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Article

Entrepreneurialism through Self-Management in Afghan Guest Towns in Iran

1
Department of Geography and Geology, University of Turku, FI-20014 Turku, Finland
2
Institute of Ecology and Earth Sciences, University of Tartu, EE-51014 Tartu, Estonia
3
Sharif Policy Research Institute (Iran Migration Observatory), Sharif University of Technology, 11365-11155 Tehran, Iran
*
Author to whom correspondence should be addressed.
Submission received: 25 September 2020 / Revised: 16 October 2020 / Accepted: 21 October 2020 / Published: 22 October 2020

Abstract

:
This article studies the self-management of guest towns (GTs) in Iran and the development of Afghan refugees’ employment and entrepreneurship in these settlements. No earlier research exists on refugee entrepreneurialism in GTs in Iran. The research is based on surveys (546 refugee respondents), interviews (35 refugees) and observations in four GTs in Iran, and interviews (12) with key public authorities related to Afghan refugees in Iran. Of the nearly one million Afghan refugees in Iran, approximately 30,000 reside in 20 GTs, each having up to a few thousand inhabitants. Following a decrease in international support for Afghan refugees and national privatisation policies, the Iranian government decided in 2003 that GTs needed to be self-managed to be financially self-sustainable by their Afghan refugee inhabitants. The motivation and necessity generated by GT self-management led to the increase, diversification, and profit orientation in Afghan refugees’ economic activities in the GTs. The GT refugee councils facilitated internal entrepreneurship fostered externally by state policies, such as the GTs’ obligation to become economically self-sustainable and the provision of tax exemptions and other incentives to GTs. A larger number of Afghan refugees (including women) obtained employment, various entrepreneurial trajectories emerged, and several businesses connected the GTs to the external economy.

1. Introduction

Refugee entrepreneurialism—that is, the attempts of refugees, whether as individuals, groups, or businesses, to create new or expand existing businesses, ventures, business organisations, or self-employment—has become increasingly common in cities, towns and other urban settings. Studies have shown the specificities in refugee entrepreneurialism in different urban contexts. However, very seldom have researchers gathered empirical material about refugee entrepreneurialism, such as business development, economic management, employment, and entrepreneurship, from within refugee urban settlements and camps, and they have rarely applied in the same research quantitative and qualitative data and analyses with mixed methods. In addition, while many studies discussed general aspects of entrepreneurship among refugees, they rarely focused on economic lives, entrepreneurship and entrepreneurialism inside refugee urban settlements and camps meant for refugees [1,2,3,4,5,6,7].
More than three million Afghans live in Iran, including about one million registered refugees, half a million Afghan passport holders with Iranian visas, and about one-and-a-half million undocumented migrants who remain in Iran without proper permission. The arrival of many displaced Afghans in the late 1970s and 1980s resulted in the need to construct temporary shelters and camps for them in Iran. This effort was supported by international governmental and non-governmental organisations (NGOs) and the Iranian government [8,9]. In 2017, according to the UNHCR (United Nations High Commissioner for Refugees), approximately three percent of the registered Afghan refugees in Iran—30,000 people—resided in 20 settlements that were specifically meant for refugees. These urban settlements were located in various parts of the country [9]. In Iran, these specific settlements for refugees, or Mehmanshahr (in Farsi, مهمانشهر), are usually called in Iran “guest cities”. The word “guest” refers to the initial situation from the late 1970s, when Afghans suffering from the war and political changes in Afghanistan were invited into Iran as guests with an immediate and permanent right to live in Iran. The word “city” refers to the urban character and physical layout of these settlements meant for incoming refugees. However, these sites are mostly small, usually a few square kilometres, and each hosts up to a few thousand Afghan refugees. Sometimes in colloquial use these settlements are called “refugee camps” though instead of temporary sites they have become urban settlements for protracted refugee situations. In fact, in some of these settlements the fourth generation of Afghan refugees in Iran has already been born. In this article, we refer to these settlements as “guest towns” (GTs) to be associated with the official designation of these areas and to recognise the dense physical layout of the sites and the function of these settlements as urban units managed by a GT manager, mayor and council.
At the beginning of the 21st century, the authorities in Iran made several decisions that impacted the position of Afghans in Iran. First, after accepting Afghans for decades as refugees in Iran, the newcomers from Afghanistan could not receive the status of refugee. Instead, immigrating Afghans could become regularised residents in Iran through formal visa and residence permit processes, otherwise they would be irregular immigrants. Until 2018, Afghan refugees could not visit Afghanistan without losing their refugee status in Iran. Since then, a one month visit to Afghanistan and the return to Iran is allowed without losing their refugee status. Second, the Supreme National Security Council of Iran declared some Iranian provinces and some cities within specific provinces as no-go areas (NGAs) for foreign nationals, including Afghan refugees, regardless of their right to reside in Iran. The decision was made on the grounds of national security, public interest and health, and it is internationally based on Iran’s reservations in Article 26 (freedom of movement of refugees) in the 1951 Convention Relating to the Status of Refugees [10]. Of the 31 provinces in Iran, 17 are full NGAs, 11 are partial NGAs and 3 have no specific limitations for the presence of foreign nationals. Thus, Afghan refugees are allowed to neither reside within nor travel to these NGAs, or they need especial permissions for it. This NGA policy decision was made in 2001 and it has been implemented since 2007 [11]. This impacted Afghans’ settlement and migration patterns in Iran and most Afghan refugees became to live in major urban areas in Iran. Among the sites in which Afghan refugees could continue to reside were the already existing GTs. In addition, a few new GTs were established to relocate Afghan refugees from the newly established NGAs [12]. Since 2019, Afghan refugee students can attend universities in selected NGA provinces, but otherwise the NGA restrictions are still valid for Afghans. Third, the Government of Iran decided in 2003 that the GTs should self-generate most of the funds necessary for their maintenance [13]. For each GT, an Iranian manager was appointed by the national authorities, and a refugee council was formed from each GT inhabitants, both of which would direct the GT’s development. In the end, the Afghan refugees in the GTs had to become economically more responsible for their own welfare in these urban settlements. In addition, during the 2010s, Afghan refugees got wider access to public services (such as education and health care) in Iran; however, the situation in the GTs remain basically the same.
This article examines the emergence of economy-oriented (self-)management and entrepreneurialism in Afghan GTs in Iran—a case rarely addressed before this article. The focus is thus on specific urban settlements in which Afghan refugees live. The study employed a mixed method approach to a refugee survey and interview material, on-site observations, and expert interviews in Iran. The research questions were as follows: (1) how and why did economy-oriented (self-)management changes occur in GTs in Iran and, following these changes, (2) what was the state-of-the-art for the employment and entrepreneurialism of Afghan refugees in GTs in Iran? In this article, we emphasise that among broader issues regarding refugees in urban settings, refugee camp entrepreneurialism (RCE) must be contextualised with in-depth studies that pay attention to policies, practices and outcomes at various geographical scales, as the case of Iran demonstrates.

