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 20th or early 21st century needs these refugee or immigrant economic actors.

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.


Between assistance and control of migrants

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? Refugee 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.

The Kibumba camp, located in the Democratic Republic of Congo, near the border with Rwanda, is self-managed, with the help of the UN and NGOs. Photo Credit: Julien Harneis/Flickr

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. In all these analyses, 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.

Refugees contribute to the host country’s economy

African refugees in Greece. Europe is often seen as a dream or a land of asylum. Phot Credit: Hunter/Flickr

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.

Governments have realised that labour market integration calls for investment and viewing the arrival of refugees and other forced migrants as opportunities, triggering further growth. 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.

Capitalism feeds on the informal economy and refugees

Yet migrant economies create problems for any policy of facilitating labour market integration, because these economies 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 the 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.

The refugee economy, a global economy

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.

Legal work, informal work? The living conditions of migrants are difficult to know. Photo Credit: ILO/Muntasir Mamun/Flickr

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. 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.

Skilled refugees who adapt

Syrian refugees living in Azraq camp in northern Jordan. Photo Credit: DFID/Russell Watkins/Flickr

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.

Quantitative parameters will then 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. However, 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 percent 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, Hong Kong, 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.

Active, autonomous and nomadic migrants

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.

Tamil refugees arriving in India, Tamil Nadu State, fleeing Sri Lanka’s Civil War. Photo Credit:

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 Alexander 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 corn 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.

Refugees, a new reserve army of workers

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.

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.

Ranabir Samaddar, Directeur, Mahanirban Calcutta Research Group.

This article first appeared on The Conversation.