TOOLS FOR ECONOMIC DEVELOPMENT FOR COMMUNITIES

IN MASS DISPLACEMENT SCENARIOS 

S U S T A I N A B L E D E V E L O P M E N T Z O N E S

A CONCEPT PROPOSAL BY

INTRODUCTIONTURNING THE REFUGEE CRISIS INTO A DEVELOPMENT OPPORTUNITY.

PAGE 1 | INTRODUCTION

Sadly, armed conflicts and natural disasterscontinue to drive people from their homes.Currently, more than 65 million people areconsidered refugees or internally displacedpersons (IDPs). In addition, several hundredmillion people are fleeing to urban centers andacross borders to seek better opportunities forthemselves and their families. Most of this ishappening within and between developingcountries in the “Global South.”

Against this backdrop, UN member states inSeptember 2016 adopted the New YorkDeclaration for Refugees and Migrants, in whichthey committed to improve planning for andresponse to large movements of refugees andmigrants, so that responsibilities will be sharedbetter among states. As part of this process,later this year UN member states are to adoptboth a Global Compact on Refugees (GCR) anda Global Compact on Safe, Orderly and RegularMigration (GCM). The latest drafts of thesecompacts draw on collective achievements likethe New Urban Agenda.

WE LIVE IN A WORLD OF UNPRECEDENTEDHUMAN MOBILITY AND OPPORTUNITY.

1.  By overcoming the still prevalenthumanitarian – development divide;  2.  By addressing additional funding needs; and  3.  By pursuing a multi-stakeholder approach. 

GCM and GCR foresee a reaffirmation ofinternational-law-based principles, includingreaffirming the human rights of refugees andmigrants and their protection, as well asoperational improvements, especially throughthe GCR’s Program of Action and the GCM’slist of objectives and actionablecommitments.

These draft compacts put migration and therole of migrants in a positive context,underscoring the power of migration tounlock human capital and promote economicdevelopment. They are focused on achievinglong-term and sustainable developmentsolutions, but they are open as to how thisshould be done.

The draft compacts also include a focus onmeeting the needs of host communities aswell as refugees and migrants. Along with thisis a pragmatic focus on “making it work” atthe local level (from the bottom up) as well ason the national and regional level (throughregional organizations) in three ways: 

PAGE 2 | INTRODUCTION

We believe that the humanitarian response isstill too focused on maintaining refugees as“objects of care” rather than empowering themto contribute directly to the development oftheir surroundings and host communities ascitizens, consumers, and producers. This is trueboth inside and outside of refugee camps. Wealso believe that the preponderance ofconventional providers of humanitarian anddevelopment assistance (UN agencies, IFIs,donors, and NGOs) has a tendency to crowd outinnovative solutions. Such solutions are neededto bridge the humanitarian – developmentdivide and to bring in more stakeholders in anownership role. These stakeholders mustinclude cities and municipalities, the privatesector and, most importantly, hostcommunities, refugees and other migrantsthemselves.

At the same time, we acknowledge that inrecent years there has been significant progressin the right direction.

Key examples are:

THE GCR AND GCM ARE BOTH POSITIVE ANDNECESSARY, BUT SPECIFIC CHALLENGESREMAIN.

Uganda’s policy of welcoming refugees bymaking them land owners and grantingthem the right to work, both to develop itsnorthwestern zone and to allow them tolive with more dignity and  lessdependence on aid. 

Ongoing efforts of WFP and others toswitch from in-kind aid for refugees tocash-based transfers, allowing them to livewith more dignity and to make spendingdecisions that have the potential to inducedemand-driven economic upswings, atleast locally.

The Jordan Compact with its newparadigm of “turning the refugee crisis intoa development opportunity” through EUtrade preferences for designated specialeconomic zones, and a steep increase inwork permits for refugees, allowing them towork both inside and outside these zones.