2. Refugee Camp Entrepreneurialism

In economic terms, after decades of top-down humanitarian policies, refugees are nowadays increasingly considered to be “active partners in [refugees’] assistance and protection activities” [14] (p. 1). Beyond this, it is seen that refugees can become active economic agents whose actions lead to innovation, economic development and potential improvements to the welfare of individual refugees and the surrounding community and society [15,16]. Refugee entrepreneurship is an economic activity that helps refugees during their settlement and integration processes in host countries and it also increases, more generally, domestic entrepreneurship in the host countries [3].
Refugees in urban settings are part of a distinct sub-economy distorted by a distinct institutional context influencing how market structures function in practice. These include a distinctive regulatory environment with different international and national legal frameworks shaping the position of refugees vis-à-vis the state. The intersections between state and international regulation, formal and informal economy and national and international economies shape the economic lives of refugees and their interaction with markets. However, some refugees can transform these market distortions into opportunities supported by their social and cultural networks and individual talent and ambition [16].
Based on their extensive summary of refugee entrepreneurship case studies, ref. [1] (p. 274) argued that refugees engaged with entrepreneurship: had high levels of resilience in business, social and cultural issues; possessed an increased propensity to take business risks because they felt they had nothing to lose; focused on necessary instead of opportunity-based economic ventures; were ambitious to act instead of waiting passively; had the mentality and ability to start businesses using humble means; and depended on strong and weak ties when developing their economic activities (see also [17]).
However, although refugees possess certain legal rights in the country and location in which they reside, can receive institutional support to develop their economic activities, and may possess certain commonalities (as mentioned above), their situation inside refugee-specific urban settlements and camps for refugees is more challenging, in particular due to national and international regulations and policies, the physical environment and location of these sites, logistics and mobility restrictions regarding these sites, and constraints within the surrounding local host community [16]. To understand the particularities of refugee camp entrepreneurialism (RCE), it is useful to discuss the variety of refugee camps, as well as the main aspects found in studies about RCE. By RCE is meant here the attempts of refugee individuals, groups, or businesses inside refugee camps or settlements to create new or expand existing businesses, ventures, business organisations, or self-employment.
Thousands of refugee camps exist worldwide. In general, refugee camps are established after an influx of displaced people, irregular migrants, and asylum seekers into host countries. Refugee camp populations can vary substantially, from tens to tens of thousands of inhabitants. The largest camps, such as Kutupalong in Bangladesh; Dadaab, which consists of the Dagahaley, Hagadera, and Ifo sites in Kenya; and Zaatari in Jordan, have hundreds of thousands of inhabitants, thus they have become highly urbanised sites and have many features of cities and towns [4,18,19].
The majority of the world’s internally displaced people and refugees live in urban areas by obligation or by their own decision. Refugee camps are intended, at least initially, to be temporary spaces that host displaced populations in response to specific emergencies [20,21]. Nevertheless, during protracted crises, temporary emergencies often become permanent [22], such as in Kakuma, Kalobeyei Integrated Settlement, and Dadaab in Kenya [23]; several reception centres in the Greek archipelago [24]; many Palestinian refugee camps [25]; Buduburam Camp in Ghana [26] and Iran’s GTs [11]. The protraction often results in more permanent physical structures in these sites, and refugee camps often develop into refugee urban settlements. In addition, camps’ geographic locations vary from the suburbs (see [21,22,27]), including sites distant from existing settled areas [28,29] and those close to national borders or very far from them [21].
Refugee camps are usually governed formally by international, national, or local authorities, sometimes cooperatively. A distinctive feature is the presence of international agencies in the governance of these sites. More informal makeshift camps can also be self-managed by their inhabitants. Such informal settlements can be located next to institutional refugee camps or may become institutionalised over time in any location [21]. The UNHCR and key international organisations encourage self-management policies in camps to develop the self-resilience of their populations, see [30,31,32]. Therefore, the management of densely built refugee camps and urban settlements features many aspects similar to urban settlements, i.e., having a manager or mayor, a council deciding on the broader development issues and specific administration responsible for themes related to the physical and social welfare of the inhabitants, i.e., refugees.
