Jordan becomes a test ground for large jobs program for Syrian refugees

MUWAQER INDUSTRIAL ESTATE, Jordan - A new trade deal with Europe, a rush of foreign investment and public works are to put 200,000 Syrian refugees to work in Jordan in what the international community has described as a radical new approach to tackling the biggest displacement crisis in decades.

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Still, senior officials acknowledged that it may take several years to reach that target.

Such a slow pace could keep many Syrians in limbo and possibly undercut one of the main aims of the global intervention - to quickly reduce refugee migration from struggling regional host nations to Europe.

Shifting from handouts to helping refugees sustain themselves is now seen as the most effective way to deal with the fallout from a prolonged conflict that has defied a negotiated solution. The Syria war enters its sixth year later this month.

Up to now, humanitarian aid for Syrians has consistently fallen short because of the staggering needs of millions of displaced, forcing cuts in food and cash support, which helped trigger last year's exodus of hundreds of thousands to Europe.

The new deal, described by Jordanian Planning Minister Imad Fakhoury as "transformative," was struck at last month's annual Syria aid conference in London.

Jordan is the main testing ground for job creation.

Under the new pact, Jordan promises to allow up to 200,000 Syrian refugees to work legally, an idea it rejected in the past because of high domestic unemployment.

In exchange, Jordanian products would win easier access to European markets, meant to create new investment and jobs. Jordan would also receive hundreds of millions of dollars in grants and cheap loans for development projects.

If successful, the scheme would probably mean replacing some of Jordan's hundreds of thousands of foreign workers, mostly from Egypt or Asia, with Syrians.

Easing access to European markets would also throw a lifeline to Jordanian factories whose exports have plummeted following the conflict-driven closures of Jordan's trade crossings to Syria and Iraq last year.

Jordanian business owners are eager to employ Syrians, seen as hard-working, but remain skeptical, said Jalal al-Debei, head of the Jordan Industrial Estates Company which administers five industrial zones with hundreds of factories.

"They heard a lot of promises from the government, from the world, but nothing happened," al-Debei said of the entrepreneurs.

A key element is a promise by the European Union to ease its "rules of origin."

Under relaxed rules, Jordanian factories could, for example, bring in raw materials from other countries, such as fabrics from Asia, and still label the finished products as Jordan-made, and qualify for duty free trade.

Jordan's free trade agreement with the United States has boosted exports over the years, amounting to $1.4 billion in 2014, or five times more than to Europe.

The EU is to finalize the new rules before its summer break in August, said Andrea Matteo Fontana, the EU ambassador to Jordan.

Greater access to Europe is intended to encourage investment in five industrial zones in Jordan, but investor response is hard to predict. "At the end of the day, this is a business decision from the private sector," Fontana said.

The plan calls for 150,000 jobs for Syrians to be created in the industrial zones and 50,000 in labour-intensive projects, such as building schools and water cisterns, he said.

Creating all 200,000 jobs could take years according to the World Bank's chief economist for the Middle East and North Africa, Shanta Devarajan.

However, some firms could likely ramp up quickly to employ large numbers of workers, based on experiences in other special enterprise zones, Devarajan wrote in response to emailed questions.

Patrick Daru, co-ordinator of the International Labor Organization in Jordan, said he believes the job target could be reached in two and a half years.

The ILO has prepared $10 million worth of public works projects that could be launched once money is available, he said.

At the Muwaqer Industrial Estate in northern Jordan, home to 21 working factories and another 36 in the pipeline, a possible new trade deal with Europe was rare good news; businesses have been hit hard by the border closures.

International Technical for Metal Industries Co., which makes steel tubes and pipes, saw sales drop 40 per cent after Iraq closed its trade crossing with Jordan. Iraq made the decision, in part, to deprive Islamic State of profits from "customs" the group imposed on trucks passing through border areas it controls.

The slowdown forced the factory to reduce its work force from 160 to 100, manager Dirar Ahmad said during a walk across the factory floor, where hissing machines were spewing steam cut raw steel sheets imported from Saudi Arabia.

All of those fired were foreign workers, most from India, he said, adding that he now employs 85 Jordanians and 15 foreigners.

If production were to pick up again, Ahmad said he would prefer to hire Syrians because they speak the same language and follow the same traditions as Jordanians.

Ashraf Bani-Yassin, a factory foreman, said he would welcome Syrian colleagues, provided they don't take jobs from Jordanians.

Jordan hosts about 635,000 out of more than 4.7 million Syrians registered with the U.N. refugee agency. The total number of Syrians in Jordan is more than 1.2 million, including those who arrived before the conflict.

Jordan's Labor Ministry said about 90,000 Syrians currently work in Jordan, but fewer than 5,000 have permits, which are difficult to obtain.

Most Syrians hold low-paying jobs in construction and agriculture, competing with foreign labour in sectors Jordanians traditionally shun.

The ministry now plans to issue 4,000 more work permits to Syrians in a pilot project, including for jobs on farms and in textiles, said spokesman Mohammed Khateeb.

Granting such permits remains politically touchy, and government officials emphasize that Syrians wouldn't crowd out Jordanians.

Daru, the ILO official, welcomed Jordan's willingness to allow Syrians into the formal labour market.

"Here you have a country that has decided that if we have a bigger pie, they are actually ready to share this pie with the refugees," he said. "This is really a major shift in the thinking on how to accommodate the refugee population."



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