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Policy Solutions within the Refugee Economies

By Meenuka Mathew

Improving the knowledge of refugee economies leads to creating market-based solutions to the crisis situation they live. Such solutions will improve the local communities and refugee lives as well. Addressing the refugee economies’ concerns and allowing them to function in the normal economies is vital as it reduces the crisis. Such developments lead to sustainable living conditions and enhancement of social, economic and cultural aspects of Refugees as well as the host Nations.

We witness the Highest Record of Displacement in the world with 68.5 million people are forcibly displaced around the world. United Nations High Commission for Refugees (UNHCR) estimates that One person is forced to flee their homes every two seconds somewhere in the world due to conflict or persecution. South Asia hosts more than 3 million refugees. Since more attention and emphasis given to the Western hosts popularly, there is not much spoken about South Asia as a host. These countries are hosting refugees from across and within the sub-region (mainly India, Bangladesh and Sri Lanka) even in the absence of any refugee policy as none of the countries are signatories to the Refugee Convention 1957 and its protocol 1961. Therefore, these states approach refugee issues with ambiguous mechanisms.

The High Commissioner for refugees, Filippo Grandi of UNHCR argues that “refugees deserve action and investment, not indifference and cruelty, sheltering and supporting people fleeing bombs, bullets, torture and rape is not an act of charity, it is a legal and moral obligation prescribed both by international law and by our common humanity”.

There are number of problems that emerge due to increase of refugees in any given country or region such as access to resource (food, shelter clothing healthcare and education), identity crisis, social discrimination and being victims of black economies. However, the fundamental problem strains down to the struggle of basic survival of the refugee community. As human beings, the basic survival in a foreign land is vital, especially for people who are being traumatized, tortured and have been faced by all sorts of struggles. Though there are governmental and non-governmental organizations looking into refugee crisis and solutions, there is lack of studies that examines the economic lives of refugees in South Asian countries. The limited research mainly focused on refugee livelihoods or economic impact on the host state.

The concept of ‘refugee economies’ is used to represent the entire resource allocation system relating to a refugee community. It looks at refugees’ economic lives holistically and from the standpoint of the people themselves. (Alexander Betts, 2014) Examining the refugee economies and how they are connected to the economy of the host countries allows the policy makers to find sustainable solutions that can reduce the burden of hosting refugees. Refugee communities engage in economic activities that are common in any given economy. Refugee economies engage in production, consumption, exchange, entrepreneurship and the development of financial and capital markets. Existing work related to Refugee economic activities tends to focus narrowly on refugee livelihoods or on the impact on host states. Yet, understanding these economy systems may hold the key to rethink our entire approach to refugee assistance. If we can improve our knowledge of the resource allocation systems that share refugees’ lives and opportunities, then we may be able to understand the mechanisms through which those market-based systems can be made to work better to turn humanitarian challenges into sustainable opportunities. (Alexander Betts, 2014)

What are the major challenges to access sustainable livelihoods?

Black Economy: In the absence of means to enter legal economy systems, refugees function in Parallel Economy or Black Economy where they are being exploited by the local business community that functions in the black economy. Hence, there are conditions that a refugee who literally has no sufficient means of income ends up paying for basic consumption at a higher cost. They pay high housing rents, water, electricity and bribes for getting work opportunities. In order to either get a job or preserve a job, refugees/asylum seekers have to pay fees for the gate keepers who allow the access to work. Lack of identification documents restricts access to banking and financial systems. The growth of refugee economies benefits the black economy to flourish. This reality adversely affects the normal economy of the host country.

Absence of a legal identity: Refugees who are recognized by the UNHCR receive an ID card, stating that the particular person is a refugee and entitled for kind assistance. However, this ID doesn’t entitle them for regular assistance or a work permit. A large number of asylum seekers who are yet to be recognize as refugees are excluded from receiving such ID. Often, they are considered as illegal migrant. One of the recent high light of absence of legal documents for the refugees is the impact that demonetization in India. Refugee/asylum seekers did not have any legal document to prove that the money they hold in hand are theirs and with the shortage of cash in the economy, refugee community suffer in getting basic needs such as food, medicine and transport. Refugees cannot open bank accounts without the Aadhaar card in India. Thus, not able to exercise any formal economic transactions.