The economic, employment, and entrepreneurship aspects of refugee camps have received less scholarly attention. Hosting a refugee population and related camp infrastructure requires investments and operating costs. Camps and their inhabitants depend heavily on external funding and donations, usually organised by international organisations such as the UNHCR. This makes the refugee settlements very different from ordinary towns. Although such external sources provide basic humanitarian aid to the camps’ inhabitants at no cost, there is considerable economic vitality within refugee camps [7,16]. However, in many countries’ contexts, legislation restricts refugees’ access to employment and business permits in refugee camps, and the development of business premises is rarely planned and designed properly inside the camps [4]. However, there are also exceptions, with refugee urban settlements and camps with planned and designed business premises, such as Al-Azraq in Jordan [33]; see also [34,35,36]. In addition, economic activities in camps are frequently subject to exceptional regulations that differ between countries and even between camps within a country. Although many employment opportunities and businesses inside the camps are legal—though ordinarily scarce—there also informal economies, including illegal “side businesses” through which counterfeit products or illegitimate services are sold as part of an uncooperative sociostructure of predatory capitalism (see [19]).
Scholarship on refugees’ economic activities inside camps is limited, and the results commonly derive from case studies, e.g., [1,7,19,37,38,39]. Therefore, comparisons between camps in general and various aspects of the camps in particular rarely receive attention. Furthermore, obvious differences exist between temporary refugee camps and those with a more permanent urban infrastructure. Although refugees cannot work inside most camps, in some, formal and informal job opportunities exist. Examples of refugees’ economic activities inside camps include agricultural production and processing of agricultural products (e.g., in Kyangwali refugee camp, Uganda; see [17,40]); carpentry workshops, vegetable stores, and related small-scale businesses (e.g., in the Palestinian Shufat camp in the West Bank; see [41]); food retail (in Kakuma, Kenya; see [7]); and up to more specific activities such as electronics repair workshops (e.g., in Dadaab, Kenya; see [42]). However, not every refugee has entrepreneurship experience and the related mindset or can be employed even in simple economic activities within the camps.
Based on their case study of Dadaab in Kenya, ref. [4] argued that RCE appeals to blind spots in humanitarian aid practices in camps. For example, RCE may result from the need to diversify the food and services provided by humanitarian aid organisations, thus responding to fellow refugees’ demands or following their personal preferences. In addition, RCE exploits institutional misalignment in aid provision (e.g., refugees’ being simultaneously vulnerable and in need of aid and protection, as well as entrepreneurial and focused on skills development and economic profits). Furthermore, RCE recombines the conducive aspects of formal and informal institutions and may benefit from a camp’s large, multinational population [7]. However, RCE is motivated not only (or even mostly) by individual refugees’ survival, but also by their desire to exercise choice, express autonomy and individuality, and reclaim economic agency and self-determination [4]; see also [43,44]. Some refugees endure living in the camps through RCE. In fact, hope is a dimension of RCE in terms of how individual refugees in camps formulate strategies to achieve goals (such as developing business concepts and strategies and gaining support) and operationalise individual capacities of coping with adversity and initiating, sustaining, and renewing motivation [45,46].
In addition, recent international aid policies have emphasised refugees’ responsibility, self-sufficiency, self-reliance, and independence, as is evident from the UNHCR and host countries’ policies. The UNHCR’s budget and material assistance for refugee camps have been reduced [47] (p. 2), and the priorities of international donors have changed [26]. Therefore, refugees in camps must increasingly become self-managed collectives responsible for their own costs and related management. This can even result in fee-based refugee camps, such as Buduburam Camp west of Accra, Ghana [26].
The developments in the 21st century have illustrated that refugee well-being has become an increasingly neoliberalised private affair, simultaneously connected to market economic processes and voluntary humanitarian donations [48]. For example, refugees are pushed into the labour market [49] to assume self-managerial responsibilities regardless of the challenges they face. As [25] (p. 111) observed regarding Palestinians in Jordan’s refugee camps, the camp refugees became “autonomous and productive subjects, as well as entrepreneurs and consumers” through administrative exceptions that the government initiated through regulations and the treatment of refugees in Jordan. Such “responsibilisation” (see [50,51]) changes refugees’ lives and can foster entrepreneurship among them.

