A significant proportion of the world’s refugees end up in so-called protracted refugee situations, being stuck in limbo in camps or settlements for many years. Traditionally, there have been three durable solutions to bring ‘the refugee cycle’ to an end: repatriation, resettlement, and local integration. However, for many refugees, these options are simply unavailable, and they spend many years without the right to work or to freedom of movement.  In some rare contexts, host states have attempted to offer refugees forms of self-reliance or the opportunity to earn a livelihood or to work. However, even in states in which refugees do have the right to work of freedom of movement, there are often few livelihood or training opportunities available to refugees, whether in rural or urban areas.

Livelihoods projects or self-reliance have often been conceived in an unsustainable way. Refugee issues are generally seen as a humanitarian rather than a development challenge. So when livelihood projects have been developed or refugees have had freedom of movement, organisations like UNHCR have not always had the resources to create the training, entrepreneurial or work opportunities desired by many refugees. There are a range of livelihoods projects for refugees, not least in urban areas but they tend to be small-scale, based around a limited range of professions that fail to acknowledge the diversity of skills and aspirations of refugees, and they are generally conceived based on a logic of charity rather than one of sustainable market opportunity.

Yet the missing link in making self-reliance and refugee livelihoods a sustainable reality may well be the private sector. Humanitarians have too often had an instinctive antipathy for the private sector. And, historically, it is striking how little humanitarian actors have tried to engage the private sector. Yet livelihoods and self-reliance can ultimately only work if sustainable market-based opportunities are found. Many NGO implementing partners to UNHCR do partner with local private actors to provide training opportunities. For example, in Kampala, Interaid partners with a local garage to offer skills training to Congolese and Sudanese refugees but these opportunities tend to be isolated and small scale.

If refugees could be conceived to be a ‘benefit’ rather than a ‘burden’ to their host communities, to be engaged as market actors who bring an economic contribution to their host societies then this could be a game-changer in the way refugees are perceived and hosted by local host populations. Yet, where self-reliance is based on donor contributions or charitable projects it tends to fall short of creating genuine sustainability. Of course, refugees will always need emergency assistance and support from donor and host states. However, if private sector actors can be engaged at the local, national and global levels, there may be the possibility to reconceive the entire basis of the ‘refugee experience’.

The question then is how can the private sector be engaged in refugee protection? What are the incentives that can draw in private sector actors or ‘crowd in’ rather than ‘crowd out’ markets as an alternative to state-based assistance? UNHCR has over recent years begun to develop greater private sector engagement. It initially saw multinational corporations and foundations mainly as a fundraising opportunity. It was assumed that their contribution would be based on either philanthropy or corporate social responsibility. Yet, gradually, there has been a realisation that there may be another way in which the private sector can be engaged based not on a logic of charity but on a for-profit basis: through innovation.

Innovation is not the same as invention. It is not about novelty but about finding ways to adapt existing technologies to address particular bottlenecks within context. It represents a potential motive for private sector engagement insofar as refugee communities represent a potential source of ideas, creativity and technological adaptation. They represent a group within which products and processes can be piloted, prototyped and then taken to scale. This process can take place on many levels.

At the grassroots level innovation may be as simply as refugees themselves finding improved ways to engage in rainwater harvesting, forming collectives to enhance their ability to market their produce at higher prices, or developing ways to microfinance small businesses. At the national level, there may be ways to engage local entrepreneurs. In Uganda, an engineer at Makerere University, Moses Musaazi, has developed a firm called Technology for Tomorrow (T4T) which has developed an affordable sanitary pad – the Makapad – which has been made and developed in the Kyaka II refugee settlement, and is now aspiring to be taken to scale in the national market. At the global level, refugees and displaced populations potentially offer a context in which companies might pilot and prototype products, with the potential go to scale to a far larger market, with the possibility to reverse innovate products for Western consumers.

