Refugee Relief: Business on Board

Once hesitant, the private sector is now increasingly willing to help aid agencies respond to the Syrian refugee crisis.

By Jane Hosking

A new role is gradually emerging for the private sector in efforts to deal with the Syrian refugee crisis in Jordan. A report published over the summer by the Overseas Development Institute (ODI), a British international development think tank, has outlined the immense potential for humanitarian-private sector partnerships in coping with the challenge. Such partnerships, the report said, can be mutually beneficial for both sides and are also providing refugees with more effective assistance.

As of September this year the UNHCR registered over 618,000 Syrian refugees in Jordan who have fled since the outbreak of violence in their home country in 2011. While approximately 20 percent of these refugees live in camps—the largest being Zaatari with almost 80,000 people—the rest reside in urban centers. The total number of arrivals has boosted Jordan’s population by up to 10 percent, a figure that is probably much higher if non-registered arrivals are factored in.

The ODI report, which includes research from Jordan, Kenya, Indonesia, and Haiti, revealed a global shift in how the humanitarian sector responds to refugee crises by involving the private sector in cash transfers, telecommunications, logistics, and other service provisions.

But despite the revelation of the wide-ranging benefits and the growing role of the private sector, Steven Zyck, ODI researcher in the Humanitarian Policy Group and co-author of the report, admitted that he was surprised to find a lot lower involvement in Jordan than expected. “It’s surprisingly limited given the vibrancy of the private sector within Jordan. In many middle-income countries we increasingly come to expect quite a heavy degree of private sector involvement,” he said, adding that this has been the case in other humanitarian disasters such as the 2004 tsunami in South East Asia. “We expected to see a lot more in Jordan because it has dealt with so many successive refugee crises that we thought that businesses at this point would have been switched on to the potential benefits there were of engaging directly with refugee populations as customers and through aid agencies,” he said.

Why So Wary?

Zyck explained that this lack of involvement was likely due to a number of factors. For instance, when the crisis first emerged, humanitarian workers were left scrambling to respond to the sudden influx of Syrians crossing the border. “The scale of the crisis and the fact that it grew so incredibly quickly meant that there just wasn’t anyone in the United Nations system with the mandate or the free time to recognize this need and reach out to entrepreneurs and businesses,” he said.

Zyck also explained that many humanitarian workers were not accustomed to dealing with middle income countries with well-functioning private sectors that could provide collaborations with local businesses. The partnerships that arose were therefore on an ad hoc basis rather than through systematically cultivated processes within aid agencies, the way procurement or fundraising are.

But perhaps the main factor that restricted involvement, according to Zyck, has been the political sensitivity of the crisis. “Some business figures felt hesitant to get involved . . . until they felt there was a very strong signal from the upper most echelons of the government,” he said, adding that even when companies did get involved there were signs of discomfort in publicly acknowledging their role due to the sensitivity surrounding the refugee population. Zych noted that there was a sense, from larger Jordanian companies in particular, that they could fall out of favor with key government leaders if they were seen to be supporting the refugee population. There was also concern that involvement may cost them among their Jordanian clients. This wariness of getting entwined with the politics of the crisis, Zyck argues, has played a role in blunting the private sector’s potential in Jordan’s humanitarian sphere. But he’s optimistic about growth. “There’s a lot of untapped potential out there for businesses to get involved in supporting the Syrian refugee crisis, both on commercial or charitable terms,” he said.

Kilian Kleinschmidt, the UNHCR’s senior field coordinator (head of Mafraq SUP- Office) for Zaatari, is a big believer in private sector involvement in running the camp. He also believes that the shift in the government’s attitude towards the settlement in Zaatari has changed recently with the realization that a longer-term solution is required. “The government has been very anti-permanent structures, but they have changed the narrative,” he said. They have acknowledged that the crisis will continue for at least four to five years and must therefore be planned accordingly, he added.

This, he said, has paved the way for a process of privatization of many of the camp’s services, including its electricity, water, sewerage, communications, and even Internet. While this process is still in its early stages, Kleinschmidt expects it will soon transform the camp, making it more sustainable and less reliant on the UNHCR and other aid agencies that may struggle to provide long-term assistance if funding dries up.