Building on this progress, and working in theparadigm of “turning the refugee crisis into adevelopment opportunity,” we believe that it ishigh time for a further-developed concept thatwe have termed “sustainable developmentzones”. Key elements of this concept, which wedescribe in the following pages, are foreseen inthe draft compacts, in particular in the draftGCR’s paragraphs 74, 88, and 105.*

WFP debit card program in Turkey | Photo credit: WFP

* In paragraphs 74, 88, and 105, states and relevant stakeholderspledge to contribute resources and expertise to support inclusiveeconomic development in refugee-hosting countries. Specificforms of support include job creation and entrepreneurship,private-sector and infrastructure investment,  skills development,access to financial services, social protection systems, and manyother elements that are central to the SDZ concept.  

I. THE SDZ CONCEPTHELPING HOST COMMUNITIES RESPOND TO AND BENEFIT FROM MASS DISPLACEMENT.

PAGE 3 | BACKGROUND OF SDZ CONCEPT

The sustainable development zone (SDZ)concept is a tool for helping developingcountries respond to the challenges of massdisplacement scenarios in a sustainable waythat will mutually benefit host communitiesand displaced people. SDZs are designatedareas with special administrative frameworks,policies, and services designed to produceinclusive economic development.

SDZs serve as islands of good governance. Theyoffer protection as well as humanitarianassistance and social services for refugees andother migrants, but they also leverage massdisplacement for the benefit of the localpopulation by encouraging entrepreneurship,self-sufficiency, and new investment in jobs andinfrastructure. 

SDZs are derived from two existing concepts foreconomic growth: (1) Special Economic Zones(SEZs) and (2) Displacement economies. SEZsencourage growth through special forms ofgovernance, and Displacement Economiesthrough the presence of new labor, ideas, andskills brought by displaced populations. 

that is distinct from the typical governancearrangements around them.

Distinct SEZ “governance” can mean distinctregulatory or administrative authorities, distinctpublic policies and laws, and distinct forms ofpublic service provision. SEZs go by manydifferent names, depending on their purposeand context. Traditional SEZs – includingfreeports, export processing zones, and freetrade zones – have concentrated on tax andtrade incentives. However, the most successfulSEZs increasingly are taking a morecomprehensive approach and addressing avariety of aspects of the business environmentand living conditions.

For instance, existing and planned SEZs inChina, the United Arab Emirates, and Hondurasestablish new kinds of administration, bodies oflaws, judicial systems, and models for deliveringpublic services. 

SEZs

SEZs are designated areas designed topromote economic development throughgovernance and physical infrastructure

DISPLACEMENT ECONOMIES

“Displacement economies" is a term used todescribe areas where economic activity isheavily driven by displaced populations.Despite numerous legal and practicalobstacles, displaced people have often foundways of engaging in productive economicactivity, whether informally or formally.

PAGE 4 | BACKGROUND OF SDZ CONCEPT

Refugees, for instance, are normally legallybarred from working in the countries hostingthem, yet many have formed businesses insmall-scale trading, services, and agriculturewithin the refugee camps and informalsettlements where they live, such as in Dadaab(Kenya), Za’atari (Jordan), and Mae La(Thailand). As mentioned previously, Ugandaallows the 940,800 refugees living within thecountry to legally work without geographicrestrictions. Refugees in Uganda live and workin the cities as well as in designated refugeesettlements like Nakivale and Bidi Bidi, both ofwhich host vibrant marketplaces. In mostsituations, these economies are a net benefit tothe countries hosting them, by producinggoods and services in short supply, generatingincome that is spent in the local economy, andcreating jobs for the local population. Evenwhen these economies are not a net benefit,they still serve to reduce dependence onhumanitarian aid and social services. 

Generally, the more the laws and generalbusiness environment support theseeconomies, the more productive they are andthe more they benefit the host community.

SDZs merge the concept of SEZs anddisplacement economies by creating spacesthat encourage the economic activity of bothlocals and displaced populations throughspecialized administration, laws, and services.  

