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Inclusive market systems

Many refugees and other people of concern who want to earn a living are facing the same hurdle: How to find paid, decent and sustainable work in their host communities?

UNHCR is supporting refugees in finding a durable answer to this question. Together with our partners we analyze markets, consider needs and dynamics and look at laws and regulations.

Our aim is to form holistic and realistic solutions that work for refugees and host communities alike. We strive to support refugees in becoming independent and self-reliant so that they can provide for themselves and their families.

A traditional way of supporting refugees to build a livelihood was to look at their existing skills, strengthen these skills through training and provide them with assets. But such interventions very often proved to be unsustainable. The problem was that these approaches didn’t fully consider if the respective markets were in demand for the skills, products or services refugees had to offer.

Nowadays, there is a growing understanding that these livelihood strategies need to be much more holistic and market-based. They need to consider wider labour market implications and be fully underpinned by an understanding of market dynamics and conditions.

What does UNHCR do?

To have a better understanding of potential market obstacles and to find sensible entry points for refugees into the labour market of their host communities, UNHCR partnered up with the International Labour Organisation to work on a market systems development approach. This approach is based on the analyses of the core functions of a market (for example supply and demand) and takes a closer look at the accessibility and effectiveness of supporting functions for refugees. The approach also recognizes formal and informal rules and regulations, which can be different for each market. 

UN Refugee Agency UNHCR livelihoods economic inclusion for refugees inclusive market system infographic
Inclusive market system - Improving livelihoods of forcibly displaced persons and host communities through economic and financial inclusion

The market systems analysis framework includes the following elements:

  1. Assessment of rules and regulations in a country, including challenges for refugees in regard to their legal status and the right to work; assessment of the general political, social and economic situation.
  2. Assessment of access to support services for refugees, including access to information, training, financial services and business development services.
  3. Assessment with a focus on socio-economics, to build a holistic picture of refugees in the country, their skills, protection needs, education, work experience and any other relevant characteristics.
  4. Market analysis to gain an overview of sectors and subsectors with relevance to refugees, identify potential for growth and employment creation and feasibility of intervention.

Based on the results of the analysis, strategies and interventions are developed that target both sides: the improvement of skills and capacities of refugees to meet market demands, and the creation of employment opportunities for refugees in relevant market sectors.

Further components that help to create market-based, results-driven economic inclusion programmes for refugees are the Minimum Economic Recovery Standards. They represent industry consensus on best practices for economic recovery in emergency and crisis contexts. Together with our partner from the Small Enterprise Evaluation Project (SEEP) we promote the adoption and mainstreaming of these standards.

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