The Labour of the Refugee Economies

Ranabir Samaddar

Most writings on refugee economy or the immigrant economy refer to changes in the immigrant labour absorption policies of the Western governments. These writings reflect on the economic activities of the refugees and other victims of forced migration. Refugees are seen as economic actors in the market. But we do not get a full picture of why capitalism in late twentieth or early twenty first century needs these refugee or immigrant economic actors. The idea we get is that refugees and other victims of forced migration want to be economically viable, relevant to the host economies, and are economically relevant, but they are discriminated against. These writings showcase refugees’ attempts to survive meaningfully in camps, cities, and other settlements, in ethnically homogenous or mixed settings, and the ways they prove useful to market, big business, and organised trade. Several studies along this line tell us of the success stories of migrants’ economic activities. The message is: the refugee or the migrant as an economic actor has arrived, do not neglect the refugee, do not dismiss the refugee as an economic actor. Yet the organic link between the immigrant as an economic actor and the global capitalist economy seems to escape the analysis in these writings.

Yet as Michel Agier in his detailed study (Managing the Undesirables: Refugee camps and Humanitarian Government, 2011) of several camps shows, on the ground, however, the structure of care and protection put in place ensures that this remains a situation of permanent catastrophe and endless emergency, where undesirables are kept apart and out of sight, while the care dispensed is designed to control, filter and confine. How can we explain this duality of care and control coupled with exclusion? Camps are transforming, likewise immigrant settlements are changing. Camps are like holding territories of mobile labour, since they hold at one place an enormous amount of reserve labour. Camps are becoming towns, and other types of big, informal-formal settlements. Without a study of the immigrant as the labouring subject is it possible to make sense of such transformation?

Even on occasions where the refugees or immigrants are considered as economic actors it is a matter of labour market segmentation and differentiation. For instance, Stephen Castles and Mark Miller’s The Age of Migration (2003) has an entire chapter on migrants in the labour force. They take note of the dominant presence of the migrants in the informal economy, “growing fragmentation of immigrant employment and the range and significance of immigrant labour market diversity” (p. 183), and “labour market segmentation leading to long term marginalisation of certain immigrant groups and immigrant women workers, and global cities and ethnic entrepreneurs. Castles and Miller are able to ask some significant questions also, such as: impact of economic restructuring on migrant workers, patterns of labour market segmentation by ethnic origin and gender, scope of underground economy, strategies by migrants such as self-employment, small business, mutual aid, ethnic niches, etc., to deal with labour market disadvantages. In all these, market is the conceptual anchor, be it labour market or trade, or marketing of skills.

As a consequence, the question frequently asked is about the impact of the refugees on the host economy, and not, about why economies cannot do without the so-called refugee economies that supply informal labour for the host economy. The further result is that the economic interface of refugees and economies is little understood – also, because sufficient data is not available and the question of refugee impacts does not lend itself to conventional impact evaluation methods. Some suggest comparison of impacts of cash versus in-kind refugee aid. But there is nothing special in this. Studies of poverty alleviation programmes in developing countries show specific relevance of both strategies – depending on specific time, locality, and situation. Most studies do suggest however that despite undergoing forced migration and often living in destitute conditions, refugees have productive capacities and assets, and they actively interact with host-country economies. Some evidence suggests that a large influx of immigrants increases unemployment among the less-skilled workforce and also decreases wages among certain populations. But again that is the general way in which an economy expands. The impact of economic expansion has been always differential. One study found that whereas increased demand may increase prices if supply does not respond, increased demand due to an additional refugee influx exerts limited upward pressure on prices around the camps where cash has been extended to the camp inmates. Economic spill over may also result as refugee households and businesses inside the camps purchase goods and services from host-country businesses outside the camps, because the agricultural, livestock, other production activities, and all retail businesses outside the camps are mostly owned by host-country households. The increase in refugee demand raises host-country incomes and spending which, in turn, generates additional rounds of spending impacts in the local economy. This is of course a familiar story where total expenditures, including savings, equalling total income for all households and activities, ensure that changes in expenditures match changes in incomes for all agents in the local economy. But the snag in the story is that the local poor households may also receive such assistance – cash or in kind or business advance – and thus generalise the problematic.

Governments have realized that labour market integration calls for investment and viewing the arrival of refugees and other forced migrants as opportunities, triggering further growth. First of all asylum applications are rather low compared to the doomsday prophets. Labour market integration helps fiscal sustainability for the host country, given the specific skill base of the migrants say from Syria. Companies therefore call for more efficient refugee policy, so that admitting refugees and other forced migrants becomes a matter of both short-term and long-term investment rather than sunk cost.

