January 22, 2016 (C-Fam) Terrorism, natural disasters and the Syrian refugee crisis have left 125 million living in disaster and conflict areas and led to a $15 billion shortfall in humanitarian aid, despite record giving. So says a 9-member panel of experts who hope to convince nations to radically overhaul the way they give and distribute aid.
“Never before has the world been so generous towards the needs of people affected by conflicts and disasters, and never before has generosity been so insufficient,” the panel said in a report released last week which translated two-years of discussions with aid groups around the world. The report laid out three goals they hope nations will agree to at a 2-day summit in May in Istanbul.
At $25 billion a year, nations are giving more than ever to humanitarian aid—up from $2 billion in 2000. Even that generous total is only 0.031% of an unprecedented annual $78 trillion global GDP, the report noted.
In 2014, humanitarian assistance overtook peacekeeping as the UN’s costliest activity. Yet 80% of aid goes to conflict settings—mostly to wars lasting more than 7 years.
The first goal is to reduce the need for humanitarian assistance by closing the gap between humanitarianism which is aimed at assistance in volatile settings and development which is intended for long-range programmatic needs. The report urges humanitarian aid groups to base funding appeals on demand and not their own funding cycles, and wants countries hosting refugees to get aid and low-interest loans.
The second goal is to change the way money is raised. The panel hopes to convince capitals to see humanitarian aid as a “global public good” requiring flexible financing that can easily cross borders. It wants nations to voluntarily sign up for “solidarity levies” on airline tickets and fuel and consider the feasibility of a financial transaction tax or Tobin Tax, which it estimates could raise between $25 and $34 billion annually in Europe.
The report recognizes that the 1970 UN-set goal of giving 0.7% of gross national income to aid excludes other ways that nations give. Those include remittances, private and foundation giving, and the costs of military operations to preserve and secure the peace, or for hosting refugees.
According to the report’s references, the US provided 33% of all government-funded aid over the last decade, four times more than the next largest donor, the UK. It commended large donors for giving despite increased burdens at home. American debt is more than 100% of GDP; in 2000 it was less than 40%.
The panel hopes to diversify funding by getting insurance, digital cash, logistics and telecommunications companies more involved. They wrote to several corporate CEOs asking that they voluntarily institute “micro-levies”.
The report calls on nations to reduce transaction costs, now almost 10% in sub-Saharan Africa, to spur more remittances. It recommends empowering an international finance institution to bypass restrictions aimed at money-laundering and terrorism financing.
The panel recommends tapping into Islamic Social Finance, with its $560 billion in mandatory alms-giving annually, and harnessing the Islamic world’s $15.9 trillion economy, third only to that of the US and EU. Ninety percent of crises are in Islamic states, and 31 out of 33 conflicts are in Muslim-majority countries.
The third goal is to improve efficiency. Half of all aid was channeled through just six UN agencies in 2013. Only two of them systematically track their expenditures or that of their partners, the report says.
The panel’s report proposes a “Grand Bargain” in which donors agree to multi-year funding and ease up on earmarking—increased from 15% to 81% in 10 years–while recipients improve transparency and accountability through such means as digital technology.
Just 0.2% of aid went directly to local organizations in 2014. These groups made it clear in the consultation process that they want more control, and have since expressed concern that they will not be represented at the Istanbul Summit. Sources told the Friday Fax that the UN Secretariat has cut NGO participation in the summit by half, apparently due to security concerns.
UN delegates told the Friday Fax they are puzzled at the lack of an inter-governmental process so far, given that the Secretariat wants nations to agree to its terms. They said there may be such a process after the summit to work out financing details.
Reprinted with permission from C-Fam.