Years after large numbers of Rohingya refugees began seeking protection in Bangladesh in 2017, the Rohingya crisis has transitioned from an acute emergency into a deeply entrenched Protracted Refugee Situation (PRS). With more than one million stateless refugees now living in Cox’s Bazar, Bangladesh, long-term displacement has generated consequences that extend far beyond immediate humanitarian needs - affecting both the Rohingya refugees and Bangladeshi host communities.
Economic and employment challenges
The economic landscape of Cox's Bazar has been fundamentally reshaped by the crisis. Restriction from the Bangladeshi government on formal employment for Rohingya refugees means that they are now almost entirely dependent on humanitarian aid to survive. Physical and legal barriers, such as restrictions on movement and bans on opening bank accounts or purchasing SIM cards, further limit their economic agency and capacity to participate in the official economy.
These limitations have fueled a fragile informal economy. An estimated one-third of refugee households are thought to be involved in unofficial sources of income, with jobs ranging from operating small businesses and providing services in the camps to working as day labourers in nearby areas, typically for well below local wages. This precarious situation leaves refugees extremely vulnerable to exploitation and economic instability as they rely on a small and undocumented market and are provided no job protection.
Meanwhile, the economic system within and surrounding the camps relies on foreign humanitarian assistance, a source that is becoming increasingly uncertain. The ongoing crisis, coupled with shifting global priorities and donor fatigue, has led to significant and recurring funding shortfalls for the annual Joint Response Plan (JRP), threatening both humanitarian operations and livelihoods.
The impact on host communities
The crisis has impacted the host community in different ways: those in conventional, labour-intensive sectors have been forced into poverty, exacerbating pre-existing disparities, while certain other members of the community have benefited economically from the situation.
Huge amounts of data indicate that the socioeconomic status of a sizable portion of the local population, already among Bangladesh's poorest, has significantly declined. Competition from a large refugee workforce willing to accept lower wages has depressed the local labour market and displaced Bangladeshi workers. Traditional livelihoods have likewise been impacted negatively. For instance, a fishing ban on the Naf River, implemented for security reasons, has reportedly left 30,000-35,000 local fishermen unemployed.
At the same time, the massive international humanitarian response has injected hundreds of millions of dollars into the local economy, creating new opportunities for a different segment of the host community.
A thriving, albeit localised, “humanitarian economy" has emerged because of the influx of relief workers, which has increased demand for housing, transportation, and other services. Many educated young people in the area have also found employment with UN agencies and NGOs, although tensions have increased since many assistant positions are filled by people from outside Cox’s Bazar.
Vulnerability and repatriation uncertainty
The long-term cohabitation of more than a million refugees with the local populace has strained the region’s sociocultural fabric, disrupting established norms and governance structures.
Inside the camps, new, frequently disputed governance structures have taken root. The Majhi structure, in which Bangladeshi authorities designate community leaders to serve as intermediaries, is the main system. Although crucial for management and information sharing, the Majhis' legitimacy is questioned frequently by the community. The lack of transparency in their selection and the absence of community consultation has led to mistrust among refugees, who view leadership as not truly representing their interests.
Gender norms have also undergone noticeable changes. In Myanmar, as a result of social standards, Rohingya women and girls were traditionally restricted to the home. In the camps, however, women’s mobility and participation in economic and social activities have expanded -driven by necessity and humanitarian programmes that target women for volunteer stipends and skill training. Although some people may find this empowering, there have been reports of greater family conflict when conventional patriarchal institutions are questioned, which has led to tension within homes and the community.
Security threats
Security within the camps has also diminished, with camps now fertile ground for organised crime and armed groups. The Arakan Rohingya Salvation Army (ARSA) and the Rohingya Solidarity Organisation (RSO) are reportedly engaged in violent turf wars, extortion, and forced recruitment, creating a pervasive climate of fear for refugees. These conflicts frequently spill over into adjacent host communities, which increasingly view the camps as a significant security threat.
The region has also transformed into a major hub for narcotics trafficking, particularly of methamphetamine (yaba) from Myanmar, as well as human trafficking and other illicit activities, further corroding social stability and safety for both communities.
The search for a solution
Through my years of research into the repatriation and geopolitics of Rohingya refugees, I’ve sought to understand the multifaceted impact of the ongoing situation in Cox Bazar. While no single solution can resolve such a complex situation, a multi-stakeholder approach, led by the Government of Bangladesh and supported by UN agencies, donor governments, and NGOs, offers the most viable route forward. Bridging the humanitarian–development nexus by creating integrated, conflict-sensitive initiatives that deliver benefits for both refugees and hosts will aid the ground crisis while repatriation is considered.
Dr Mohammad Tarikul Islam, Visiting Academic, Centre on Migration, Policy and Society (COMPAS), University of Oxford and Professor in Government and Politics, Jahangirnagar University, Bangladesh. Professor Islam has also held different prestigious positions at Oxford, Harvard, Cambridge and SOAS.