3. Material and Methods

According to [52], approximately 30,000 refugees in Iran resided in 2017 in 20 GTs in various parts of the country (Figure 1). The average size of these GTs was small—up to a few square kilometres—and they hosted up to a few thousand Afghan refugees. Some GTs are precarious, with self-made constructions as their housing units. Others consist of simple modern low-scale buildings made of bricks. Over the decades, some physical renewal of the GTs has taken place, but this has not been substantial at all sites [31]. Nevertheless, most GTs look physically like small densely built urban settlements consisted of buildings, streets, and basic urban infrastructure (electricity wires, sewage network, etc.). Furthermore, inside the GTs are many activities like in small towns: housing, buildings for many kinds of administration purposes, schools, healthcare premises, shops and sites for recreation and worship.
The data for this article consist of surveys and interviews with Afghan refugees in the Bani Najjar (close to the south-western border with Iraq, in Khuzestan province), Bardsir and Rafsanjan (central Iran, in Kerman province), and Torbat-e-Jam (close to the north-eastern border with Afghanistan, in Razavi Khorasan province) GTs in Iran, as well as expert interviews with Iranian authorities who deal with refugee-related issues. To complement the survey and interviews, we also utilised on-site observations at these GTs. The observations as well as the survey and interviews with refugees took place in October 2017. The expert interviews took place between the autumn of 2017 and the spring of 2018. Mixed methods were employed in the quantitative and qualitative data collection and analysis—see [53]—and we interactively combine the results in the results section. We received official permission from the Iranian authorities to conduct our research in the GTs. However, we were unable to study the financial details of the businesses inside GTs as we might have in more open refugee camps, e.g., [7].
Based on the UNHCR’s statistics, in 2018, the Rafsanjan GT (5380 refugees) was the largest GT in Iran, and the remaining three, Torbat-e Jam (3911 refugees), Bardsir (3172 refugees), and Bani Najjar (1984 refugees), were among the main sites in Iran. Together, these sites’ total refugee population comprised about half (48%) of all Afghan refugees in GTs in Iran. This article’s authors conducted a survey in these four GTs (546 respondents in total) and performed 35 semi-structured interviews with Afghan refugees there. The survey respondents comprised 1.8% of all Afghan refugees in the GTs in Iran over 15 years old and 3.8% of such refugees in the four studied GTs.
It was important to use carefully planned sampling procedures to reflect the diversity of adult Afghan refugees in the study areas accurately. However, no detailed publicly available official demographic and socio-economic data exist for each GT. The sample’s representativeness in terms of gender and age can be compared with [9]’s data on all GTs in Iran. Sampling based on the educational and occupational status of respondents derives from talks with the refugees and refugee councils in the studied GTs and our field observations there. According to [9], among GT residents in Iran, 48% were women, and 52% were men. In our survey data, 52% of the respondents were men, and 48% were women. The same UNHCR data revealed that half (50%) of the GT residents were under-aged, 45% were 18–59 years old, and 5% were at least 60 years old. This means that, of the adult GT population, about 90% were 18–59 years old, and 10% were at least 60 years old. In our survey data, 29% were 19–29 years old, 40% were 30–49 years old, 12% were 50–64 years old, and 6% were at least 65 years old (Table 1).
The survey was conducted by a team in each location consisting of this article’s two authors and Iranian research assistants experienced in social scientific field research, as well as research assistants with an Afghan refugee background who were experienced in social scientific field research and knowledgeable about the situation in the camps. There were always female and male research assistants to ensure that field research complied with the participants’ cultural sensitivities.
The researchers approached Afghan refugees in the case study areas, explained the study’s purpose, received the participants’ consent, guaranteed their anonymity and confidentiality, and reminded them they could interrupt and terminate the survey or interview at any time. It was also mentioned that the main results would be published in Open Access reports, including a summary in Farsi (see [11]) and in peer-reviewed international academic articles.
The survey questionnaire was in Farsi, the language commonly spoken by Afghan refugees. The questionnaire contained a short explanation about its purpose and research ethics, as well as 79 questions, of which 50 were structured, 17 were semi-open, and 12 were open. The Iranian authorities were aware of the survey questions in advance and gave their permission to conduct the survey in these four GTs. The questions addressed the respondents’ backgrounds, travel to Iran, housing and employment issues, migration plans, use of ICTs (information and communication technologies), and broader life goals. The focus in this article was to use the refugee survey to study their employment activities. The completed survey sheets were collected immediately by the research team. Responses to the questions were entered into the database using SPSS software. Open questions were translated from Farsi into English by experienced research assistants who were supervised by one of the authors. The translated answers were coded in the NVivo program using theory-informed content analysis of the answers’ topics (e.g., employment, migration, social media use) with the coding. The SPSS database entries and data coding were performed by an experienced research assistant under the guidance of one author who had conducted and processed several similar surveys previously. The data were processed using descriptive statistical methods to measure central tendencies and dispersions among the respondents and multivariate frequency distributions of the studied variables with cross tables.
The interviews with 35 Afghan refugees focused on thematic issues such as employment experiences and practices, life goals, and connections outside the GTs. The focus in this article is to use the refugee interviews to study their entrepreneurship patterns and motivations. Most interviewed persons were economically active. The interviews were semi-structured, lasted between 15 and 30 min, and took place in participants’ workplaces or in public spaces of the GTs. In general, these interviews were one-on-one, but in some cases, employed family members or other refugees were present if the interviewees felt that it did not really matter, which was a cultural issue in the GTs. Farsi–English–Farsi simultaneous translation was employed during the interviews. The answers and quotations were written down during the interview. Later, they were inscribed and analysed via the NVivo program using theory-informed content analysis (again, focusing on the key topics). The analyses were conducted by an experienced research assistant under the guidance of one author.
In addition to the survey and interview data, this study drew on the daily field research observations that were noted alongside discussions, debriefings, and reflections. Besides these interviews, we met and talked with hundreds of Afghans in the GTs. In the end, we reviewed and reflected upon the results of the surveys, interviews, and observations interactively before writing the results.
Additional data comprise 12 interviews with Iranian administrative staff and experts in dealing with Afghan refugees in Iran conducted during autumn 2017 and spring 2018. The focus in this article was to use these interviews to study the viewpoints of authorities on the management and employment issues of GTs in Iran. The interviewees included the following: high-ranking central administration officials in Iran’s Ministry of the Interior (MOI), Ministry of Cooperatives, Labour, and Social Welfare (MCLSW), and the Bureau for Aliens and Foreign Immigrant Affairs (BAFIA); a representative of UNHCR in Iran; regional and local administrators such as heads of BAFIA regional offices, heads of districts or specific district committee, and mayors; GT managers; and GT council members. Of the interviewees, the GT council members were Afghans; the rest were Iranians. The interviews were not recorded but notes were taken during the interviews. The interviews were analysed using theory-driven content analysis.
Additional data were derived from five interviews conducted with the BAFIA administration and the head of the Directorate General for Employment of Expatriates; Ministry of CLSW; and the managers of the Bardsir, Rafsanjan, and Torbat-e Jam GTs. We conducted these interviews in April 2018 and February 2020 to learn about and follow up the situation in the GTs in terms of management and economic activities. New interviews were conducted with the BAFIA administration. Some of these interviews were conducted by telephone. Through these interviews, we learnt about the ongoing changes in governance and economic activities in the study areas.
We also made limited use of secondary source material regarding the GTs in Iran. The main reason for this limited use was the scarcity of reliable publicly available material about Afghan refugees in Iran’s GTs. In addition, no previous scientific studies have examined economic activities in these sites. We also used Iranian newspapers and reports from 2017 and 2018 about Afghan refugees in the GTs. However, no specific systematic scientific method was applied to this material’s analysis. Instead, this material provided additional insight into the topic.