Innovation thereby creates a potential motive for private sector engagement at all levels, drawing in and developing a new range of solutions within the different sectors that comprise humanitarianism – water, sanitation and hygiene, health, and information and communications technology, for example. In turn this may reduce dependency on international assistance while simultaneously bringing better solutions to the challenges faced by refugees. Furthermore, it offers the possibility to develop the skills, talents and agency of refugees. Participatory approaches to innovation, which promote the creativity and entrepreneurialism of refugees, can empower in ways in which many aspects of humanitarianism disempower by creating dependency.

The question then is how can such an approach be conceived? There are precedents of humanitarian innovation initiatives in other contexts, which have partly built upon private sector partnerships. UNICEF’s innovation labs, the largest of which are in Kosovo and Uganda, have developed different models of innovation but have simultaneously improved UNICEF’s own interventions while developing the skills, entrepreneurialism and civic participation of young people, in particular. Private sector initiative has been key. In Kosovo, young people have been mentored to develop their own social innovation projects and businesses. In Uganda, local partners like Uganda Telecom have made in-kind contributions.

A necessary starting point for engaging the private sector through innovation is research. This is needed at two levels, which might be phrased as ‘looking inwards’ – understanding the skills, talents, livelihoods, and aspirations of particular refugee communities within their cultural context - and ‘looking outwards’ – identifying potential private sector actors and untapped technologies and ideas in relevant sectors of humanitarianism which might be matched with the opportunities afforded by the particular context.

These two levels of analysis might then be brought together within a physical space – ‘a Refugee Innovation Centre’, within which refugees’ own skills, talents and aspirations would meet outside ‘solution holders’, whose ideas might be adapted to context in order to promote market-based opportunities that benefit refugees, enhance the tools available to humanitarian organisations, and create for-profit opportunities across the board. Such ‘Refugee Innovation Centres’ might be located in rural or urban areas, and their focus would depend on context. They might provide the equipment, mentorship, and training space within which refugees’ own ideas and talents could be incubated with engagement from a range of external actors. The aim would be to create a diverse range of sustainable livelihoods and business opportunities for refugees, which simultaneously benefit the host community.

Most refugees want freedom and opportunity rather than dependency and indefinite welfare. It is a human tragedy that refugees spend years on end in camps with access to post-primary education, livelihood opportunities or freedom of movement. Humanitarian organizations like UNHCR have traditionally lacked the capacity to take a developmental approach to refugee protection. Yet, it may well be that the private sector – at all levels from small groups of refugees up to large global corporations – represents the missing link for potentially transforming the paradigm on which refugee protection has been based. Furthermore, if best practices can be developed that highlight how refugees can contribute to development and growth, host governments may begin to see refugees as a benefit rather than a burden and begin to change their own policies accordingly.

                                     Alexander Betts
Uganda has one of the most progressive regulatory frameworks governing refugee protection in Africa. Unlike many of its neighbours, which encamp refugees, Uganda has a ‘self-reliance’ strategy, incorporated within its national legislation. This means that rather than limiting responses to refugees to humanitarian relief, a space is open for a development-based approach to refugee assistance.

Upon receiving status, refugees are given generous plots of land within designated settlement areas, which at the moment are 100 x 50m for a family 1-6 people. They are given so-called ‘non-food items’, including basic tools with which to cultivate, enabling them to subsist and sell any surplus. There is also some freedom of movement, although it requires permission to be sought from the Settlement Commander, and movement to urban areas is discouraged.

A look at Kyangwali  - the second largest settlement with 25,392 refugees (21,416 Congolese and 3678 Sudanese) -highlights many positives. Compared to most other refugee situations in Africa, the settlement offers a relatively high quality of life. Refugees have good size plots of highly fertile land on which they are able to grow mainly beans, maize, and rice. This means that the World Food Programme is only required to provide food assistance to new arrivals and the most vulnerable. Refugees have access to the same primary education and health facilities as the local population. Across a series of around a dozen villages, small shops run by refugees line the high street, and one can even go and enjoy rice, beans, greens for around 1000 Ugandan shillings in one of the ‘eating houses’.   

