The Jordan Compact promised ‘win-win’ solutions for Syrians and the Jordanian government, allowing Syrians to work and boosting Jordan’s economy. However, the Compact’s financing structures have led to limited change for Syrian refugees.

The Jordan Compact, announced in early 2016, was hailed as a transformative approach to refugee livelihoods in protracted displacement. It promised to provide about 200,000 job opportunities for Syrian refugees in Jordan, and to turn the Syrian refugee crisis into a ‘development opportunity’.

In exchange for facilitating Syrian refugees’ access to the formal labour market, Jordan would receive significant additional donor financing to support its hosting of over 650,000 registered Syrian refugees. One key assumption driving the implementation of the Compact was that formalising refugee livelihoods would bring a range of benefits to refugees, including more stable work and better working conditions, thus increasing Syrian refugees’ self-reliance.

Research has highlighted the Compact’s key challenges and limitations, including how the Jordanian context and the perspectives of local experts, including refugees, were neglected in policy design, and the limited integration of a human rights or a labour rights perspective. It has also demonstrated the modest changes the Compact offered Syrians, its effects on other marginalised workers, and the very limited achievements of its high-profile trade reforms. But there has been much less focus on the Compact’s financing, and the effects this has had on how it played out.

At the heart of the Compact was a World Bank Program for Results (P4R), which was supported by the Global Concessional Financing Facility (GCFF), initially worth up to USD 300 million (and later increased to USD 400 million). P4R is a lending instrument first adopted by the World Bank in 2012, in which the Bank and recipient government agree on performance indicators and funds are disbursed according to the extent to which these indicators are achieved.

P4R is still relatively new within forced displacement response. The Jordan Compact P4R programme, which ended in January 2024, offers an important opportunity to understand its role in financing responses to displacement. While, according to UNHCR, the Compact puts Jordan “at the forefront of global efforts to give both refugees and host communities access to decent work,” many practitioners in Jordan now express both unease and disillusionment about the impact of the Compact. Our own research demonstrates that the P4R’s focus on easily quantifiable indicators as a means to advance labour formalisation is a crucial reason why the Compact has led to only modest changes in Syrian refugees’ working lives.[i]

The limits of indicator-oriented formalisation

Questions surround the effect of the ostensibly impressive number of work permits issued to Syrians over the past eight years. As the first disbursement-linked indicator of the P4R, and the one connected with the largest disbursement sum, it became the central focus of livelihoods programming in Jordan in the wake of the Compact. On paper, the work permits drive has made great strides, with nearly 446,000 work permits issued to Syrians between February 2016 and March 2024. According to an ILO discussion paper and numerous other studies, holding a work permit has made Syrians feel more secure while working, and less likely to suffer police harassment or deportation (to Azraq camp or even to Syria), which is a meaningful change in people’s lives. Yet, for those who hold jobs, having a work permit has not led to substantially higher wages or improved working conditions.

Work permits have also become increasingly detached from jobs, partly due to the way permits are counted. The count that has become decisive for funding disbursement is a cumulative one – it counts each work permit issued (for the maximum duration of one year), rather than each person holding a permit. The numbers have been further bolstered by the issuing of retroactive permits (for work assumed to have been undertaken – without a permit – in previous years) for Syrians who obtained a work permit for the first time.

The work permits currently held by the vast majority of Syrians are not tied to a specific job or employer. Rather, they legalise self-employment or casual employment, which is often precarious, irregular and badly paid. Work permits are also issued for participation in NGO-run ‘cash for work’ projects, which can last as little as three months, and very rarely lead to more permanent jobs. While these cash-for-work permits count towards the target in the same way as any other year-long permit and thereby perpetuate the idea that Syrian workers are sustainably employed and protected, they expire after the end of the individual’s participation in the project. The work permit reforms have helped to create impressive statistics and helped Jordan to make substantial progress towards reaching the targets set by the P4R, but very little can be ascertained about Syrians’ employment – or their working conditions – from the permit numbers alone.

The Compact barely addresses working conditions. Attempts to mitigate this within the P4R financing instrument have not been clearly successful. They centred around subscriptions to the national social security system as a new indicator. In choosing this indicator as a proxy for decent working conditions, the World Bank and its partners fell back on the prevailing international policy assumption that integrating refugees into national systems is desirable and beneficial in the medium term.

Mandatory membership in the national social security system replaced a private insurance scheme that had been running in the construction sector. That scheme was well-adapted to the needs of Syrians in Jordan, who are typically more focused on the cost of contributions and cover for workplace injuries, rather than pensions. The state-sponsored system to which all permit holders now have to contribute is not adapted to their concerns to a similar degree. While some workers have been able to access benefits through their subscriptions, many have experienced the scheme as an additional tax rather than an effective mechanism of social protection.

