What impact will the end of the Syrian refugee crisis have on Jordan’s economy?
Now that the Syrian crisis is on the verge of ending, it is expected that there will soon be a gradual return of refugees to their homes. Albeit sluggish at the beginning, the return process will kick off soon, thus we should begin a comprehensive study of the socio-economic implications of this matter.
Jordanian governments should get accustomed to preparing impact analysis and early warning modules on each and every national decision or event such as the one we will face soon.
The return of Syrian refugees is expected to affect Jordan’s economy in three ways. First, although the overall socio-economic implications of Syrian refugees reflected negatively on the economic foundation of the country, a study that I personally conducted back in 2014 showed that the refugees were contributing positively to certain macroeconomic indicators.
For example, they generate almost 20 percent of the country’s nominal economic growth. The Syrian refugees that represent almost 20 percent of the Kingdom’s population are definitely contributing to the growth of private consumption in the country. They also have some impact on direct investment, albeit not substantial. On the other hand, they do contribute to government revenue, in terms of the VAT paid on their daily transactions and consumption.
In addition, they were the reason behind much of the increase in foreign aid since 2012. The presence of those refugees has had some noticeable impact on Jordan’s foreign reserves, whether through direct remittances or aid that they receive from individuals and institutions, or through the direct financial assistance Jordan’s budget receives from donors to mitigate the implications of the refugees crisis.
Second, the presence of refugees in the northern governorates has undeniably had positive impact on those hosting communities. Whether we like it or not, those governorates—particularly Irbid and Mafraq—used to be a consumption block. Today, these refugees created some businesses in both governorates, while also benefiting existing businesses, especially small ones. Additionally, they are considered affordable labor.
Third, and most important, is the reconstruction and development of post-war Syria. The expected amount of work is huge. Russia, Turkey, and even the United States are trying to plan and agree upon their respected roles in the process and Jordan needs to be a part of this process as well. No need to repeat the Iraqi scenario where individuals benefited much more than any corporate or government body.
Jordan’s geo-political proximity, and the pragmatic position it adopted during the last seven years make it eligible to play a crucial role in this reconstruction process. However, we need to move now in order to prepare a comprehensive socio-economic plan; a plan that benefits from both the Syrian refugees as well as Jordanian manpower. It should also give enough space to the private sector to form alliances with Russian, Chinese, Turkish, and any other companies that are interested in taking part in the upcoming opportunities. One can advise to immediately turn the huge area of Zaatari camp into an industrial zone with special economic zone benefits and incentives in order to attract international companies that can easily use refugees and local manpower for rebuilding operations.
It is about time we work on the above issues and put in place a genuine early warning module for the socio-economic potentials in the Syrian crisis. A special purpose committee made up of the public and private sectors should be formed immediately for this purpose.