85% of the global refugee population is hosted by low- and middle-income countries, many of which are also struggling to transform their economies and create sufficient jobs to keep up with demographic challenges. Refugee compacts – also known as ‘jobs compacts’ or Economic Opportunities Programmes – are a new policy model designed to address these two issues simultaneously. These are agreements between donors and governments that host refugees. Using grants, concessional loans and other incentives, they aim to stimulate economic development and enable host countries to provide basic services to refugees and local populations. First came the Jordan compact, rolled out in 2016. Among other policies it committed the European Union to relaxing trade regulations to stimulate exports from 18 designated industrial parks in Jordan, in return for Jordan’s government providing employment quotas and work permits for Syrian refugees in these businesses. The Ethiopia compact is the latest programme. It has a strong focus on job creation for refugees and Ethiopians, with industrial parks (also known as ‘special economic zones’ or SEZs) playing an important role. Our experts draw on lessons from Jordan and elsewhere to outline five ways that donors and Ethiopia’s government can ensure it succeeds. |
