Why was 2023 such a bad year for humanitarian aid spending?

Earlier this week, United Nations Secretary-General António Guterres took to the stage to beg donors for more help to address humanitarian crises around the world. “We cannot continue doing more with less,” he said. “We cannot turn our backs on human suffering.” Guterres’ words came at the launch of the Global Humanitarian Overview 2024, a report released annually by the U.N. Office for the Coordination of Humanitarian Affairs, or UNOCHA. The report chronicles a miserable 2023, which Guterres called “the worst funding shortfall for humanitarian operations in years.” So why has the humanitarian sector found itself in such a difficult situation? The size of the shortfall The report shows that at the time it was written, donors had provided $19.9 billion out of $56.7 billion needed to meet the U.N.’s plans — only 35% of the funding required to meet humanitarian needs in 2023. The data comes with some caveats. For one, significant additional funding is provided for humanitarian needs outside official U.N. appeals. And for another, those figures do not go up until the end of the year, so the final numbers will rise; the situation has marginally improved since the report was published, and it looks likely that U.N appeals will end the year around 40% funded. However, this data serves as a good bellwether for the overall state of the sector. And it shows that, by several metrics, this is comfortably the worst year on record for humanitarian funding. In cash terms, this year’s shortfall is the largest ever by a very significant margin. The largest ever previously was last year — $21.6 billion. Whether this is the worst percentage shortfall ever is not as easy to assess. But UNOCHA provides figures on its website for the past eight years, and they show that collectively, U.N. appeals are typically between 50% and 64% funded in any given year, so this year is a significant outlier on that basis, too. How much has the need increased? It is worth placing this in another context, however. More was actually spent in 2023 on humanitarian aid than in any previous year except 2022. Funding has increased, it has just not kept pace with need. The amount of spending required to meet humanitarian needs has more than doubled since 2016, even if adjusted for inflation, and the number of people needing support has increased even more. The most recent report classifies 299.4 million people as in need of humanitarian assistance at the end of 2023, compared to 128.6 million people at the end of 2016. The increase in need arises from several causes. First, the COVID-19 pandemic caused massive damage to economies and led to a spike in emerging market debt. There has also been a growth in the number of worldwide conflicts — including the war in Ukraine — which led to an increase in food, fuel, and fertilizer prices, creating inflation and driving up interest rates. This made the newly acquired debt far more expensive and produced a basket of economic factors that seemed custom-designed to increase instability. And climate change has exacerbated other problems; climate-related disasters are now almost three times as common as a decade ago, UNOCHA said. Why did funding fall compared to last year? Funding was down across multiple humanitarian response plans in 2023. Only two plans were more than 50% funded — Ukraine, and an existing plan for the occupied Palestinian territories, which predated the latest war. But even Ukraine saw a significant fall in funding, from $3.1 billion in 2022 to $2.2 billion in 2023. The difference comes down to a handful of factors. One is that the U.N. asked for a lot more than it ever had before — an additional $5.1 billion — in 2023. And it has asked for more for several years in a row. This is an increasingly tough ask. Humanitarian aid is particularly dependent on a single donor, — the United States — which in 2022 funded almost half of all humanitarian aid globally. Last year, with broad support in the U.S. Congress for a generous aid package to Ukraine, as well as other post-pandemic measures, the U.S. spent $14.4 billion in support of U.N. plans, as opposed to $9.5 billion so far this year. This year, a $110 billion aid package is currently held up in Congress. Although much or most of that is military rather than humanitarian support, this is emblematic of the problems delivering aid in the current political setup. However, the problem is not limited to the United States. The next largest donor, Germany, also reduced aid by a little over $1.3 billion, and other European donors also cut funding. Will it continue to get worse? There are some signs that the worldwide humanitarian crisis may have peaked, with the number of people in need dropping from 363 million this year. Total funding required for 2024 has fallen to $46.4 billion, compared to $56.7 billion for this year — the first meaningful drop after several years of steeply increased need. Yet the world continues to face multiple protracted conflicts, with 11 countries requiring more than $1 billion for humanitarian response plans. It seems plausible that as we move further from the pandemic, its legacy will begin to fade, but it is not clear whether other factors will also reduce. And it is uncertain whether donors will provide more in 2024. Most donors face unusually severe domestic challenges and therefore have less political headroom than normal to spend more abroad. The U.S. is likely to continue to face political gridlock which will hamper its ability to respond. And with all donors currently being asked for more cash on several fronts, it seems likely that the humanitarian sector may continue to face a squeeze.