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How a Syrian refugee camp opened for business

The Syrian refugees have set up so many businesses that if the camp were a country it would rank as one of the friendliest places for companies globally.

Economists view a country's 'start-up rate' - the number of new firms divided by the number of existing ones - as an indicator of how business-friendly a place is. In the US the start-up rate is around 20 to 25 per cent in a given year; in entrepreneurial hotspots it can reach 40 per cent. In Zaatari - the largest Syrian refugee camp in the world, located in the Jordanian desert - the start-up rate for 2016 was 42 per cent. The Syrian refugees have set up so many businesses that if the camp were a country it would rank as one of the friendliest places for companies in the world. The entrepreneurs of Zaatari are welcoming, sociable and happy to share their business tips.
The first rule when doing business in the camp is a familiar one: location is vital. The main strip that takes you deeper into the camp is a road the UNHCR refers to as Market Street 1 but that everyone else calls the Champs-Elysées. (Charities that operate in the camp have their bases nearby; the nickname is in part a pun related to the fact that the road starts near a French aid agency's hospital.) A diverse clientele ranging from newly arrived refugees to off-duty aid workers constantly trawls up and down the street and can choose from a host of goods and services: a decent coffee, a haircut, wedding-dress rental, a falafel wrap, or chicken shawarma takeaway.
A few hundred metres into the camp most people turn left off the Champs-Elysées as they head to the housing districts to the east. This bustling strip - formally Market Street 2 - is known as 'Saudi Shop' (the firms here operate out of caravans donated by Saudi Arabia). The stores close to the main junction sell durable wares: clothes, televisions, DIY materials and bicycles. Further along Saudi Shop activity starts to thin out and the street becomes Zaatari's version of an out-of-town retail park, offering metal posts, tools, wood to refugees seeking to build an extension to their houses.
Mohammed Jendi owns the biggest store on Zaatari's main streets, a large clothing emporium located on Saudi Shop. A little further down Saudi Shop we find what I am told is the best bicycle store in Zaatari. The store's owner, Qaseem Al Aeash, explains that his success is also down to the desire for individuality. The refugees are not allowed cars or motorbikes, but the camp is packed with bicycles. This includes 500 sturdy two-wheelers donated by the Netherlands. The donated bikes are loved and can go for up to $200 when sold. The only problem with Dutch bikes is that they all look the same: they are all the same design and started off black or dark blue.
So Qaseem helps his customers pimp their bikes, spraying them bright colours and adding bells and pinstriped grips. His own steed is a beauty: designed to look like a motorbike, it is bright yellow with red stripes and reflectors, twin exhaust pipes stuck to the sides and dual speedometers.
Zaatari's entrepreneurs keep a close eye on costs and have some rare advantages in doing so: electricity supplies are often informal spurs from the main grid - a practice that is banned but means free power - and there is no tax collected inside the camp. Zaatari, in its own accidental way, is akin to the kind of state-subsidized enterprise zone that governments, most notably China, use to stimulate activity. While not sustainable in the long term, it does offer a lesson in how an economic hub can be launched by lowering entrepreneurs' costs and barriers to entry. Once off the ground, the business community in Zaatari explained how they seek their own efficiencies too: one of the secrets of Hasan Al Arsi's success as a baker is economies of scale, he explains. Knowing that knafeh is a strong seller, he makes huge quantities of these and other baked sweets at his main bakery. Doing these big batches keeps costs down, and his employees then transport trays of baked goods to his four outlet kiosks dotted across Zaatari. Offering a taste of Syria is so popular that he is opening a fifth outlet soon. This hub-and-spoke method of cooking and selling food is exactly the so-called 'dark kitchen' model now being pursued by Travis Kalanick, the founder of Uber.
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- Richard Davies is the author of Extreme Economies: What Life at the World's Margins Can Teach Us About Our Own Future, from which this article is excerpted