Marketplace in Mae La refugee camp, Thailand | Photo credit: RFA.org

Marketplace in Za'atari Camp, Jordan | Photo credit: Nina Keck / VPR

Syrian refugees register with UNHCR in Lebanon | Photo credit: WorldBank Photo Collection

II. BENEFITS OF SDZsUNLOCKING THE SYNERGISTIC POTENTIAL OF AFFECTED COMMUNITIES.

PAGE 5 | BENEFITS OF SDZs

By creating attractive business environments,SDZs empower multiple parties –hostcountries, local populations, the internationalcommunity, private investors, and alsodisplaced people and their families. Thesynergies produced by SDZ can unlock thepotential of the affected communities.  

SDZs also provide governments with aneffective alternative for the management ofmigration. Countries often try to managemass migration through policing, camps, anddetention centers. Camps help clustermigrants to facilitate humanitarian aid,prevent migrants from competing with localsfor jobs, and ensure that migrants stay in alimited number of locations in the country,facilitating repatriation. However, despitecountries’ best efforts at enforcement,migrants often leave or avoid camps becauseof the lack of economic opportunities there.

In general, migrants prefer to live and work inthe cities outside the camps in the informalsector, though they and the host countrybenefit less from this than if they wereworking legally. SDZs create new economicopportunities and attractive livingenvironments for both migrants and the localpopulation, making the task of hostingmigrants less burdensome, and evenbeneficial.   

HOST COUNTRIES

For communities hosting large numbers ofdisplaced people, SDZs transform a perceivedproblem into an economic growth engine.Evidence shows that over the medium to longterm, migrants tend to benefit the economiesthat host them, through starting businesses,earning income, and filling gaps in the labormarket. However, most countries are notwilling to allow large numbers of migrants towork legally because of short-term concernsover competition for jobs, housing, and otherresources. SDZs overcome these obstacles byestablishing new, geographically limited areasthat attract new foreign investment, jobs, andurban infrastructure for the local population.Instead of having displaced people competewith the host population for a “slice of thepie”, SDZs quickly expand the size of the pie –creating more jobs and resources for all. 

INTERNATIONAL COMMUNITY

Providers of humanitarian and developmentassistance can use SDZs as a sustainablesolution to mass migration.

PAGE 6 | BENEFITS OF SDZs

Rather than providing ongoing temporaryhumanitarian assistance, SDZs create aplatform for individuals to eventually becomeself-sufficient.

Additionally, development costs for the SDZscan be minimized by channeling privateinvestment into real estate, businesses,infrastructure, and other productive assetsthat generate returns. Countries that areconcerned with displaced people eventuallycrossing their borders will also support theformation of SDZs in the major refugee hostingcountries in order to offer migrants anattractive alternative.   

BUSINESSES AND DISPLACED PEOPLE

Foreign and domestic businesses can findnew markets and underutilized talent inSDZs, as well as a business-enablingenvironment brought on by the SDZ’s specialadministration, laws, and services. SDZs alsoprovide displaced people with thepsychological, social, and financial benefits ofmeaningful work. This will allow them to bebetter guests of the host country, and preparethem to return home and rebuild their countries when or if this becomes an option.

Envoys meet over response to Syrian refugee crisis in Amman in February2017 | Photo credit: Jordan Times / Petra Photo

The Brussels conference on Syria 2017 approved aid worth $39.7 billion,including $30 billion in loans, for Syrian refugees' host countries includingJordan | Photo credit: Jordanian Ministry of Planning and InternationalCooperation

III. ADMINISTRATIVE FRAMEWORK FOR SDZsMAXIMIZING EFFICIENCY AND QUALITY OF MANAGEMENT OF PUBLIC GOODS & SERVICES.

PAGE 7 | ADMINISTRATIVE FRAMEWORK FOR SDZs

SDZ administration should be structured tomaximize the efficiency and quality of publicgoods and services.  