4. Results

4.1. Organisation of Economic Activities in the GTs in Iran

Many displaced Afghans began to arrive in Iran at the end of 1970s, pushed by the war in Afghanistan and pulled by Iran’s welcoming policy following the Islamic Revolution. The Iranian government refrained from asking for major international assistance for Afghan refugees, unlike Pakistan, which also received many Afghan refugees (see [8,54]). Nevertheless, until the early 2000s, the needs of Afghan refugees in Iran in and out of the GTs were supported financially and otherwise by the Iranian government, with contributions from the UNHCR, international donors, and other NGOs.
In 2003, Iran’s MOI ratified a regulation for the new GT management system that required “Self-Organised Councils” (شورای خودگردان مهمانشهر) to be established to manage the GTs. For each GT, the central authorities would appoint an Iranian manager, and the GT’s broader management would be performed by a council of Afghan refugees: the chairman and the vice-chairman; the mayor; and committee members for construction, sanitary, cultural, and women’s issues. In principle, council members would be elected by the GTs’ inhabitants. In some GTs, the elections took place every fourth year, in others when the RT manager and the council intended to have changes in the council members. However, according to legislation, foreign nationals (including Afghan refugees) cannot vote in local, regional, or national elections or be elected to public office in Iran. Therefore, in principle, the legitimacy of the GT councils and their decisions could be challenged in the Iranian courts.
Over the years, the GTs became designated places of residence for tens of thousands of protracted refugees in Iran, almost all of them Afghans. The inhabitants of each GT could not permanently leave the GT without permission from the central authorities. In fact, they needed permission from the GT manager if they needed to travel to another county or province than that in which their GT was located. In addition, their specific place of residence inside each GT was determined by the GT authorities (i.e., usually by the refugee council). Besides housing and the GT management offices, the GTs received basic services such as schools, basic health care premises, and a place of worship. According to the new regulation of self-organised councils, the residents (e.g., Afghan refugees) would need to cover the operational running costs (e.g., cleaning, electricity, water, sewage, and management) for the GT in which they lived, see [55].
Each GT’s refugee council was designed to be the key mediator of economic activities. The councils provide and select sites for economic activities, decide and collect rent, and direct the financial contributions needed from GT inhabitants. This money is used to cover the GT’s basic services, such as water, electricity, and sewage. If the income generated from the GT and donations exceeds the obligatory costs, the council can provide more sites for businesses or improve the rather poor public infrastructure and space inside the GT. Therefore, GTs need their inhabitants for the basic maintenance of the site and to engage in economically profitable activities. As one of the interviewed GT council members declared, “We have to focus on job creation since guest cities are self-organised.” Although the councils might lack advanced business knowledge, they provide an institutional setting and rules for how economic activities are conducted in the GTs. This is very different to many large open refugee camps, which are characterised by an institutional vacuum in which refugees themselves create and manage informal business property markets and rent for fellow refugees, with premises of varying quality and changing rules and prices, see [42].
This change in the role of Afghan refugees in Iran’s GTs in the early 21st century occurred in international and national contexts related to the entry of neoliberalism, neoliberalisation, and entrepreneurialism into the policies and practices of national and local public authorities, the private sector, and individuals in the Western world, including those regarding refugees. At the same time, Iran also demanded that public sector services follow private sector principles, according to the new interpretation of the Constitution of Iran and its Article 44 [56,57,58]. Refugees were not exempt from these new requirements, under which they should become more entrepreneurial. This was fostered by the decrease in the financial support provided by the UNHCR and state donors to refugees who had been in Iran for many years. One aim was to reduce the growing financial burden created by refugees and refugee camps (see [26,47]). Around that period, international economic sanctions against Iran created additional challenges that interfered with international donors, NGOs, and other refugee-related actors’ ability to be present in Iran and continue their financial and material support for Afghan refugees, including those in the GTs [59] (p. 23).
The viewpoints of Iranian national authorities on Afghan refugees’ economic role in the GTs have similarities as well as differences. The MOI is a very important ministry that also plays a political role in Iran. Furthermore, BAFIA, the organisation responsible for the refugee issues in Iran, is supervised by the MOI. According to our interview data, the MOI and BAFIA are responsible for the organisation of Afghan refugees’ life in Iran, particularly from the political perspective. Therefore, although Afghans in general can play an economic role in Iran, Afghan refugees inside the GTs are vulnerable and must be supported with a subsistence economy. The interviewees believed that entrepreneurs and workshops inside the GTs cannot really pay taxes or duties because they do not have enough income and because some workshops and economic activities are supervised by tax-exempt charities.
On the other hand, the MCLSW and its Directorate General for Employment of Expatriates address broader economic welfare issues in Iran. According to them, all Afghans, including those in GTs, must contribute to Iran’s economy. This is made possible through the legalisation of Afghans’ economic activities and the promotion of their entrepreneurship in Iran. The MCLSW’s directorate head declared in our 2018 interview that Iran should specifically support talented and skilled Afghans and other residents with foreign backgrounds because they can benefit Iranian society substantially, whereas Afghan refugees are economically insignificant:
“…our policy is to keep their [talented Afghan workers and businesspersons’] money in Iran. If this group of Afghans leaves Iran, we will host [only] some non-skilled refugees in Iran; these are the same as refugees in the camps, who are mostly non-productive … Pakistan just started to expel the non-productive Afghan refugees who are living in the camps, and they [Pakistani authorities] only keep Afghans who have money and are highly skilled. … Iran can use Afghan investors to do business with Afghanistan.”
Although Iran’s 2003 policy change required Afghan refugees in the GTs to become economically self-sufficient, the authorities also facilitated this change. According to the interviewees, for instance, refugees living in the GTs do not need to acquire the work permission cards that other Afghans (including refugees) in Iran must possess. Furthermore, GT residents pay only limited duties. Economic activities in the GTs can be tax-exempt, and employers there do not need to pay for their employees’ pension, health, or accident insurance. Furthermore, charities can operate inside the GTs, such as two active charities that support the development of economic activities inside the Torbat-e Jam GT. However, such charities were not present in the GTs in Kerman and Khuzestan provinces.
Economic incentives in the GTs, such as tax exemptions, an inexpensive labour force, and low infrastructure costs, motivated Iranian entrepreneurs to locate their economic activities there. The vice chairman of the Torbat-e Jam GT council declared that the council members also facilitate the presence of the Iranian private sector in the GTs [60]. However, the BAFIA regulates Iranian enterprises’ access to GTs. Iranian businesses’ motivation to operate inside GTs also depends on the skills of their inhabitants, the sites’ geographical locations, and demand of produced items in Iran. Therefore, the potential (re)location of economic activities from outside to inside of a GT is based on enterprise’s cost-benefit analysis.
To support the self-reliance and empowerment of Afghans in GTs, international organisations such as the UNHCR, the Danish Refugee Council (DRC), and the Norwegian Refugee Council (NRC), in collaboration with the BAFIA and other Iranian authorities such as the MCLSW, provide vocational training courses in the GTs on various subjects such as farming and plant cultivation, tailoring, make up fashion and up to electric works and information technology and computer skills [55]. From March 2016 to March 2018, the UNHCR organised 36 courses in the four studied GTs, and 730 refugees attended those courses. The UNHCR in particular supports Afghan female refugees’ access to employment. Ref. [7] found in their case study of Kakuma refugee camp in Kenya that refugees’ business training in general creates better business practices and improves their business performance.