Similarly, attempts to address Syrian (as well as Jordanian) women’s low economic participation rates through the P4R focused on the licencing and registration of home-based businesses. While programmes set up to achieve this indicator did help some women establish or formalise existing small businesses, many more found few benefits in undertaking this costly, complex and bureaucratic process, which formalised the businesses but not typically the work. Most Syrian women in Jordan who are engaging in paid labour are undertaking survival-oriented economic activities, typically from home, often in food production or handicrafts. This work is oriented to the short or immediate term, fits around other responsibilities, is precarious and unstable, and thus cannot be formalised in such a way. The focus on home-based businesses as an indicator has not addressed their needs sufficiently.

The P4R formally came to an end in January 2024. As this date approached, the Jordanian government began to take steps that threatened to undermine the whole structure of the Compact and reverse key gains made, such as Syrians’ increased sense of safety from harassment by the authorities, modest wage increases (for some) or social security for those who could indeed benefit from being subscribed. Most crucially, in October 2023, changes to the social security law meant that many Syrians’ contribution rates increased dramatically (particularly for the most popular type of permit, the ‘flexible work permit’), and the obligation to pay the higher rate was backdated to January 2023. This has left thousands of Syrians with sudden and unbearably high debts,[ii] which continue to accumulate. In addition, since July 2024, all Syrians are now asked to pay over 500 Jordanian dinar annually for renewing permits, in contrast to the 10 Jordanian dinar they had paid since the establishment of the Compact.

Rather than gradually developing trust in the social security system as part of the work permits scheme and benefitting from formalised labour, most Syrian work permit holders now perceive both as a threat and find themselves trapped in a cycle of debt, which they can only realistically address by returning to informal work. This essentially punishes Syrians who formalised their labour, as both the government and donors asked them to do.

Lessons for displacement financing design and review

It is hard to imagine large-scale financing with no indicators or performance metrics (at least in the short term). However, the trajectory of the Jordan Compact demonstrates that measurement-driven forms of refugee governance can develop a life of their own, becoming increasingly disconnected from refugees’ lives and actual needs. To be successful, the design of large-scale financing instruments needs to involve serious consideration of how policy goals are translated into indicators. Two core principles need to guide programming developed on the basis of these financing instruments and the selection of indicators for them.

Substance over form
Indicators need to centre achievements that – according to the proposed beneficiaries – would represent meaningful and substantive improvements to their lives, rather than readily-quantifiable targets that are ostensibly proxies for meaningful changes.

Refugee participation
The search for indicators should include refugees in the design and evaluation stages. For example, large-scale refugee-led surveys, combined with qualitative research, could provide insights into refugees’ priorities and whether they believe their lives have changed for the better because of policy interventions.

In the case of future livelihoods interventions, financing initiatives could learn from the Jordan Compact by prioritising:

Policy interventions that will outlast financing
Legal changes of a more permanent nature, which are not reliant on continuous donor funding for their implementation and provide refugees with rights, would help refugees to establish themselves in the medium term and become more self-reliant even when large-scale funding becomes unavailable. For Syrian (and other) refugees in Jordan, this could include the right to open a bank account, own their own business without a Jordanian partner or easily obtain a driving licence.
Labour organising
Policy interventions seeking to improve the livelihoods of refugees need to see refugees as workers. Formalisation can easily become a hollow instrument if it is not accompanied by reforms that support labour organising and increase refugee workers’ individual and collective power. These could include work with unions and workers’ rights advocates, raising workers’ capacity for self-organising, and legal support to enable workers to access their rights more effectively.

In sum, large-scale financing instruments for displacement contexts must go beyond easily accessible numerical targets as proxies for positive change. The case of the Jordan Compact demonstrates this clearly, and cautions against a livelihoods approach based on a superficial focus on formalisation as a supposed panacea for labour market integration of refugees. To ensure that programming in the wake of these financing instruments remains connected to refugees’ lives (and makes a lasting difference), refugees need to be involved in the determination and continuous review of suitable indicators of success.

Katharina Lenner
Lecturer in Social and Policy Sciences
University of Bath, UK
k.lenner@bath.ac.uk

Lewis Turner
Senior Lecturer in International Politics
Newcastle University, UK
lewis.turner@newcastle.ac.uk

This research was supported by the ASILE project, which received funding from the EU Horizon 2020 Programme (grant agreement No. 870787); the project ‘Obstacles and Challenges to Women’s Labour Market Participation’, funded by QRGCRF; and the project ‘Increasing Social Protection in the Jordanian and Turkish Garment Industry’, funded by the AHRC (grant agreement No. AH/T008067/1).

[i] Lenner K and Turner L (2024) ‘The Jordan Compact, Refugee Labour and the Limits of Indicator-oriented Formalization’ Development and Change bit.ly/jordan-compact-refugee-labour-limits

[ii] See Fawaz A, Lenner K, Sadder I, Shehada R, and Turner L (2024) ‘Sky-high fees with few benefits: What’s wrong with social security for Syrians in Jordan’ The New Humanitarian bit.ly/sky-high-fees-few-benefits

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