SDZ administrative institutions will be taskedwith governance of the SDZ, including itsoverall regulation, development, and provisionof public services. Generally speaking, most orall government functions within the zoneshould, if possible, be performed within thezone, without significant involvement fromnational administrations. This has similaritieswith the tested concept of UN interimadministrations and can be informed by thoseexperiences. For example SDZ administrationsmust include proper checks-and-balances,appeal mechanisms, and legitimacy, based ondemocratic participation by all stakeholders.  

SDZs should have two main levels ofgovernance: 

ORGANIZATIONAL FRAMEWORK FOR ANSDZ ADMINISTRATION

1) An SDZ administrator, which will be anorganization tasked with the overallgovernance responsibilities of the SDZ; and

2) An oversight board, to monitor the SDZadministrator’s performance.  

Creates space for SDZ Adopts law establishing SDZ and delegating authority to SDZ Potentially helps acquire land Ensures gov't coordination & legal protections

National Government (Host Country)

Consists of:

Oversight Board

Host gov'tUN / IGOs

Civil society SDZ resident representatives

SDZ Administrator

Infrastructure and utilitiesLicenses and permitsInternal regulations andenforcement (delegatedauthority)

Has long-term lease /concessionLeases parcels tobusinesses and residentsRevenue from land rent

Service Providers

Deliver public goods and social services within SDZsOperate one-step shop for permits, licenses, etc. to residents and businessesArranged by SDZ administratorCoordinated with host government, int'l orgs., etc.

Monitors actions of SDZ administrator, addresses complaints,and holds accountable.

PAGE 8 | ADMINISTRATIVE FRAMEWORK FOR SDZs

The national government of the host countrywill play the key role in defining the physicalextent of the SDZ and in establishing itsinstitutions; comparable to Jordan's role whenthe Jordan Compact was established.

This will include delegating authority to theSDZ administrator, and also ensuring theadministrator’s independence. By doing so,the host government can create the physicaland legal “space” for the SDZ to beginfunctioning. First, the host government shouldcoordinate with relevant local authorities toadopt laws giving the SDZ a special status,distinct from the rest of the country. Thisspecial legal status should empower anindependent SDZ administrator and oversightboard (as discussed above) to independentlyperform many governance functions within theSDZ. This must include the power to establishnew regulations that will enhance the businessenvironment and encourage investment. Itshould also include the power to create newand more efficient mechanisms for servicedelivery. Importantly, the enabling legislationshould also include a system of accountabilitythat will establish a foundation of democraticlegitimacy within the SDZ itself, withoutinterfering with the independence that allowsthe SDZ to function. Finally, the special legalstatus should include greater flexibility forforeigners – including those without nationallegal status – to engage in economic activitywithin the SDZ alongside nationals. 

NATIONAL GOVERNMENT

These ideas have all been tested andimplemented to one degree or another invarious projects; what we propose is tocombine them in one geographically delimitedzone.

The host government will need to set aside theland for the SDZ, or land will need to bepurchased. If the selected location is ongovernment-owned land, the governmentshould designate the land as an SDZ.

If it is on private land, the government shouldtake responsibility for acquiring it, and thendesignate it as an SDZ. If the land is alreadyoccupied, the rights of the current occupantsmust be fully respected even if the occupantslack formal documentation of ownership, andrelocations, if necessary, must be done inaccordance with international best practicesand accompanied by full compensation.

Once the SDZ is designated, the governmentshould then transfer rights and responsibilitiesfor the land to the SDZ administrator. Themost likely form this transfer can take is aconcession agreement or long-term lease.Under this arrangement, the governmentwould retain ownership of the land, but wouldallow the SDZ administrator to develop andprovide services within it and collect revenuein the form of rent, taxes and service charges. 

PAGE 9 | ADMINISTRATIVE FRAMEWORK FOR SDZs

The SDZ administrator should have thecapacity and incentives to ensure the overallsuccess of the SDZ.

