Refugee businesses tend to operate in the informal market and cannot benefit from local government funding, nor afford to tap into online start-up culture.
The risk from coronavirus transcends social classes and cuts across communities. One category made vulnerable in this crisis is refugees, particularly those living in already inadequate, overcrowded communities with limited health and sanitation facilities.
Adding insult to injury, they now have to deal with enhanced immobility. An outbreak of the virus in such an environment as theirs can lead to catastrophe.
The majority of refugee-hosting countries, not least in the Middle East and Africa, already have fragile economies. A policy brief released by ESCWA featuring an economic assessment of the cost of the pandemic on the MENA region warned of job losses at an alarming rate due to COVID-19.
Fadia, a 56-year-old single mother of six living in a border village in Lebanon, is just one of those hit hard by recent restrictions. With a small plastic-bag recycling and crochet-stitching business, she woke up on 19 March to learn about new rules issued by the local authority to close all shops.
Her business was one of many deemed “non-essential” and forced to close in the village. With savings that lasted only for a few days, Fadia’s family faces an unknown future.
Fadia is not alone, thousands of other refugee entrepreneurs face similar situations.
The long-term impact of COVID-19 is expected to exacerbate the vulnerability of some of the 25.9 million refugees worldwide. The livelihoods of millions are in danger since many rely on their daily incomes.
The majority are working in informal markets. Losing their job means dwindling livelihood opportunities, ultimately leading to more negative coping mechanisms, such as relying on children to provide income, or cutting back on basic needs such as food and baby milk.
Entrepreneurship is the way forward
Joblessness is significantly impacting refugee and Syrian communities who have little or no buffers to protect them during this time. As 2020 risks becoming a shutdown year for traditional businesses, entrepreneurship is now needed more than ever.
While local start-ups have relied on funding by local governments targeting impacted industries and markets, the vast majority of refugees’ businesses are working in the informal arena, leaving them without any assistance.
While more and more businesses are moving online to market products and services, refugee entrepreneurs risk being out of the game as they face dwindling resources and limited capacities.
According to the UNHCR, the UN Refugee Agency, refugees are 50% less likely than the general population to have an internet-connected mobile phone. While 20% of rural refugees have no access to connectivity, urban refugees often have access but cannot afford to get online.
Many refugees left school due to conflict and missed out on important learning that would have helped them navigate this world – online skills among them.
Not being able to receive a wire transfer is another issue that can often single-handedly cause a work opportunity to go wasted. Receiving payments poses challenges for refugees in many of the host countries, especially those who do not have a residency. Also, access to electricity and computers as basic requirements are not available to many refugees.
Many studies indicate that entrepreneurship has an essential role in combating unemployment. When it finally shows signs of abating, the COVID-19 crisis’ impact on the refugee community will have caused irrevocable destruction.
The human cost is always the most tragic, and the magnitude of the financial consequences might reach levels that defy all proportions. It thrusts the question of post-crisis economic support to the forefront of all concerns.
Light at the end of the tunnel
Entrepreneurship, if efficiently deployed, can spur on growth and long-term renovation. It has the potential to boost economic recovery while improving access to essential services. It can spark unprecedented competition, triggering a wave of innovation, tech-based jobs, and eco-friendly trends.
Refugee entrepreneurs should be actively encouraged to provide services that not only generate income and make job opportunities available but also directly serve their communities and benefit those in need. They should be encouraged to contribute to building local expertise and paving the way for future development.
The post-COVID-19 era will highlight entrepreneurship’s role as a catalyst for development. Policymakers should start to consider assisting refugee entrepreneurs in their endeavors to create businesses that can benefit both the refugee community and beyond.
This would be nothing new: back in 1760 during the Industrial Revolution, the spirit of innovation led a remarkable manufacturing transition in Europe. We have already learnt how societies need to embrace, encourage, and trust entrepreneurship, so let’s apply it.
This article was originally published in the World Economic Forum.