Rise in disasters, displacements changing the face of humanitarian finance

Today, nearly 60 million people around the world have been forcibly displaced due to conflicts and disasters — more than in any other time in the post-World War II era. And this is changing the face of global humanitarian financing. Conflict in Syria and Iraq, climate-related disasters in Asia-Pacific, and the Ebola outbreak in West Africa pushed the international humanitarian response 19.5 percent from $20.5 billion in 2013 to $24.5 billion in 2014, according to Development Initiatives’ 2015 Global Humanitarian Assistance report. This “rising scale and changing nature of needs” pushed humanitarian aid to “another record high.” “The increase in international humanitarian assistance [over the past years] was largely due to [these issues],” Sophia Swithern, the U.K.-based organization’s global humanitarian assistance program leader, told Devex. “Donors will need to find ways to balance the demands of protracted and escalating displaced populations with new major rapid onset emergencies.” While parts of Asia have been consistently considered as the most vulnerable to natural hazards over the past decade, the “geographic and economic context of forced displacement is shifting.” In 2014, GHA said around 10.7 million people around the world have been newly affected by these events, pushing the need for greater humanitarian aid. To address this change of the demand for international humanitarian finance, Swithern said governments and development stakeholders need to recognize that 88 percent of displaced people live in developing countries, many of which do not have the capacity to raise, deliver and monitor humanitarian finance. Enabling these governments provide better development and humanitarian solutions in a sustainable way would be a good starting point. “[Development stakeholders], including the private sector, have an increasing imperative to work together to find solutions that are viable in the medium to long-term,” she explained. The other key challenge, she added, “are disasters caused by natural hazards.” This only underlines the “need to better invest in DRR to limit the impact on people and the need for international assistance.” Government contributions Of the $24.5 billion humanitarian finance disbursed internationally last year, 76 percent — or $18.7 billion — came from government contributions. The amount from national coffers earmarked for humanitarian aid in 2014 grew 23.8 percent from $15.1 billion the year before. As expected, donors from the Development Assistance Committee of the Organization for Economic Cooperation and Development provided the bulk of government contributions, comprising almost 90 percent of the total with $16.8 billion — up 17.5 percent from the $14.3 billion in 2013. It should be noted that the increase comes amid aid austerity measures implemented by many donor governments. The rise of government contributions has also been due to the tremendous growth of humanitarian aid from countries outside of the OECD-DAC grouping. Contributions from these emerging donors grew by a staggering 137.5 percent from $800 million in 2013 to $1.9 billion in 2014; donors from Gulf states, including Saudi Arabia, accounted for 89.5 percent of the total. “The rise of the Gulf donors has been notable. … This has largely been driven by the responses to the crises in Syria and Iraq. As they rise in importance, there is increasing dialogue about their role in humanitarian action,” Swithern said. “These channels of dialogue need to continue to ensure that there is increased predictability and complementarity of donorship from diverse sources.” The United States meanwhile has been the top source of government contributions, accounting for 33 percent of payouts over the past decade. In 2014, U.S. government contributions rose by $1.2 billion from the previous year to reach $6 billion. The U.S. is followed by the United Kingdom and Germany with $2.3 billion and $1.2 billion, respectively. Private contributions, recipients, channels of delivery Contributions from private companies, organizations and individuals to the international humanitarian cause increased 7.4 percent from $5.4 billion in 2013 to $5.8 billion in 2014 — underlining the increasing involvement of businesses and philanthropy in humanitarian finance. But while contributions from the private sector have been increasing, these tend to “favor disaster over conflict response.” This can be seen during the Typhoon Haiyan operations in the Philippines and the Ebola response in West Africa, where they became the “largest international humanitarian contributor.” While there are differing reasons behind the slant toward disaster response, appropriating money in conflict situations could open the private sector to accusations that it is partial to one side or a supporter of one part of the conflict. Some of the largest recipients of international humanitarian aid over the past years include Syria and the Palestinian territories, where $1.9 billion and $793 million have been earmarked, respectively. In terms of humanitarian aid delivery mechanisms, multilateral organizations like the United Nations are still the go-to channels. Nearly two-thirds of humanitarian assistance in 2013 — or $9.3 billion — were coursed through multilateral channels; nongovernmental organizations were a far second, disbursing 19 percent or $3 billion. “The solutions lie within and beyond humanitarian financing. Within humanitarian finance, there is a need for more funding from diverse sources but also more efficient and effective means of delivery,” Swithern concluded. “Beyond, there is the need to mobilize other sources of finance.” Check out more funding trends analyses online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.