This includes developing basic infrastructureand masterplans; regulating buildingstandards; providing public services (e.g.,power, water, and sanitation); issuing permitsand licenses for residents on behalf of nationalauthorities; and adopting and enforcingspecial rules and regulations for the SDZ. Theadministrator will most likely rely uponcontractors for many functions, with financing(and some guarantees) from an SDZdevelopment fund established by aninternational development institution. Theadministrator will submit an annual or semi-annual report to the Oversight Board. 

SDZ ADMINISTRATOR Necessary business services will includestreamlined customs clearance, streamlinedimmigration, and swift and simple permitting.

The SDZ administrator should streamline thedelivery of all services through a one-stopshop. At the one-stop shop, residents andbusinesses should be able to access a widerange of offerings through on-siterepresentatives from the relevantorganizations and agencies.

Additionally, the SDZ administrator shouldensure the provision of high-qualityinfrastructure of all sorts. This could includeelectricity, water, wastewater treatment, solidwaste management, telecommunication links,roads, rail and intermodal facilities, and publicopen spaces. Whenever possible, theseservices should be acquired from providersoperating in the host country, and fundsshould be used to improve the reliability andcapacity of those local providers, rather thancreating parallel infrastructure.  

An interesting related project is underway inUlaanbaatar, where an organization isconverting an existing informal settlement intoan independent "microcity." The microcity willfeature decentralized governance, directdemocracy, and innovative approaches topublic services.

SERVICE DELIVERY IN THE SDZ

The oversight board and SDZ administratorshould ensure the provision of a wide range ofpublic goods and social services throughcoordination and contracting with the hostgovernment, other governments, firms,international organizations, and civil society.

These public goods and social services shouldinclude security, law enforcement, disputeresolution, need-based assistance, publictransportation, healthcare, and education.  

IV. DEVELOPMENT MODELS FOR SDZsVARIOUS OPTIONS & STYLES FOR SDZ DEVELOPMENT.

PAGE 10 | DEVELOPMENT MODELS

Broadly speaking, there are two models for the development of an SDZ.

An SDZ can be built as a greenfield development, which means the location chosen for the SDZ iscurrently undeveloped and unoccupied, and the site will be built from scratch. Alternatively, an SDZcan be built around an existing site (a “brownfield development”), which means the location isalready occupied in some way and will be retrofitted for the SDZ. Each of these models fordevelopment are similar to the development of business parks and SEZs; the forms they can takeare discussed below. 

A greenfield SDZ allows for a blank-slate approach in which the SDZ can be developed to meet thespecific needs of the project or of a specific industry. Uncontested rights to property are mucheasier to acquire on unoccupied land and complications caused by previous construction can beavoided.

On the other hand, it can be difficult to find undeveloped land near existing population centers orinfrastructure, which are important factors for the success of the SDZ. This may mean thatgreenfield SDZs will be further from labor, customs facilities, and markets for goods and services. Itmay also mean additional construction outside the SDZ itself, such as road and rail links, will berequired. Finally, a greenfield site may be more expensive because the internal infrastructure andbuildings will need to be developed from scratch.

There are two styles of development for greenfield SDZs: 

GREENFIELD DEVELOPMENT

1. SITES AND SERVICES

2. PLUG AND PLAY

PAGE 11 | DEVELOPMENT MODELS

In a sites-and-services SDZ, the SDZ administrator will subdivide land into plots of varying sizes,provide basic infrastructure to the plots, and allow residents, businesses, and third parties (such asNGOs or developers) to self-build. This approach may promote economic efficiency because itaffords occupants flexibility to develop structures according to their needs, while also loweringupfront construction costs. It also allows for incremental development, which is responsive tochanging conditions.

In a sites-and-services model, the SDZ administrator will need to ensure occupants have the moneyto build and that there is an available supply of building materials and construction workers. TheSDZ administrator can facilitate this by establishing supply chains and financing mechanisms. TheSDZ administrator should also have the power to independently review building designs andmonitor construction standards.  