4.2. Employment and Entrepreneurial Activities in the GTs in Iran

The employment opportunities of Afghan refugees in Iran are institutionally regulated in many ways. Iran created restrictions by making reservations in Articles 17 (employment of refugees) and 26 (freedom of movement of refugees) in the 1951 Convention Relating to the Status of Refugees [10]. Therefore, Afghan refugees are permitted to work only within their areas of residence and in specific jobs. Furthermore, in 2003, the Government of Iran restricted where Afghans could live and work in Iran. For example, it prohibited Afghans’ presence in several provinces. The vast majority of Afghans continued to live in larger cities and other permitted areas, including the GTs. Furthermore, some Afghans were relocated to new GTs established in provinces that otherwise became NGAs for Afghans.
Iranian legislation also impedes Afghan refugees’ open employment opportunities. Foreign nationals, including Afghan refugees, cannot hold government jobs, buy or sell land, or conduct other activities requiring official registration with national identification cards or birth certificates [59] (p. 13–14). More recently (after the field study was concluded), foreign nationals (including Afghans) who have their own companies were permitted to buy or sell land, but individuals cannot. It is possible, though difficult in practice, for a refugee in Iran to be an independent business owner. In addition, in recent years, public health care and education have been extended to all Afghans in Iran, and Afghans are now allowed to open bank accounts. However, not all banks want to deal with them. A significant change (occurred after the field study ended) was that foreign nationals in Iran except for undocumented migrants can buy and possess SIM cards for mobile phones.

4.2.1. Employment and Entrepreneurial Activities

As discussed above, since 2003, governmental requirements and incentives have existed regarding Afghan refugees engaged in employment and economic activities in the GTs. This change also resulted in the need to engage in such activities to survive in the GTs. According to our survey data, in the autumn of 2017, fourteen years after this policy change, almost half (48%) of all Afghan refugee respondents in the four studied refugee GTs were employed. Thus, nationally, some 7000–8000 of the 30,000 Afghan refugees in the GTs are employed. A few respondents were employed simultaneously in various occupations, but many had only part-time, seasonal, or irregular jobs.
Regarding gender and employment, the GTs present many particularities. As evidenced by our survey, among Afghan male respondents, 64% were employed, as were fewer (30%) Afghan female respondents (Table 2). However, in Iran in general, substantially fewer (5%) adult foreign female nationals are employed, including female Afghan refugees (8%) in Iran outside the GTs [12].
In general, foreign female nationals, including Afghans, cannot register for permission to work in Iran unless they are heads of the household or have disabled husbands. Nevertheless, female inhabitants in GTs can be employed, and this is supported by the training courses provided by the UNHCR, as mentioned above. Some female respondents declared that they experienced fewer restrictions from their husbands regarding work inside the GT than they would have outside the GT. Many employed women considered it convenient to live very close to their workplaces, as they also needed to take care of cooking, parenting, and many other household activities. Therefore, being a female employed Afghan refugee does not necessarily result in a major emancipation, but serves more to fill the economic needs of the family and the GT. In fact, one GT manager claimed,
“Residents of the camp are highly eager to work inside the camp because they will pay less for transportation. Additionally, women can work inside the camp because, culturally, women do not want to work, or their husbands do not allow them to work outside the camp.”
Another group whose employment was rather rare was elderly people. Among Afghan refugee respondents in the GTs who were 65 years or older, 10% of men worked, and none of the women did. In contrast, those proportionally most engaged with work were male respondents, ages 30–49 years, of whom 94% worked (Table 2). Among the most common everyday activities of the respondents in the GTs, working (36% of respondents) was the second most common after housekeeping (39%), and the latter was expressed far more often by female respondents. Female employment in the GTs is a contextual cultural issue: in many large multinational refugee camps worldwide, many women work and can even be shopkeepers and business owners; see [7].
Employment types varied extensively among the respondents. Most employed Afghan (male) refugees from the GTs worked outside the GTs in rather simple, difficult, low-skilled jobs in construction, agriculture, or industry. This is also typical for Afghan men elsewhere in Iran [61,62,63]. As mentioned above, the law prohibits Afghans from performing public duties. However, they can work in privatised activities that previously belonged to the public authorities, such as rubbish collection and street cleaning. If the respondents were employed outside their GT, they were often employed in the nearby fields or towns. They had the GT manager’s permission to exit and enter the GT for work in these jobs, and many left at sunrise and returned slightly before sunset. Some worked further away and did not return to the GT every night. Respondents who had attended school for more years tended to have better employment. Besides education, former working experience also mattered when accessing employment and developing one’s career.
Among employed Afghan refugee respondents, 10% worked in enterprises, 21% were self-employed, 25% had mixed employment in enterprises and self-employment, and 44% had other types of employment. The relatively large share of self-employed respondents referred mostly to employment inside the GTs. In a study on Palestinian refugee camps, ref. [41] found that camp residents’ self-employment increased with the number of unpaid family members. In GTs, most economic activities related to the GT inhabitants’ everyday needs. There were refugee-run grocery stores for daily needs, bakeries that sold bread each day, butchers who provided halal meat, and shops that sold household maintenance items (see Section 4.2.2). Regarding groceries, usually one male refugee assisted by the family’s children ran a grocery shop. Ref. [7] found that 91% of shop owners in Kakuma refugee camp had only one shop. Furthermore, in the GTs, a variety of specialised shops and services existed, such as those selling and repairing electronics, mobile phones, furniture, and related practical items.
Besides small businesses, there were also a few specialised medium-sized enterprises inside the GTs. For example, a workshop that produced bags and souvenirs sold all its products outside the GT, even in Tehran. This workshop manager was a trained Afghan refugee with clear entrepreneurial strategies and practices partially intended to motivate individuals through their challenging everyday lives inside the GT. However, the goal of enterprise being economically profitable was also reached. The refugees employed in the workshop learned their jobs from this manager. Each worker was paid according to the quantity of products that met consistently high quality standards. Inside this GT, these jobs were appreciated because an employed refugee could earn several times more than in low-paying, simple jobs inside or outside the GT. The actual production premises were physically separate for men and women.
As mentioned above, certain Iranian businesses outsourced their economic activities and specific production chain phases to GTs in which the salary, infrastructure, and other costs were substantially lower than outside the GTs. Furthermore, in some cases, tax exemptions were also applied to the products originating from the GTs. These businesses included activities with international and national dimensions, such as the cleaning of saffron to be sold in Iran and abroad, as well as tailoring and clothing factories that sold their products in many parts of Iran. These enterprises also reacted to external demand. For example, in 2020, a private company that produced clothes in the Torbat-e Jam GT began producing COVID-19 facemasks that were later distributed in the province [64]. These larger enterprises employed tens or even more than one hundred employees, including very specialised professionals (e.g., in the weighing and grading of saffron). In relatively basic jobs, women were often employed, as were older women in the case of cleaning saffron.

