Global Refugees’ Brimming Business Case

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A new Center for Global Development study commissioned by the Tent Foundation, started by the chief executive of yogurt maker Chobani to organize US company efforts to tackle the refugee crisis in the Middle East and elsewhere, found that global business concentrated on the three areas of hiring and supply chains, impact investing and goods and services provision alongside broader policy shaping efforts. Social and reputation benefit, brand loyalty, and bottom-line profitability are the main motives, although agreed standards are lacking for accountability and results. The world’s close to 25 million refugees are displaced 10 years on average and over half are in cities, and “sustainable engagement” beyond periodic product and expertise donations increasingly applies, as with furniture manufacturer IKEA’s transition from energy and housing help to artisan employment in Jordan. The report notes that work, travel, education and childcare restrictions continue to block progress, despite evidence that migrant inflows can spur occupational and wage improvements for host populations. In offering positions Starbucks is a leader with a commitment to 10,000 retail slots, although in many countries work permits are unavailable and transport costs prohibitive. In Jordan only a quarter of the 200,000 promised labor authorizations under a concessional World Bank loan and EU trade preference deal have come through. Specialized initiatives like WEConnect and Building Markets aim to link women, entrepreneurs and small business to multinational company supply networks, and a quick review of 20 low and middle-income economies with the most refugees cites consumer products, agriculture, retail and information technology as promising sectors. Development agencies facilitate and sponsor new arrangements, such as with US grocer Safeway in Jordan and the UN’s craft enterprises in West Africa. Hydrocarbons could also be an entry point, and reconstruction in Iraq and Syria could take off eventually as dedicated matchmaking hubs promote partnerships, as the guide recommends.

Impact assets that seek environment and social alongside financial returns are estimated at $115 billion, and diaspora communities, such as Somalis in Kenya, also mobilize capital for frontline state high-risk allocation. They can take stakes in startup operations like the 10000 Syrian-owned ones in Turkey which average ten employees and contribute $330 million to the economy, according to a recent census. However global investment houses tend to shy away with the small scale and difficult to measure metrics, although project specific humanitarian or development bonds, with a donor or government paying upon achieved outcomes, may be a refugee channel. They are under preparation in the Middle East, and group loans to Syrian borrowers are offered through on-line site Kiva. As “base of the pyramid” consumers, the financial and telecoms sectors are ripe for innovation, and Mastercard has created digital vouchers and prepaid debit cards in cooperation with relief agencies, and European phone company Orange has built international dialing and banking infrastructure in Uganda. The paper concludes that these early models for refugee business may be inspiring but still lack a “rigorous evidence base.” It advises establishment of ethical standards, evaluation tools, country dialogues and research centers to solidify commercial awareness and lay the foundation for routine participation that lasts apart from the Tent label.