unemployment, and rising xenophobia, there is a risk of increased public skepticism of refugees’ economic inclusion. Negative narratives about the impact of refugees’ economic inclusion on the employment rates and wages of host populations are already increasing. This is despite evidence showing that increasing economic inclusion, and thereby allowing refugees to diversify the sectors they are working in, has positive overall effects and is unlikely to have negative impacts on host community outcomes in the long-term.

Such sentiments, coupled with pressure on public budgets, may lead to a reduction in political will for such efforts. This already seen in Colombia, with increased xenophobic rhetoric among local governments stalling the progress made. And in all four focus countries, governments are likely to have other, more pressing concerns, such as alleviating the effects of the pandemic and economic crisis. COVID-19 therefore runs the risk of causing progress towards economic inclusion to stagnate, or even backslide.

Beyond COVID-19, other challenges remain. Even before the pandemic, refugees and asylum seekers, including Venezuelans displaced abroad, faced barriers that limited their labor market access and economic inclusion. These include diploma validation—an issue in all four focus countries—as well as obstacles to registering businesses, accessing credit lines, moving freely, and owning land.

Women are particularly affected by the legal and practical barriers to labor market access, leaving them even more vulnerable especially during times of COVID-19. Such barriers vary from country to country and are unlikely to improve in the near future, especially as COVID-19 affects political will to mobilize on this front.

The way forward

As COVID-19 threatens the prosperity and stability of countries across the world, it is imperative to keep refugees’ economic inclusion at the forefront of the conversation. Increasing economic inclusion has a variety of benefits, including raising productivity and wages of refugees and host populations, increasing purchasing power that boosts local businesses, increasing tax revenue, and reducing crowding into the informal sector—all are potential sources of stimulus for host communities during the recovery.

While the economic crisis and rising xenophobia might push policymakers to exclude refugees from their response, the continuous marginalization of refugees only serves to increase their vulnerability and exacerbate the problem. If the pandemic shows us anything, it is that including refugees as part of the response and the solution is important to build a more inclusive and resilient society that leaves no-one behind.

Disclaimer

CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.

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Center for Global Development and Refugees International