4.2.2. Motivation and Modes of Being Entrepreneurial

Many small-scale shop owners inside the GTs initially became engaged with their businesses rather coincidentally without major entrepreneurial motivation, as our interviews with the Afghan refugees involved in business activities revealed. In the end, they usually managed to pay their running costs and earn a bit of extra income. Other small-scale entrepreneurs claimed that they wanted to spend their time doing something useful, but profit was not their key motivation; this is similar to the findings of [4] in their study of Kenya’s Dadaab refugee camp. In GTs, such learning-oriented Afghans included entrepreneurs who provided specialised services but who did not have formal education for these jobs. They had become experts through apprenticeships either inside or outside the GTs. Many were initially only interested enthusiasts who later converted their skills into a proper entrepreneurial activity. For example, one interviewed Afghan refugee became such a self-educated computer specialist that he was able to find a job in a nearby town and received permission to move there. Another Afghan photography enthusiast generated regional fame as a talented artistic photographer, so people outside the GT came to purchase services from him. For the refugees in these small-scale specialised shops, the growth of economic turnover and profit-making were not their main motivations. Some activities were more matters of social entrepreneurship than of business orientation.
However, there were also business- and profit-oriented entrepreneurs inside the GTs. Some increased their activities substantially by connecting their businesses to the outside world. Such businesses included a large tailoring workshop with more than 80 male and female workers that provided goods for retailers in large Iranian cities, a larger-scale animal husbandry operation that sold meat, and a specialised workshop that produced ostrich eggs and bred ostriches. The latter included many self-generated technical innovations. Nevertheless, for cultural reasons, these wealthier entrepreneurs could not display their wealth inside the GT or purchase anything very particular with it, but they continued to invest in the development of their businesses. In addition, some voluntarily donated a substantial part of their profits to improve the GT in which they lived. Such results suggest that there are location-specific particularities in RCE.
Particular niche business solutions were also invented. In one GT, the bakery sold products also to inhabitants living outside the GT—quite exceptionally in the Iranian context. The business logic was clear: the bakery received free flour from the donated food rations of Afghans in that GT (see [65]) and could thus sell the bread at a lower price than could bakeries elsewhere. A similar logic of utilising the humanitarian aid for entrepreneurial activities was found in the Dadaab refugee camp and, to a certain extent, in the Kakuma refugee camp, both in Kenya [4,7]. However, the amount of available cost-free flour was insufficient to expand this economically profitable business. From 2018 onward, instead of complimentary flour, the Afghan refugees in this GT received money as their external subsistence, so this entrepreneurial niche based on free ingredients no longer existed. External administrative regulations thus affect economic activities inside the GTs in various ways.
In general, the production chains inside and the outside the GTs were connected. Afghan refugee entrepreneurs acquired the “raw materials” such as meat, vegetables, technical goods, or tools from outside of the GT. Then these were processed inside the GT, and value was added to them. Finally, they were sold at a reasonable and competitive price that generated economic profit. Since Afghans were not allowed to own or drive cars in the autumn of 2017, Afghan refugees running businesses utilised the services of local Iranians as drivers, or local Iranians brought them the required items directly. Due to nationwide limitations, the use of the Internet and mobile phones to connect the GT businesses to the outside was rarer than in many refugee camps in other countries [4].
Entrepreneurship always includes risk-taking. Inside the GTs, the risk of starting entrepreneurial activities is low—a characteristic of RCE. In most cases, small shops had to register their activity only with the GT refugee council and the GT manager. As mentioned above, Afghan refugee entrepreneurs do not pay taxes, only cash is used in the GT (though some respondents had bank accounts), and there is no real need for detailed accounting. Each entrepreneur must pay monthly rent for the premises inside the GT. These rents, decided by the refugee council, were kept quite modest to facilitate economic activity. In one GT, some businesses were exempt from rent or paid lower than usual rent to support their businesses in the early stages. In GTs, refugee entrepreneurs could also terminate their leases quickly and without additional costs if the activity turned out to be unsuccessful. This differs from many entrepreneurial activities in refugee camps elsewhere in the world, which require substantial start-up capital, as evidenced by [7]. For most refugee entrepreneurs in GTs, it was not difficult to cover rental costs: this required adding only a little extra to the prices of items or services.
GTs lacked the fierce local competition that is characteristic of larger refugee camps and refugee urban settlements open to the external economy. Some specialised shops were clustered (usually organically without major planning) along one courtyard or street, or they were scattered around the GT. Often, only a few small shops provided necessary everyday services for the whole GT. The grocers (who usually provided more or less the same items) were located in different parts of the GT to provide convenient access to the nearby refugee households. Similarly, as in the case of Kakuma refugee camp in Kenya (see [7]), there was little pricing variation, and it was not systematic.