Migrant economies pose the issue of labour market integration, they carry the signatures of informal economy, and subsume refugee economies and other labour market actors like climate migrants, illegal immigrants, economic migrants, etc. and are in turn subsumed in the dynamics of informal economy. The dynamics of Informal economy relating to types of economic activities (for instance in care and entertainment industry in countries of Europe) subsumes all distinctions between refugees and other victims of forced migration, illegal immigrants, environmental migrants, the internally displaced, the trafficked labour, and so on. We have to keep in mind while talking of labour market segmentation the countervailing reality of the utmost flexibility of capitalism to create informal arrangements in production and circulation everywhere. Michael J. Piore’s classic study, Birds of Passage (1979) argued that the conventional push and pull theory is simply wrong, and industrial development in one place always creates informal, low paid economy, and calls for the import of informal, low wage labour for jobs that otherwise would not be performed. Indeed, informality and segmentation go hand in hand; between stereotyped and regularised skills and jobs, there is a range of work arrangements creating transitory forms of labour, which navigate several institutional spaces of the market. The refugee economy is a footloose economy, whose relevance to global capitalism today lies in the salience of the informal mode of production and circulation. The global now houses the informal within the formal. Thus a formal sportswear brand company in its production complex may engage informal makers of shoes, football, cricket bats, caps, etc., who are located across vast distances, or a fashion company may contract tanneries in distant countries of the South for polished leather goods including leather bags. This is possible because standards are global, and the refugee economy in order to survive has to follow the global standards and protocols. The refugee or the immigrant economy in this way becomes a part of the global supply chain of a commodity. Classic is the case of carpet making by Tibetan refugees in Nepal or Syrian refugees making leather and other garment products in Turkey or Bangladeshi immigrants in India engaged in garment making as in Kidderpore in Kolkata. Opportunities and constraints thus have a pattern.

Syrian refugees also present an insightful corpus of experiences of how and when refugees become labouring subjects. All these of course link the management of informal economies on a global scale with the dynamics of global governance. Alexander Betts and his colleagues are only partly right when they say of their work (Refugee Economies, 2014, p. 54), “The theoretical purpose of these three institutions of refugeehood (urban, protected camp, and emergency camp) is to highlight the ways in which refugees’ different institutional contexts shape their economic opportunity structures. Rather than being inherently different from ‘citizens’ or ‘migrants’ what makes them distinct is a set of institutional features that shape their economic lives and interaction with markets.” On the contrary, one may argue that global experiences of refugee and migrant economies suggest a broad uniformity of pattern in the formation of the labouring subjects from refugee and immigrant populations, namely that they form a huge dispersed population of footloose labour whose products are linked to global market chains. These population groups must be made to work as per the requirements of the global supply chains of commodities and labour; on the other hand they must remain invisible from the public eye.

It is now being argued that to resolve the enigma of “refugee economy”, analysts will have to ensure that, wherever possible, all relevant stakeholder groups, four in particular – refugees, host population and country, area and country of origin, and providers of assistance (which will include presumably business houses providing marketing opportunities and capital advance to the displaced) – have to be incorporated into the analysis. Then quantitative parameters will have to be evolved to measure impacts (for example, income, assets, employment and access to natural resources), together with mediating factors such as age, gender and length of exile; also qualitative factors such as perceptions of security and protection will have to be identified. With these two methods, the goal has to be to construct an overall socio-economic profile and analyse how the profile is affected for each of the stakeholders by forced displacement. The host country’s public sector fiscal costs and impacts in providing social and welfare assistance for refugees have to be measured, such as, increased medical and education provision, increased demand for utilities such as water, and longer term capital costs and impacts such as infrastructure investment. And finally, while the methodology’s focus will be on livelihoods and micro-economic impacts and costs, assessing the impacts at the macro-economic level will remain an equally important dimension of the analysis.
All these at the end of the day are labour market analyses. They do not throw much light on the larger forces that lead to absorption or otherwise of refugee and immigrant labour in global economy.

