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The humanitarian economy – fair or foul?

13 October 20150 comments

The amount of money spent on humanitarian efforts across the globe has soared to around $24.5 billion a year, reflecting the number of ongoing conflicts and enduring humanitarian crises in many parts of the world.

This represents more than a ten-fold increase in the past 14 years.

Governments account for three quarters of the cash donated – around US$18.7 billion – a rise of 24% from 2012.

Private sources provided an estimated US$5.8 billion – up from $5.4 billion in 2013.

Despite this record level of spending, more than a third of the estimated need for humanitarian assistance was unmet with just 62% of UN-coordinated appeals for assistance meeting targets.

Almost four fifths of humanitarian spending from OECD donors went to helping the victims of protracted emergencies and most long-term assistance was spent in countries with high levels of poverty and low levels of government spending, according to the Global Humanitarian Assistance (GHA) Report 2015.

The top five national donors were the US with US$6 billion, the UK with US$2.3 billion, Germany US$1.2 billion, Sweden US$933 million and Japan US$882 million.

All of 2013’s ten largest donor governments gave more in 2014, and many gave their largest contributions of the decade. While many of these were the same as in previous years, Saudi Arabia joined the group of the largest contributors.

Private contributions rose by an estimated 8% – less steeply than contributions from governments. This assistance from individuals, companies, corporations, and trusts and foundations accounted for around one-quarter of international humanitarian assistance last year.

Tending to favour disaster over conflict response, private donors as a group were the largest international humanitarian contributor to the Typhoon Haiyan response in 2013 and the third largest to the Ebola response in 2014, according to UN Office for the Coordination of Humanitarian Affairs (OCHA)’s Financial Tracking Service (FTS).

The largest recipients of assistance were Syria, occupied Palestinian territory, Sudan, South Sudan and Jordan.

Another US$504 billion was spent in areas affected by humanitarian crises through domestic government expenditure, remittances, peacekeeping and development assistance but it is unclear how much of this cash went to help victims of the crises, said the report, which is produced by GHA and funded by the foreign affairs departments of Canada, the Netherlands, Sweden and the UK.

The GHA report says both conflict and catastrophe are behind the rise in the need for humanitarian assistance.

“Compared with in 2013, 10.7 million more people worldwide were affected by disasters caused by natural hazards,” the report said.

“Driven by the conflicts in Syria and Iraq, there are now more displaced people in the Middle East region than in Africa, and more displaced people in middle income countries (MICs) than in low income countries (LICs).

“This means a shift in planning and resourcing for response and resilience – the roles of refugee-hosting governments, notably Turkey, and of Gulf donors are central to the humanitarian financing effort,” it said.

In 2014, US$12 billion of international humanitarian assistance went to meet requirements from UN agencies, non-governmental organisations (NGOs) and other responders, set out in UN-coordinated appeals. While this was an unprecedented level of support, it was not sufficient to meet the record request of US$19.5 billion.

The unmet requirements of US$7.5 billion (38%) were also the highest to date.

The report found that there was wide recognition that international humanitarian assistance alone is neither sufficient nor appropriate to address the scale and complexity of today’s crises, or the underlying drivers of instability, poverty and vulnerability. Countries at high risk of crisis are home to most of the world’s poorest people.

It found 93% of people living in extreme poverty are in countries that are either politically fragile, environmentally vulnerable or both.

But some observers criticise the organisational arrangements of the ‘humanitarian economy’ saying it is dominated by a few major donors and a handful of giant agencies, such as the Red Cross, Oxfam and Medecins Sans Frontieres.

Critics say it is resistant to change, diversity, competition and the inclusion of locally-based charities.

“Conventional emergency aid money flows overwhelmingly through UN agencies and big western-based charities like the Red Cross – only a tiny fraction is supplied to frontline agencies inside the affected countries,” said Ali Imban of Kenya-based African Development Solutions.

“The big agencies sub-contract local agencies but each take overhead and project management costs from the pool of cash,” he said.

Not-for -profit media organisation IRIN analysed the level of equality in the humanitarian sector using the Gini coefficient – a widely used measure where 0 denotes an equitable economy where everyone has the same amount of money and 100 denotes wealth in the hands of just one person.

“The Gini coefficient for the ‘humanitarian economy’ is about 95, showing a very high degree of market concentration,” then IRIN analysis said.

“Is that something that promotes innovation? I think most people would say that in all other circumstances in life, that doesn’t sound like a very healthy system,” said IRIN analyst Nils Carstensen.
Laurie Nowell
AMES Australia Senior Journalist