In Kenya, more than 300,000 people live in a UN-created city of shanties and tents, without power, sewage, or the legal right to work. An entire generation of people has been born and raised in this city, dependent on the UN for meager rations to survive. This city is Dabaad, the world’s largest refugee camp.
It was established in 1991 for Somalis fleeing civil war. It has since grown into the third largest city in Kenya, as continued Somali instability has created more refugees. However, it remains a refugee camp, impermanent, waiting until the refugees can return home.
But after Al-Shabaab killed 148 people at a university in Garissa, the government began moving to close Dadaab, fearing Al-Shabab is using it as a recruiting ground. Unfortunately, that is unsurprising. Put together large numbers of young men who were exposed to violence during their formative years, give them no opportunity to become productive members of society, and some will turn to violence.
The world has modeled its response to the refugee crisis on the immediate aftermath of the Second World War, and more recently the fall of the Soviet Union. The thinking is that refugees simply need to escape temporary violence, after which they can return to their lives. Regrettably, we no longer live in that world. Today refugees are fleeing violence that is largely intractable. The UN reports that more than half of total number of refugees have been exiled for more than five years. As such, it is time to stop thinking in terms of refugee camps. Europe, admirably, has tried to welcome refugees. However, the populist backlash suggests their approach is unable to deal with the magnitude of the crisis. Resentment inevitably accompanies large new immigrant populations with alien cultures.
Refugee cities can help. A refugee city is a new city built for refugees with a degree of legal autonomy. Most refugee camps do not allow refugees to legally work or own property. The refugee cities, on the other hand, would allow refugees to legally enter, work, and rebuild their lives. Few investments are made in the camps because the refugees are expected to return home. Refugee camps function as an extended camping trip, with no running water, sewage, permanent structures, or a hope of improved living conditions.
Refugee cities are inherently more permanent than refugee camps. The legal right to own property would lead to greater investments in property. Instead of living in tents for decades, refugees would build houses. The legal right to work would allow refugees to enter the global economy. Multinational corporations would invest, creating stable and well-paying jobs.
The key to refugee cities is a legal environment conducive to economic development. The baseline is ensuring refugees have the right to work and own land. More radically, refugee cities could import good institutions. A refugee city with rule of law, property rights, and economic freedom would become a beacon for refugees everywhere.
One version of this is charter cities, an idea pioneered by Paul Romer, now chief economist at the World Bank. Charter cities are new cities built in the developing world governed by developed countries. Kenya, for example, could ask Denmark to govern Dadaab. Danish governance would then spur investment, creating jobs and leading to economic growth. The key is importing successful institutions that are known to encourage economic growth.
Alternatively, refugee cities could be privately developed. Naguib Sawiris, an Egyptian billionaire, attempted to buy a Greek island to house refugees. Today, the private sector often leads the initiative to build new cities. City governance could be provided by the UN, the World Bank, the host country, and the developer working together.
Hong Kong demonstrates how cities with good institutions can rapidly accommodate large numbers of refugees. During the final years of the Chinese civil war, from 1946 to 1951, Hong Kong absorbed 1.5 million refugees, as many as 100,000 per month. Because Hong Kong was ruled by British common law, generally considered the best legal system for economic growth, the refugees were able to find jobs and rebuild their lives.
Refugee cities are also a politically attractive solution. Because they are territorial, the host country would face limited opposition. The refugees would not threaten jobs in the host country, but rather provide them as the city grows. Further, refugee cities can pay for themselves.
Refugees cities would create wealth. The refugees would need assistance for the first year after their arrival. This would likely include food and shelter. They would own the land under and surrounding their shelter, though would be expected to pay taxes after an appropriate time period.
After the initial assistance, refugees would find productive jobs. This would increase the value of the land, paying for initial infrastructure investments. This model has been used to raise tens of billions to build new private cities and would apply equally well for a refugee city.
The primary barrier to refugee cities is a lack of imagination. Political elites are risk averse and tend to avoid thinking outside the box. Luckily, refugee cities are slowly gathering support and have yet to find any real detractors.
Currently Jordan has been the boldest state actor. Many of the refugees living in the Zaatari refugee camp will soon receive work permits to find jobs in a nearby special economic zone. The Jordanian government has already invested $100 million in the zone. The jobs will likely be related to manufacturing, as Jordan’s queen publicly supported the idea and several manufacturing CEOs expressed interest.
Nevertheless, the world needs to move faster given the scale of the refugee crisis. Gordon Brown, George Soros, and Ann-Marie Slaughter have all supported special economic zones targeted at refugees. The nonprofits Refugee Cities and Refugee Nation both support attempts to create territories with a degree of legal autonomy for refugees.
The refugee crisis shows no sign of abating. Current solutions have proven insufficient. As such, it is time to think more boldly. New cities with good institutions can absorb large numbers of refugees while giving them the opportunity for better lives. It is time to build refugee cities.
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