Jordan Compact

Negotiating jobs for Syrian refugees.

At a London Pledging Summit in February 2016, the UK government played a leading role in concluding a deal called the Jordan Compact to support Syrian refugees. Its focus is to enable refugees, previously subject to regulatory barriers to labour markets, access to jobs. Together with Oxford colleague Paul Collier, Alexander Betts was involved in the initial development of the idea.

The stated objective at the London Summit was to create 200,000 jobs for Syrian refugees over 3-5 years. Under the agreement, Jordan reduced its regulatory barriers on refugees’ right to work. Instead of charging around 700 JOD for a work permit, and miring the processes in bureaucratic hurdles, it cut the price to just 10 JOD for most low-skilled work categories in sectors like agriculture, construction, and manufacturing, excluding some ‘protected professions’. In return, the donor community agreed to better support for the Jordan Response Plan (JRP), a pre-existing funding package to support Jordan’s capacity to host refugees, which by 2016 was only 30% funded.

Crucially for the Jordanians, the deal entails a model designed to help Jordan make the leap to manufacturing by integrating a focus on refugees into its pre-existing Special Economic Zones (SEZs) strategy. By allowing refugees to work in the SEZs, Jordan hopes to attract the additional support needed to make its own national development strategy work. Two innovations aimed to assist this. First, the EU has offered tariff free access to European markets on condition that businesses in Jordan employ a certain proportion of Syrian refugees and produce in one of 18 SEZs and in one of 52 product categories. Furthermore, if these conditions are fulfilled, the ‘rules of origin’ are also adjusted to require only 30% value addition within Jordan. Second, the World Bank has for the first time offered a Concessionary Finance Initiative, providing low-interest loans for middle-income countries hosting refugees.

Given Alexander Betts’ role in the initial development of the idea, we have continued to follow the progress of the initiative (albeit informally and not based on quantitative data collection) in an attempt to learn from the Compact.