5. Conclusions

Afghan refugees in Iran are a globally significant group in the international protection context due to the large number of refugees (one million) and their prolonged stay in Iran. Around 30,000 Afghan refugees, some already of the fourth generation, live in the GTs, small urban settlements meant for refugees in various parts of the country. Iranian authorities perceive these Afghans either as poor people who are dependent on external humanitarian aid or as economic potential to be utilised in Iran. Such viewpoints are similar in the Western world which perceives refugees as a burden or economic opportunity—see [7,16].
Since 2003, GTs have needed to be financially self-managed by their refugee inhabitants to cover the main costs of basic maintenance and management. This need followed a change in the national policy and was also connected to the privatisation and gradual withdrawal of the Iranian public bodies from certain public duties. In addition, international donors and NGOs diminished their support for the GTs, indicating the particularities and peculiarities behind refugee-related neoliberalism. As a result, the management of GTs became more institutional with an appointed manager, an elected council and specific responsible individuals in the management and development of GTs in various economic and social fields. Furthermore, an increasing number of Afghan refugees in the GTs had to become employed and entrepreneurial. In other words, they had to produce goods and services to obtain economic profits for the managerial, maintenance and development costs of the GT in which they lived. Each GT’s refugee council became an important mediator of economic activities that, in the end, were regulated by the national authorities and their representatives in provinces in Iran.
The motivation and necessity generated by the GTs’ self-management led into the increase in, diversification, and profit orientation of Afghan refugees’ economic activities in GTs. As found in earlier studies, economic profit-making in GTs is not always the principal motivation in RCE. Instead, many refugee entrepreneurs want to express their agency through and provide hope for a better future and a more meaningful existence in the GT. As mentioned, the GT residents are not free to leave their GT to reside elsewhere in Iran, so it is thus very important to make one’s life meaningful in this small urban settlement. The GT management has much to offer in this. Another similarity is that for larger-scale economic activities, the GT (in which entrepreneurs and other refugees are employed) must be connected to the outside world despite the inhabitants needing to live inside the GT. Therefore, the GT management needs to consider these external connections as sources of positive contributions to the development of GTs. At the same time, the national authorities need to tolerate and support the economic activities and entrepreneurship of Afghan refugees in the GTs while recognizing also that not all GT inhabitants can become entrepreneurial. In particular, gender and age-related issues need to be recognised while promoting the economic activities of the GTs.
RCE in Iran has similarities and differences with the cases in other countries. The case of GTs in Iran illustrates particular intersections between the Iranian state and international regulation, formal and informal economy and national and international economies that shape the economic lives of Afghan refugees in the GTs and their interaction with markets. The particular international context of Iran and specificities in the positions of Afghans in Iran create a distinctive regulatory environment with different legal frameworks shaping the lives of Afghans refugees in the GTs. Nevertheless, as evidenced above, some Afghan refugees transform these institutional challenges and market distortions into opportunities. In all, the case of GTs in Iran is in many contextual aspects quite different compared with many cases of refugee urban settlements around the world, and regional variations exist within Iran regarding how GTs operate economically and how entrepreneurialism develops inside each GT. There is a need to pay careful attention to the contexts before generalization on GTs in Iran and RCE more generally.
From a research perspective, a crucial aspect is to have access to data that are usually challenging in all cases of refugee urban settlements and camps, including that of Iran. Mixed methods that combine quantitative and qualitative data collection and analysis are useful, but they require access to these settlements, engagement by their refugee inhabitants and key stakeholders, and careful consideration of research ethics to avoid exposing these settlements and RCE in them in such a way that it becomes negative for the refugees themselves. There is a need for comparative studies around the world to recognise the diversity of refugee urban settlements and RCE in them. Such a longitudinal comparative perspective with the use of quantitative data is rare in the analysis of refugee entrepreneurialism [66]. Furthermore, as [5] indicates, besides a narrow economic perspective, social aspects should also to be taken into consideration in the refugee self-reliance and governance issues and programs beyond narrow market-based and individual solutions. Contextually sensitive approaches and understanding are necessary to shed light on urbanised refugee camps and refugee urban settlements that are specific features of contemporary urbanization and urban economy, and are still often overlooked in urban studies.

Author Contributions

Both authors participated equally to the conception of the work, acquisition, analysis and interpretation of data, and the writing of the article. Both authors have read and agreed to the published version of the manuscript.

Funding

This research received external funding from the Strategic Research Council at the Academy of Finland under Grant number 303617.

Acknowledgments

This is work was supported by the Strategic Research Council at the Academy of Finland under Grant number 303617.

Conflicts of Interest

The authors report no conflict of interest.

Ethics Statement

This work follows the guidelines of the Finnish National Board on Research Integrity. The original survey and interview data cannot be made directly available to readers due to the respondents’ rights and sensitivity issues.

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Figure 1. Guest towns in Iran. The case study areas are Bani Najjar (3), Bardsir (4), Rafsanjan (11), and Torbat-e-Jam (18) GT. Source: Adapted from [52].
Figure 1. Guest towns in Iran. The case study areas are Bani Najjar (3), Bardsir (4), Rafsanjan (11), and Torbat-e-Jam (18) GT. Source: Adapted from [52].
Urbansci 04 00051 g001
Table 1. Afghan refugee respondents’ demographic background (%).
Table 1. Afghan refugee respondents’ demographic background (%).
MaleFemaleAllN
15–18 years16111372
19–29 years243429157
30–49 years354440217
50–64 years1691266
65+ years92631
Total100100100543
Table 2. Afghan refugee respondents’ employment in the GTs in Iran (%).
Table 2. Afghan refugee respondents’ employment in the GTs in Iran (%).
EmployedNot Employed
MaleFemaleAllMaleFemaleAllN
15–18 years55113645896468
19–29 years823751186349157
30–49 years94345566645217
50–64 years81165319844766
65+ years15010851009031
Total753048257052539
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Jauhiainen, J.S.; Eyvazlu, D. Entrepreneurialism through Self-Management in Afghan Guest Towns in Iran. Urban Sci. 2020, 4, 51. https://0-doi-org.brum.beds.ac.uk/10.3390/urbansci4040051

AMA Style

Jauhiainen JS, Eyvazlu D. Entrepreneurialism through Self-Management in Afghan Guest Towns in Iran. Urban Science. 2020; 4(4):51. https://0-doi-org.brum.beds.ac.uk/10.3390/urbansci4040051

Chicago/Turabian Style

Jauhiainen, Jussi S., and Davood Eyvazlu. 2020. "Entrepreneurialism through Self-Management in Afghan Guest Towns in Iran" Urban Science 4, no. 4: 51. https://0-doi-org.brum.beds.ac.uk/10.3390/urbansci4040051

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