More and more private sector leaders recognise that business can’t survive in a failing world, as demonstrated by the sessions devoted to humanitarian issues at the annual World Economic Forum in Davos last week. Eight hundred million people live in unstable environments where they are left vulnerable to poverty, food insecurity, conflict, and other upheavals – often for years.
Humanitarians, meanwhile, recognise that their ability to respond is at risk because traditional donor funding is not keeping up with changing needs. The statistics are always sobering: UN requests to fund emergency and other aid needs have risen continuously over the last three years, to more than $25 billion for 2018. Yet donations, largely by governments, fell short in recent years to the tune of more than $10 billion.
So how to translate well-intentioned talk in Davos and elsewhere into action? A start, say Peter Maurer, president of the ICRC, and Tara Nathan, executive vice president, humanitarian & development at Mastercard, is to look beyond emergency situations, to economically and politically fragile environments. Then tap the private sector and other stakeholders to help people rebuild sustainable livelihoods and basic services, with the goal of preventing or speeding up recovery from humanitarian crises.
Maurer and Nathan have spent time thinking about that approach, both at Davos and as the leads of a group of professionals from diverse fields who are examining the issue as part of a World Economic Forum initiative. Below, they share some of their ideas.
How do you define 'humanitarianism' and the role of humanitarians?
Maurer: The traditional notion of urgent humanitarian relief no longer matches the reality on the ground. The average length of time the ICRC has been present in the countries hosting its 10 largest operations is more than 36 years. In these contexts that remain fragile, void of development activity and international interest, it is not feasible to implement responses on an emergency aid model for such protracted periods of time. The size and scale of long-term conflicts and situations of fragility compels the design and implementation of new, more sustainable multi-stakeholder approaches to humanitarian action.
Nathan: We are all humanitarians. There is a shortfall of funding for humanitarian response, and the needs vastly outstrip the capacity to respond. There seems to be merit in enabling the humanitarians to focus on life-saving aid and engaging other partners to help fill longer term needs. We all care about humanity, we all want people to move from poverty to prosperity.
How should the private and humanitarian sectors work together?
Maurer: Each year, I travel to the most fragile contexts around the world, places suffering the devastating impacts of war and cycles of violence. In these emergency settings, many people assume that aid handouts are the only way to provide support because social services and economies have broken down. Yet when I speak to people affected, they so often tell me that what they most want is to be able to continue working, build their business, access finance, and provide for their families. As humanitarians, we need to do a thorough economic analysis and understand the potential to connect people to economic opportunities.
Nathan: Aid organisations must do more with less, and the private sector needs to play a greater role. But it can’t be through traditional models of corporate philanthropy – those models cannot scale. Instead, we should seek new models of deep partnership where the private sector can leverage commercial approaches, and where they can work hand in hand with humanitarians and donors to test and scale those approaches. We need to create the tactical, legal, operational, and commercial constructs that incentivise private sector actors to engage.
What needs to change?
Maurer: Humanitarian actors will always be needed to provide emergency basic services in acute crises. In situations of protracted conflict or fragility, however, we need to find sustainable models for income generation. Communities inevitably restart economic activity, but their livelihoods remain precarious and without much support from the development community due to ongoing security risks. These are the situations where investment in livelihoods can have crucial impact, not only on individuals’ stability and sense of hope, but also flow-on effects on wider social and economic resilience.
Nathan: We fundamentally need to change the way the private and public sectors partner and deliver solutions. And – perhaps most crucially – we need to overcome the misconceptions and suspicion between the sectors and build trust.
How can the private sector help prevent or shorten humanitarian crises?
Nathan: The private sector has pivotal assets – technologies, expertise, and unique service delivery models – that can move the needle in humanitarian response. Taking a market-based approach can be a real force for good. Through support to local markets we can: prevent the market instability that often causes political instability; build resilience of vulnerable communities; and spur the recovery of communities after crises. Failing to recognise the capabilities of the private sector is actually a disservice to the beneficiaries we all seek to serve.
Maurer: Whether by starting new businesses, using digital technology to connect to remittance flows, or creating social units to reinforce community protection and security, affected communities are the true first responders to crisis. We need to explore how to support, enable, and scale inclusive local markets, employment, and business opportunities in fragile contexts. And we need to find ways to collaborate with others who can help to accelerate large-scale capital investment and to leverage digital solutions for humanitarian gains.
What market-driven approaches are already in use?
Maurer: A range of interventions already exists, including coordination platforms to connect farmers to value chains and market infrastructure, digital tools to facilitate access to financial products, capacity-building to increase production, entrepreneurship training, guidance for job-seekers in displaced populations, and more.
Nathan: Cash-based assistance is a critical tool to generate needed efficiencies in the sector and empower affected populations by giving them choice. But it’s a first step. The Mastercard Aid Network, for example, offers an offline, digital voucher system that allows an individual to purchase goods – food, water, household items – from local businesses in a fragile context. By channeling response to local merchants, and by using a digital technology to deliver those vouchers, the programme supports more efficient, effective, and transparent delivery of aid.
A solution like this one can bridge the humanitarian and development divide. If this beneficiary is in a rural farming community, she can use the platform to receive vouchers for agriculture subsidies to rebuild her farm and livelihood. The technology can ultimately connect her to a market of agriculture buyers, bringing price transparency and cutting out the middle men, thereby allowing her to grow her income.