The economy of a refugee camp

This article was published by Executive Magazine on 20 February, 2012

As Syrians in Zaatari camp in Jordan settle in for the long haul, the aid system develops

“I am buying make-up to look beautiful for my husband,” proclaims Manal Ahmad Ibrahim, while checking out mascara priced at $1.50. Run by Naqil Bardash, a former hotel manager from Daraa, the shop in the Zaatari camp for Syrian refugees in north Jordan sells second hand clothes, tiger print briefs andeven rents out wedding dresses.

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Naqil Bardash’s store (photo: Fernande van Tets)

A bit further into the camp, the “Freedom Café” offers cheap coffee, tea and conversation. Owner Omar Siran bought his set up — primarily a stove and a gas burner — for $70. Having established it three months ago, he says he now serves hundreds of customers daily. A cup of coffee will set you back $0.50, of which he says he pockets $0.07 as profit to spend on supplies and vegetables for his house.

Bardash and Siran’s stores are but two of the more than 100 that line the dusty street of Zaatari, where a lack of regulation has helped a pseudo free-market develop. Setting up shop is cheap; there are no laws and building materials can be scrounged from around the camp — the benches at Siran’s store were made from UNHCR blankets wrapped around planks of wood. 

Refugees buy goods using their savings or some have work; residents in Zaatari can earn up to $8.50 a day through a cash-for-work program run by various agencies operating in the camp, while teachers earn $310 a month.

A central plan

But entrepreneurs like Bardash and Siran are set to face a shake-up as the World Food Programme (WFP) is changing the way aid is distributed in the camp. Currently, the vast majority of the basic needs of the 120,000 refugees are met by UN agencies and NGOs directly: the WFP distributes bread, lentils, rice, sugar and oil, UNHCR provides tea, tomato paste and hummus, while the Danish Refugee Council provides hygiene kits. Most basics are available for free, but acquiring them involves a lot of standing in line.

But as the numbers of Syrians arriving at the camp has increased rapidly – with over 2,500 per day this week – aid agencies are being forced to rethink their proceedures. Under the new system, which will be introduced gradually in the coming months, agencies will no longer hand out resources. Instead, refugees will be given vouchers to spend on what they want in designated larger stores. The first two of these have opened, with another 16 planned and the possibility of more as the population increases.

Due to the peculiarities of the camp’s management structure, many successful shops in the area are excluded from applying to be involved in the scheme. This is because the WFP provides the cash-for-food assistance programs but the running of the camp — and thus the market inside it — is in the hands of the Jordanian government. As such larger stores will be established from which the refugees can buy their goods, potentially undermining those already succeeding.

“The market facilities in the camp will be set up by around 20 local community-based organizations (CBOs); each CBO is linked with local wholesalers in the Mafraq and Zaatari areas,” says WFP Public Information Officer Dina El Kassaby. “This arrangement serves as a link between Zaatari and the surrounding local community.”

The WFP describes the new system of food vouchers as ‘win-win’, as it allows refugees to choose what they buy at the same time as supporting the local economy. The body says part of the appeal is it will lead to a 20 to 25 percent decrease in administrative costs, largely due to the reduced number of costly expatriate staff.

“At present, it takes about $2.4 million per month to run the dry food distribution in the camp which provides food at the value of about $25 per person (per month), while the voucher program will cost slightly more but provides $40 per person,” says Kassaby.

That refugees crave more than the basics can be seen from the wide range of luxury items available elsewhere in Zaatari. Although many stalls sell fresh vegetables and cigarettes — the most commonly cited expenditures by residents — it is also possible to buy television sets, satellite dishes and perfume.

Rahul Oka, an anthropology professor at Notre Dame University who has done extensive research on informal economies in refugee camps, believes that the new system is positive as it increases choice. “When we think of refugees, we think of poor people. Very often we forget the fact that one month ago, or in their recorded memory, they were not poor people; they were engineers, doctors, shopkeepers,” he says. “They are forced to behave as though they are beggars that can’t be choosers.”

Adapting fast

News of the proposed changed does not appear to have hit the stall-owners yet, with most unaware of the coming change when asked by Executive. But Oka expects the traders to adapt quickly, and indeed beat the system. “What do people working in an NGO know about business?” he says. Refugees will be much more tuned in to their fellow Syrians needs, he adds, predicting that the vouchers, because they are backed by the WFP, may work as currency, linking into the current bartering system rather than destroying it.

And while it is the first time WFP has introduced competition into a Syrian camp, the organization isn’t worried. “In general, the more economic activity going on inside the camp, the better,” says WFP’s El Kasseb.

The introduction of the new system is a sign that refugees are settling in for the long haul. Other signs of normality are emerging: weddings are frequent; with the bride and groom often meeting in the camp. Bardash recently bought a second white gown after demand to rent the first one proved so high.

Elsewhere in Zaatari, 20-year old Ammar Kinani has just opened his barbershop on a piece of prime real estate, right next to the camp’s entrance. Kinani is the sixth barber in the camp, serving 20 customers a day. “I had never expected to own my own business this young,” he says. “I was driven to it by the circumstances.”

Read the full article here: http://www.executive-magazine.com/economics-and-policy/The-economy-of-a-refugee-camp/5527

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