The salience of Syrian and Iraqi refugees and asylum seekers in Europe is that they come from countries occupying the grey zone between the North and the South. With over 80 per cent literacy, wide skill base for entrepreneurship, high rate of women’s participation in non-family forms of labour, these countries have produced refugees who have deployed knowledge in not only reaching countries where they seek asylum, they also learn quickly new skills, adapt themselves relatively quickly – in a year or two – to new requirements of language, labour protocols, self-run business rules, and learn to straddle the two different but interacting worlds of formal economy and the informal economy. The eventual absorption of current immigrant flows of skilled, semi-skilled, and unskilled labour in labour markets of Europe and countries of other regions (Brazil, South Africa, Hongkong, the Gulf countries, etc.), albeit in differential manner, will not be much different from what had happened in Europe, United States, Canada, and Australia in the pre-Second World War years. In this dense labour market scenario pleas for labour market equality receive consideration from well-meaning economists and refugee studies specialists, but formal (political, legal) equality makes sense only if they are relevant for entry in labour markets. Otherwise as labouring subject, the migrant’s lack of political equality is the other side of her economic ability to enter the labour market. It is strange then that migration analysts rarely consider the two aspects together, namely lack of entry in the formal political arena accompanied by entry in the informal and sometimes formal labour market. Immigrant labour’s autonomy, more known as “autonomy of migration” allows the migrant to cope with this dichotomous world. For long, it was a case of political opportunity, but economic closure; now it is the case of economic opening (entry in the informal labour market), but political closure; yet the migrant as the footloose labouring subject copes with this upside down world of politics/economics with his/her autonomy to move. In a way this return of economy to the centre stage of discussions on refugees and migrants is strange, but perhaps should not be so, if we recall that at the heart of the “durable solutions” debate in refugee studies circles, the issue of economic rehabilitation was always paramount. The formation of the UNHCR itself nudged by the UN Economic and Social Council was an effort towards finding out a durable solution to refugee crisis. Economy buttressed by demography has been always the other scene of refugee and migration management in the modern capitalist age.

Policy responses concerning labour market form the other side of what has been called the autonomy of migration – a term that means among others the willingness and the capability of the migrants to move on from one condition to another, one job to another, one economic situation to another, and one economy to another. Autonomy of migration means thus heterogeneity of labour forms. This is again brought out by empirical studies, like the one conducted by Betts and his colleagues. That more than two-thirds of refugees are in protracted displacement, at times in camps and without the right to work or move freely, does not mean that they stay put in one place. As Betts and his colleagues in their research on African refugees demonstrated, despite the constraints placed on them, vibrant economic systems often thrive below the radar, whether in the formal or informal economy. Refugees are not economically isolated; they are part of complex systems that go beyond their communities and the boundaries of particular settlements. Their report tells us of maize grown in settlements then exported across borders to neighbouring countries, and Congolese jewellery and textiles imported from as far as India and China. Somali shops import tuna from Thailand, via the Middle East and Kenya. They are as a result mostly not burden on host states. Migrant labour is relevant to global supply chains of commodities, it is the global nature of the supply chains that produces footloose informal labour and ensures that various categories of the displaced finally add up to the reserve army of labour to be deployed where and when necessary to the extent that big refugee camps look like townships with specific economies linked to various commodity chains. And it is this condition that accounts for the relative autonomy of migration. Therein is the significance of migrant labour, whose marks are irregularity, informality, subjection to unequal labour regimes, degradation of work, footloose nature, subjection to violence, and the fundamental relevance of migrant labour to the logistical aspect of neoliberal capitalism, such as construction labour, work in supply chains, waste processing including e-waste recycling, and last but not least in care and entertainment industry.

The last area of work mentioned above is important for our discussion here, not least because in discussions on migrant economy sex work is almost absent. Yet it is in discussions on sex work and trafficking that we find all the paradoxes of the labour market reality. In fact the trafficking framework is inadequate for the purpose of analysing the experiences of sex work and exploitation in the field of commercial sex. The problems migrants encounter in this field are more often related to the institutional structures of immigration and the implementation of prostitution policies that restrict and prevent possibilities of migration. Sex work is a migrant-dominated field throughout the world. A recent study shows that half of the sex workers in Europe are migrants, and in West Europe the percentage is much higher – nearly 60 to 75 per cent (Report by TAMPEP – European Network for HIV/STI Prevention and Health Promotion among Migrant Sex Workers – “Sex Work in Europe: A mapping of the Prostitution Scene in 25 European Countries”, Amsterdam, 2009).

We rarely analyse the situation from the migrant’s point of view because of the dominance of the discourse of trafficking, which means that migrant sex work has been seen always in the context of sex trafficking, known today as modern slavery. We rarely take into account the struggles and negotiations on restrictions of movements and against constraints in the labour market. The trafficking discourse also takes our focus away from labour market analysis, analysis of the associated institutional and structural framework, such as border and immigration controls, visa requirements, and a discriminatory labour protection framework that can be very much racist. These controls modulate access, in this case of the sex workers, to labour markets. The situation produces circular migrants, who would not have the protection of welfare benefits, but on the other hand face continuous deportation threats and possibilities.

In short, immigration policies produce precarious labour. What is important to note in this context, and this has general significance for the task of theorising the migrant as living labour, is that, migrants in the informal labour market are not always particularly dependent on specific employers. Often their fate depends on immigration policies. They reproduce the overall uncertain conditions of the life of labour under capitalism. This calls for a rigorous analysis of the link between the refugee like condition and capitalism, and understand thereby the reasons why refugees and migrants working for low wages are essential for capitalism.

[Prof. Samaddar is the Distinguished Chair in Migration and Forced Migration Studies, Calcutta Research Group. He can be reached at]


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