Gap of skills and education: There are two aspects of education for refugees. First, the refugees have limited (or mostly absent) opportunities to continue working in similar professions they were engage in their home countries. Thus, their performance levels can be low and the gap of not being able to professionally engage has made them lag behind in terms of advancing themselves professionally. The second aspect is that refugees have been living in these urban cities for several years with no access to quality education. Majority of the public schools provide primary education in local language mediums which refugee children and youth are not able to engage. Therefore, refugee youth are not educated enough and even if they have gone through self-study with the use of information technology and internet; they do not have proper credentials to prove them. As a result, refugees fail to find sufficient income generating means and have kept them stagnant in the social mobility. These conditions result in psychological stress that cost this community more and to lose hope of their future.

Integration to host Societies: In the absence of polices to facilitate coexistence of refugees, creates social tensions such as racism, ethnic and religious tension. The cultural challenges and language limitations of refugees create differences and limit opportunities for integration to local community. These differences result in non-acceptance of refugees in these societies. There have been instances where Afghani refugee youth who have been living in Delhi for the last 6 years has no friend who speaks Hindi. One of my interviewees mentioned that she has not been able to make any friend in her distance education course at IGNOU (Indira Gandhi National Open University). To be connected to the community is an utmost concern for these refugees. The continues alienation and the disconnection makes them insecure and leads to tensions.

In accessing certain public services such as healthcare, education and often basic utilities, refugees/asylum seekers face discrimination and nonacceptance due to their inability to produce any identification. In the post demonetization Indian Economy, the necessity for an identification is been experienced by the refugees in their day to day survival. Refugees and asylum seekers experience financial exclusion and not been able to exercise certain procedures such as online transactions, holding of bank accounts, insurance, purchasing under EMI (Equated Monthly Installments) schemes or any other related benefits. From a refugee point of view, purchasing a metro card in India to paying school fees, the demand to use digitized systems is where they disconnect with the formal means of exercising their economic activities in a day to day basis.

Therefore, challenges in integration to the society and the financial exclusion of the refugees result in limiting access to sustainable livelihoods that are available within the communities itself.

It’s necessary for refugees and asylum seekers to access livelihoods that give them financial security for their basic survival. Hence, they accept any possible work opportunity despite the low payments, job insecurity or possible exploitation of working conditions. They work in the informal, non-regulative sector which confines them to a number of ill conditions. The refugees and asylum seekers faces challenges in terms of the nature of the work such as high labour intensive, low payments, irregular working hours, unsafe working environments and insecure circumstances of work specially for women who are sexually harassed in such work places. In the same time, there are refugees and asylum seekers who are street vendors often faces discrimination, harassment and cheated by the authorities and other vendors who regulate them in supplying goods for vending. In fact, all these economic activities and job seeking happen in the shadow of the black economy. The masterminds of the black economy are aware of the refugees and asylum seekers vulnerability and thus, take the advantage of the situation.

In conclusion, lack of identification documents has led the refugees and asylum seekers to depend on the black economy in full filling their economic necessities despite the exploitation it causes. Nevertheless, the challenge in accessing sustainable livelihoods remains unanswered. Providing acceptable identification documents removes the barriers and grants financial inclusion for refugees. Therefore, access to quality and legal means of goods and services as well as opportunities for them to contribute to the formal economy through labour, capital and entrepreneur activities brings the community out of black economy.

Improving the knowledge of refugee economies leads to creating market-based solutions to the crisis situation they live. Such solutions will improve the local communities and refugee lives as well. Addressing the refugee economies’ concerns and allowing them to function in the normal economies is vital as it reduces the crisis. Such developments lead to sustainable living conditions and enhancement of social, economic and cultural aspects of Refugees as well as the host Nations.


References :

Alexander Betts, L. B. (2014). Refugee Economies; Rethinking Popular Assumptions. Published by the Humanitarian Innovation Project, University of Oxford .

Dass, S. (2014). I Often Think of What I left Behind; Chin Refugee of Delhi.

International Covenant on Economic, Social and Cultural Rights. United Nations .

Jessica Field, A. D. (2017). Urban Refugees in Delhi.

Paula Jops, C. L. (2016). Context of Risk: Uncovering the Lived Experiences of Chin Refugee Women Negotiating a Livelihood in Delhi. Refug Volume 32.

PK Balachandran, S. L. (2017, September 23).

Retrieved May 3, 2018,

Sharma, M. (2009). Refugees in Delhi – Working Paper No.229. Delhi (2013). A review of the Implementation of UNHCR’s Urban Refugee Policy in Delhi. Policy Development and Evaluation Services UNHCR.

Vijayakumar, V. (2001). A Critical Analysis of Refugee Protection in South Asian. Refuge, Vol. 19, No2 January 2001.

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