2. Plug and Play

In a plug-and-play SDZ, the administrator determines the types of structures and activities that willtake place in the SDZ and contracts with a developer for pre-built factory shells, office space,houses, and apartments – all ready for tenants to move in. This form is useful for ensuring strongbuilding standards, lowering construction costs for occupants, and allowing structures to bestandardized so they are useful for later occupants in the event of turnover. It is also useful if onedominant industry has already been identified because the structures and the infrastructure can bepurpose-built for that industry.

1. Sites and Services

Types of GreenfieldDevelopment

Pros:

Cons:

Sites and Services ("Self Build")

Plug and Play

Customized facilitiesLower upfront construction costsIncremental developmentMore economic spillovers

Easy entry for firms Strong building standards Standardized structures Quick start time

More difficult for firms Less control over business activities May require financing and building materials

Structures may limit types of businesses High startup cost Fewer economic spillovers

PAGE 12 | DEVELOPMENT MODELS

BROWNFIELD DEVELOPMENT

A brownfield SDZ is established in an area that is already partially occupied and developed. It canbe centered on an existing residential area, such as an informal settlement, the outkirds of a city, ora refugee camp. It can also be centered on an existing industrial area, including an industrial parkor port. The SDZ will increase productivity and create space for new opportunities for the area, withthe current inhabitants and businesses more or less remaining in place.

Brownfield development is less costly than greenfield development because the sites haveinfrastructure and buildings already in place. However, it will be necessary to work with existingstakeholders when assembling land for large new buildings or orienting the SDZ around onedominant industry, if that is a priority (it may not be).  

There are two styles of development for brownfield SDZs: 

1. Conversion of an Existing Camp or Informal Settlement

In a camp or settlement conversion, an SDZ would be established around an existing refugee campor informal settlement.

Current occupants could be the initial employees, and the camp itself would be the initialresidential district of the SDZ. The government would give the area a special status and transferresponsibilities to the SDZ administrator. The administrator would then work with residents toupgrade infrastructure, improve homes, establish formal businesses, and provide services. Theadministrator could also lay out new industrial and commercial areas following either the plug-and-play or sites-and-services model. The administrator would also set aside land for additionalresidential development as jobs are created for the local community. 

Mixing plug-and-play areas with sites-and-services areas within a single SDZ can facilitate theemergence of a greater diversity of activities, and make the SDZ more economically and sociallyresilient.  

Recommendation: Combination - Some sites-and-services plots and some plug-and-play plots.

PAGE 13 | DEVELOPMENT MODELS

Existing SEZs and industrial parks already have infrastructure and buildings in place, dramaticallylowering startup costs for the zone.

A business cluster may already exist, which can be expanded, and additional industrial land can bedeveloped to attract new businesses. Residents would be drawn from both displaced populationand host communities. Because the SDZ combines industrial development with residential andcommercial development, it can offer an environment that attracts potential workers and increasesthe available labor supply. In the case of an existing industrial park, streamlined import and exportprocedures and upgraded infrastructure would improve productivity.

2. Repurposing of an Existing Special Economic Zone or Industrial Park

Types of BrownfieldDevelopment

Pros:

Cons:

Existing refugee camp orinformal settlement

Available labor supply Some infrastructure already in place Structures already in place May produce economic spillovers

Infrastructure already in place Established businesses Low startup costs 

Land assembly more difficult More stakeholders

Need to relocate migrants and refugees Unsuccessful zones may remain unsuccessful due to factors (i.e bad location)

Existing Special EconomicZone or industrial park

Recommendation: Will vary by circumstances, but best option is probably existing industrial parklocated near existing refugee camp or informal settlement.  