One of the projects currently being planned is to formally provide the 14,000 households of the camp with an electricity service. So far, an illegal electricity service has been established by some enterprising Syrian refugees who have set up a web of wires throughout the camp. This has been taking $750,000 worth of electricity a month from the UNHCR by tapping into the street lights in the camp. Instead of deciding to crack down on this illegal enterprise and leave the refugees in the dark, the UNHCR plans to arrange a regulated service through private sector assistance. This will include installing meters, which Kleinschmidt says will be managed by a private company. The refugees will be allocated a certain amount of electricity each month for free, and more will be available for a fee, he explained. “Many of them can pay because there’s an economy of about JD10 million in this camp per month,” he said, citing over 3,000 illegal shops and businesses that operate in Zaatari. “We’re working on regularizing the businesses . . . and gradually we will be moving this messy self-organized chaotic thing into something which is structured,” said Kleinschmidt.

In addition to managing the electricity supply, there are plans to build a solar power plant capable of producing up to 15 MW for the camp. The $30-million-project will be financed through a combination of development and private sector funds, and a tender will be released to find an appropriate private partner. Kleinschmidt believes this power plant, as well as other planned infrastructure projects, will have long-term benefits for everyone living in Jordan. “Even if the camp disappears in six months, you will still have your photovoltaic power plant,” he said.

Many other private arrangements already exist in or around Zaatari, in addition to the Syrian-run unofficial enterprises. These include Jordanian-run supermarkets and a local manufacturer that works with aid agencies to supply prefabricated caravans to the refugees. Kleinschmidt also said opportunities were growing for Jordanian companies to get involved, including tech savvy startups and small web design firms. He believes that they can help in developing useful solutions for the camp, such as mapping tools, information management, coordination, and e-learning. “There is a need for the UN and the broader humanitarian community in a country like Jordan to engage more with these sort of young entrepreneurs,” he said, adding that this involvement can also help these companies build their portfolios.

Kleinschmidt admits that the private sector has been hesitant to join in the humanitarian efforts in Zaatari. But he’s adamant that this is changing. “Companies were reluctant to get involved because of the bad image of Zaatari. They said it was too unsafe, but now the place is really peaceful and we have the international companies coming and they’re actually seeing the potential,” he said, explaining that it’s increasingly being recognized as a profitable market.


Beyond CSR

According to the ODI report, traditionally private sector involvement in humanitarian crises has taken the form of charitable donations as part of Corporate Social Responsibility (CSR) initiatives. “Most people think philanthropy or forms of CSR are the best ways to help, but our research has shown that this is not the case,” said Zyck. Instead, he says that when companies approach disasters and humanitarian crises as commercial opportunities, they are doing more to help than companies who try to be charitable by giving money. But this isn’t to say that CSR assistance isn’t valuable. In fact a new approach to CSR, which goes beyond cash donations and involves deeper collaboration between aid agencies and the private sector, is significantly enhancing the assistance provided to Syrian refugees in Jordan.

An example of this is the partnership between Jordan Ahli Bank and the World Food Program (WFP). The initiative involves replacing a food voucher system with prepaid debit cards provided by Ahli Bank that are loaded each month by the WFP and can be spent at designated shops. The service is currently being rolled out across the country for refugees living in host communities and will soon be extended to the camps as well. Rania Wahbeh, head of the CSR department at Ahli Bank, said the initiative is part of the bank’s CSR strategy and that they believe they have a role to play in helping the community. “We have to help. Our government can’t take it on alone,” she said.

Jonathan Campbell, emergency coordinator for the WFP, said the new system significantly improves the efficiency of the service. “We don’t have to do all the printing and the logistics of the distribution which is a huge advantage,” he said, adding that refugees no longer have to travel long distances to pick up their vouchers. Without the partnership, which draws on Ahli’s technical expertise and resources, Campbell said the WFP couldn’t provide such an effective service. “What is great is that we have access to a level of technology that we couldn’t fund ourselves,” he said.

The initiative has many benefits for Jordan’s economy as well. A WFP impact study found that by the end of June 2014, they had injected $212 million into Jordan’s retail economy since starting the food program in August 2012. This has led to $2.5 million worth of investments in the infrastructure of participating retailers and has created 350 jobs just at the supermarket level alone.

The way aid agencies and private companies are coming together in response to the Syrian crisis appears to be contributing to a worldwide transformation in humanitarian assistance. “I think when you look back at humanitarian history, the Syrian crisis will be where the humanitarian community really cracked this and managed to make it work,” said Campbell. But he believes that as humanitarian-private collaboration is a moderately new phenomenon, there’s a learning curve on both sides. And while many from both sectors have now realized the mutual benefits of working together to develop more effective assistance for refugees, there’s still a lot of room for growth and a need to cultivate potential partnerships.


*Photo credit JaredKohler/UNHCR