However, one is also left with a feeling that there should still be more and that there should be some prospect for people to aspire beyond a homogenized agricultural community. Many of the refugees have been there since the late 1990s and many of the young people were born there. The expectation is that everyone should be content with a simple agricultural life – even though many of the Congolese and Sudanese arrived with a diverse array of skills.

There is practically no post-primary education, with only a few scholarships to enable access to secondary schools, and a large youth population spends its days with little to do other than to hang out and play pool around open-air tables. The Finnish Refugee Council has run a library and a small computer room at its youth centre. Yet, the area is behind barbed wire fencing, uninspiring, and it the process of being phased out due to lack of funding.

In many ways this is as good as refugee protection in Africa gets and the Ugandan government can only be praised for its self-reliance strategy. However, with a few thoughtful interventions things could still be far better. There is no reason why refugees should all be presumed to spend their lives as homogenous subsistence farmers. Instead, aspiration and variety might be promoted through facilitating better activities and training for the youth, distance-learning programs to close the secondary education gap, cooperatives to increase the return on the sale of crops to exploitative market traders who buy-up surplus yields.

All of these things could be done with an innovative set of activities that work with refugees to engage them in sustaining activities within their own community. There is no reason a refugee camp should look like a kolkhoz and insist on equality and homogeneity among the populations. Of course, there are challenges of needing to avoid divisions within the community or with the local population. However, this should not be used as an excuse to limit activities that promote human flourishing, aspiration, and skill acquisition. The Ugandan government’s pioneering approach offers a canvas on which to build.                     

                                       Alexander Betts

At the domestic level, state intervention is generally justified to correct for market failure: if a good is collectively valued but under-supplied, the state often steps in.  A similar rationale applies at the international level. Domestically, welfare states are justified on the grounds that certain goods and services necessary to support the conditions for basic human dignity are not provided by the market. Internationally, inter-governmental humanitarianism is similarly justified by the assumed inability of the market to provide an analogous basket of goods. Because the "invisible hand" of the market is assumed not to be able to provide the food, shelter, health and security of the most vulnerable, an array of international and non-governmental organizations frequently step in and provide those goods and services.  Some goods are assumed to be "private goods" provided by the market but others – like humanitarianism - are assumed to be "public goods", which can only be offered by the state or its international analogue, the inter-state.

In the area of humanitarianism in which I work – refugee protection – responses have traditionally been defined by this implicit logic.  In an emergency, when refugees flee across a border into a neighbouring state the public international – acting through international organisations - effectively annexes a territorial space within that state within which is collectively provides humanitarian assistance. The implicit reason why it is seen as necessary for this role to be played by an intergovernmental actor is to fill a market failure: it is supplying a public goods that would not otherwise be supplied by the market.  However, relying almost exclusively on what might be referred to as an "inter-governmental welfare statist" approach beyond the initial emergency phase creates a range of challenges. First, it risks creating dependency among refugees.  Their own skills and talents may be under-used when refugee situations endure beyond the emergency phase and become protracted. Second, it may not be sustainable given that there is a finite funding pool at the intergovernmental level, often constrained by the generosity of donor government taxpayers.

Of course the intergovernmental part of humanitarianism is crucial for ensuring the provision of assistance that would not be provided by the market. However, the danger is that over-reliance on a purely statist logic risks "crowding out" the provision of humanitarian assistance by the market. At the local level, where refugees have been given opportunities for livelihoods or meaningful participation in markets, they have usually been able to use their own resources and skills to find their own methods of survival or forms of self-protection. At the national level, where free interaction between refugee and host communities has been allowed, business opportunities have frequently emerged to provide goods and services to refugee populations. At the global level, a range of private actors may find a business case for working sustainably with refugee populations that risks being crowded out by an exclusively statist approach.