When considering all the possible greenfield and brownfield approaches, the optimal strategywould be to establish an SDZ in an existing industrial park that is near a refugee camp or informalsettlement, with vacant land available for development. This strategy would dramatically reducethe need for new construction of infrastructure and buildings, because much of the industrial andresidential development would already be in place. New industrial structures and serviced landcould attract key enterprises and foreign and domestic firms. New residential development couldbe tailored to attract workers from within the country to the zone, and rule changes couldencourage upgrading of existing residential areas and the establishment of small businesses. Thiswould maximize the synergies of the models and minimize costs.  

V. LOCATION OF SDZsLOCATION OF AN SDZ WILL HAVE A MAJOR IMPACT ON ITS SUCCESS.

PAGE 14 | LOCATIONS 

Subsidies, enthusiasm, and political will are all less important than location.

The main location-based factors that will influence the success of an SDZ or any developmentproject are (1) proximity to existing infrastructure and markets and (2) access to a supply of landand labor. The SDZ creates conditions that allow these things to be efficiently combined, but it willnot succeed without those underlying factors. The easiest way to get a working combination ofthese factors is to focus on sites that are near large and small cities, as these places are alreadyexhibiting some level of economic success, and are already somewhat integrated into the nationaland global economy.

A precondition is that the local government supports the establishment of an SDZ, maybe incompetition with other municipalities. Local actors, like mayors, might also take the initiative forestablishing an SDZ, especially in the context of fragile countries. 

Elements of optimal locations include: 

Supply of available land for development, allowing room for growth;

Access to a seaport or an airport, by road or by rail, in order to minimize factor costs andshipping costs;

Infrastructure connections to water, power, sewerage, waste removal, andtelecommunications, which will reduce development costs

Proximity to potential workers and consumers, including both displaced and existingpopulations;

Low risk of natural disasters and low security risks, relative to other sites. 

SPECIFIC REGIONS

BANGLADESHThe Rohingya crisis in Bangladesh starting in 2015caused a sudden influx of nearly 700,000 refugees intoan under developed region of southeast Bangladesh.

This area, known as Cox’s Bazaar, was a touristdestination for wealthy Bangladeshis and containedenvironmentally sensitive sites that were quicklyoverwhelmed by the influx. The Bangladeshi Armyand international NGOs have been working toestablish camps and facilities for the Rohingya, butthe terrain and the weather have made it difficult. Thecurrent shelters are not suitable for the rainy season.Deforestation is occurring on the hillsides, water isbeing polluted, and the residents are totallydependent on aid.

Moreover, the rise of sea levels will displace 10-30million people from the coastal areas, incapable ofcontinuing their livelihoods. To avoid unmanagedurbanization, new population centers andsettlements need to be developed.

An SDZ could cope with the needs of such largepopulations and could provide the Rohingya and thelocal Bangladeshis alike with living and workingspace.  Export-oriented industries that already exist inBangladesh, such as the garment factories, can beincentivized to set up shop in Cox’s Bazaar orwherever space can be identified.

Currently, the refugee reception area has limitedinfrastructure and almost no prospects for formalsector employment. By attracting these industries,employment will rise among the locals and alsoamong the new arrivals. The SDZ would also includehousehold land assignments, creating a market forland and housing in the camps and allowing theRohingya to build their own homes and to grow crops,remediating some of the environmental damage thathas been done.  

POTENTIAL LOCATION: COX'S BAZAAR

ADDRESSING THE ROHINGYA CRISIS

PAGE 15 | LOCATIONS

This area is made up of 1.1 km2 that appears to beunoccupied. It is located 2km from the Kutapalangrefugee settlement and is bounded by roads. It is fourhours from a significant port in Chittagong, and thiscould be reduced to three hours with the constructionof a bypass around Cox's Bazaar. It is one hour froman airport that is currently domestic but is beingaccept international flights. There is a new 1200MWpower plant under construction.  

LIBYALibya faces simultaneous crises of governance,migration, and economy.

