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The Impact of COVID-19 on the Economic Inclusion of Venezuelans in Colombia

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Political unrest, economic and institutional collapse, violence, and human rights abuses in Venezuela are prompting millions of Venezuelans to flee their home country, causing one of the largest displacements in the history of Latin America. Colombia is by far the largest destination country for displaced Venezuelans, hosting almost 1.8 million as of May 2020. Since the beginning of the crisis in Venezuela, the Colombian government has maintained an open and constructive response towards the arrival of displaced Venezuelans. Prior to COVID-19, Colombia kept its borders open to Venezuelans, issued residence and work permits to over 700,000 individuals, and developed comprehensive inter-agency strategies for coordinating their response, which included providing humanitarian relief, and facilitating income generation for Venezuelans and host communities.

Despite this positive response, Venezuelans in Colombia have faced many obstacles to economic inclusion—defined as the achievement of labor income commensurate with one’s skills and decent work—both before and during the pandemic. Barriers to economic inclusion for Venezuelans in Colombia include a lack of legal access to the formal labor market, a lack of access to financial services, discrimination in hiring and in the workplace, a lack of information among employers about whether they can hire Venezuelans, and a high concentration of Venezuelans in areas with relatively few job opportunities. Consequently, Venezuelans in Colombia typically earn less than their Colombian peers and face high rates of poverty, widespread threats of eviction, and food insecurity.

The outbreak of COVID-19 has only compounded these challenges. As a result of the country’s economic lockdown and quarantine, Colombia’s GDP is predicted to fall by almost 8 percent this year, leading the country into its first recession in two decades. This economic slowdown is having severe effects on the Colombian labor market, with the unemployment rate reaching 19.8 percent in June 2020. As a result, Venezuelans have been pushed into an increased state of economic precarity, particularly because they are more likely than Colombians to work in sectors that have been highly impacted by the pandemic.

This policy paper is part of the Let Them Work initiative, co-led by the Center for Global Development (CGD) and Refugees International (RI). It summarizes many of the ideas from an accompanying case study that details the benefits of, and recommendations to achieve, greater economic inclusion for Venezuelans in Colombia. Furthermore, this piece explores the dynamics of greater economic inclusion in the context of COVID-19, discussing the impact of the pandemic on the Colombian economy and Venezuelans within the country. It describes the status of economic inclusion for Venezuelans in Colombia; highlights the benefits of greater economic inclusion in the context of COVID-19, and provides recommendations for government, donors, international organizations, and NGOs to simultaneously improve economic inclusion and COVID-19 response.