UNHCR – as the main international organisation working with refugees – has gradually begun to recognise the potential contribution of private actors to refugee protection. Initially, it saw private actors as mainly philanthropic contributors. However, it has gradually begun to recognise the role of multinational corporations as prospective partners – capable of making a contribution to humanitarianism through expertise and innovation.  One of the keys to meaningful UNHCR engagement with the private sector is to map out the incentive structure underlying private engagement in refugee protection. Three incentives in particular seem likely to drive engagement from companies like IKEA, which recently made a 62 million Euro donation to UNHCR. First, values: the leadership of corporations is made up of individuals and within an oligopolistic industry those individuals have the discretionary space within which to act partly on the basis of values as well as just the profit motive. Second, brand: even working within the constraints of the profit-motive, MNCs may engage in corporate social responsibility as a means to developing brand association with humanitarian causes. Third – and most importantly – scalability: where piloting and prototyping a product within a particular context promotes innovation, it may enable opportunities for scalable products to emerge for which there may be a wider market.

It is the last of these – scalability – that offers the greatest but most neglected potential incentive for private sector engagement in UNHCR’s work. The organization’s 43 million population of concerns provides an almost ideal context for reverse innovation that can emerge from the field level, and then be scaled to meet the needs not only of refugees but potentially also other people within the world’s bottom 2 billion. By working with UNHCR, corporations such as IKEA, Formens Hus, Bechtel, Google, Facebook, CAT, for example, have the potential to develop innovations in shelter, health, water, sanitation, education, markets, managerial process, information and communications technology, which not only enhance the quality, efficiency and sustainability of humanitarian assistance but are also potentially scalable and more widely marketable. 

Embracing ‘scalability’ as a motive for private sector participation in humanitarianism has normative dimensions. On balance, though, and if done well, the moral case seems strongly in favour. When refugees are consulted about what they want, most do not want to be in an intractable state of limbo, dependent on welfare. What they generally want is a return as quickly as possible to autonomous engagement in markets.  Of course, there is no guarantee that MNC engagement guarantees that. However, done in the right way, incentives for private sector innovation may open up opportunities for greater refugee autonomy and a reduction in dependency. This would come through both process and outcome. Through directly involving refugees in the innovation process, they can become active participants in both problem-identification and solution development. Better innovation leading to the development of new educational resources, new market opportunities, the availability of better communications technology, and more efficient forms of remittance-sending, for example, would ultimately enhance the degree to which refugees can use and develop their own skills and talents, even within whatever wider political constraints are imposed by the host government.

The purpose of the state at the domestic level should not be to create indefinite dependency on welfare and nor should it be one that leaves vulnerable people deprived of assistance. It should be one that nurtures people to be capable of autonomously and sustainably participating in both society and markets. The analogy applies to the humanitarian context as well. The challenge of the refugee context is that states sometimes impose political restrictions on what refugees can and cannot do. But this does not mean that innovative ways of enhancing autonomy and minimising dependency cannot be found. The scalability motive potentially offers the opportunity to achieve this by combining the talents and resources of refugees with the greatest private sector innovation talents in the wider world.

But achieving this requires a new role for international organisations. Rather than simply being a direct provider of humanitarian assistance based on state funding, an additional facilitative role would be needed. It would be almost a "regulatory" role, seeking to recognise and channel incentives for particular kinds of private sector engagement. New Institutional Economics, for example, has long recognised the important interaction between states and markets. The right regulatory and incentives structures are needed for markets to work effectively. Analogously, for a humanitarian organisation like UNHCR, the challenge would be to create the right balance of incentives – at the global, national and local levels – to ensure "crowding in" rather than "crowding out" of market opportunities. Recognising and channelling those incentive structures in the right way has the potential to massively increase the potential source of funding available to humanitarian organizations, even in an "age of austerity", while transforming the very nature of protection and humanitarian assistance for the better.

                                     Alexander Betts