Formerly a destination for migrants from sub-SaharanAfrica, the country has now become primarily a pass-through for many migrants on their way to Europe.Those migrants who do stay must work under difficultconditions and are largely unprotected. Criminalsmuggler networks exist to bring refugees across theMediterranean and are a common and destabilizingfeature in coastal cities. The economy has contractedsharply since the fall of Gadhafi, with GDP at less thanhalf of pre-revolutionary levels and hydrocarbonoutputs at ¼ of pre-revolutionary levels*.

In the face of the sudden collapse of the Libyan stateand economy, local governments are fending forthemselves and trying innovative solutions to improvegovernance, address the refugee crisis, and generateeconomic growth.  

An SDZ in Libya will help local governments addressthese challenges. The SDZ will provide land forindustry and housing, preferential infrastructure, andadministrative services in order to stimulateeconomic activity and improve the quality ofgovernance. This will bring resources and expertiseinto the area, helping to realize the human potentialof refugees, IDPs, and migrants.

The SDZ will be an island of good governance,providing the most important precondition for privateinvestment in Africa. It will introduce business-friendlyregulations and will model good governanceinstitutions that can be replicated throughout thecountry. International tenants will anchor the SDZ, 

ADDRESSING THE COLLAPSE OF THE LIBYAN STATE

PAGE 17 | LOCATIONS

increasing demand for local goods and services andcreating new opportunities for local workers. 

A municipal capacity-building program will augmentthis activity to improve the quality of urban basicservices for all residents, including migrants andrefugees. Enhancing the ability of the municipality toattract and retain residents will create a zone ofstability that will encourage migrants to stop, settle,and work under good conditions, rather thancontinue on to Europe.  

* http://www.worldbank.org/en/country/libya/publication/economic-outlook-april-2017

EAST AFRICAThe Horn of Africa faces cross-cutting refugee crisesthat are raising tensions in the region. The issuesinclude refugees escaping from civil wars andsectarian violence, as well as increasingly frequentdrought and food shortages that are causingdisplacement. Much of the region is isolated and it isdifficult to provide services or security, and thedelicate environment in the area is suffering from thepresence of too many people on the land. Groups ofarmed men frequently cross the border betweenSudan, Ethiopia and Kenya to steal food and cattle.National armies have had to intervene, raising theprospect of a broader regional conflict.

Delivery of aid has stabilized conditions in the refugeecamps, but long-term funding commitments aredifficult to secure, and the situation will not resolveon its own in the foreseeable future. Economic activityis limited to informal sector transactions andsmuggling, and the camp environments are extremelybasic. Assistance and service delivery to displacedand migrant populations, mostly surviving in informalsettlements and slums, is minimal at best ornonexistent.  

But the most attractive urban population centers ofthe region such as Mogadishu, Nairobi, Mombasa, andAddis Ababa are already growing exponentially andwill struggle to accommodate these people. In theabsence of better options, many of them will try tomigrate to Europe or North Africa.

The SDZ model can provide a framework for the rapidexpansion of smaller population centers in the Hornof Africa. SDZs can provide work and settlementopportunities at the nodes of transportation andcommunication lines. This would be in line with someof the recent initiatives by the Government of Kenya,especially its decision to establish new cities; byEthiopia, with its focus on secondary cities as a major 

ADDRESSING CIVIL WAR & CLIMATE CHANGE

pole of economic growth; by Uganda, with itsprogressive policies towards refugees; and with thediscussions in Somalia on creating opportunities inand around Mogadishu.

An SDZ would also permit local infrastructureupgrades, improving conditions in the camps andslums. The areas with the most refugees are alsological transshipment hubs, and many of the campsare near proposed regional infrastructure projects.Providing industries in the SDZ with export andimport preferences could leverage existinginfrastructure and trade agreements to bring capitalinto the region. This will make the area more self-sufficient and connected, shifting the lead togovernments and the private sector, and relieving theburden on aid agencies.  

PAGE 18 | LOCATIONS