Summary Gha Report 2009

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SUMMARYGH

AREPORT20

09


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GHA Report 2009: Summary

Contents

Humanitarian aid: its not just about the money 1

What we know 6

Humanitarian assistance from DAC donors 6

Humanitarian assistance from non-DAC donors 11

Humanitarian assistance through NGOs 14

Financing mechanisms 16

What dont we know? 21

The long view 22

What does data tell us about humanitarian assistance over time? 22

Humanitarian assistance and development aid: converging worlds? 23

This is a summary of GHA Report 2009, compiled during April/ May 2009 and issued inJuly. The analysis is based on data downloaded in April. The full report together with theaccompanying data can be downloaded from www.globalhumanitarianassistance.org

Jan KellettProgramme LeaderNovember 2009


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Page 1

Humanitarian aid:its not just about the money

Humanitarian intervention is not just about how much money is spent and bywhom; its also about how and where it is spent. Every choice made to whichcountry and through which organisation, by which mechanism, to which sector oflife has an impact, not only in-country but also well beyond the individualintervention itself. If there was one important message from our analysis it would bethis: humanitarian aid is not just about the volume of money. There are clearchoices to be made and each choice has an impact. So what are the major pointsand major trends we can look at for 2009?

Public donations to NGOs, UN agencies andRed Cross and Red Crescent Movement

2007 / US$3.1bn2008 / data not available in fullAnnual reports and initial programme research

Humanitarian assistance from non-DAC donors

2007 / US$341m2008 / US$ 1.1bnUN OCHA FTS

Post-conflict and security-related ODA(DAC donors)

2007 / US$3.1bn2008 / data not available until December 2009OECD DAC Stat

Multilateral official humanitarian assistance(DAC donors to UN agencies)

2007 / US$913m2008 / data not available until December 2009OECD DAC Stat, DAC2a Disbursements

Bilateral official humanitarian assistance

(DAC donors)

2007 / US$7.8bn2008 / US$10.4bn (prelim)OECD DAC Stat, DAC1 Official and Private Flows

Total official humanitarian assistance(DAC donors)

2007 / US$8.7bn2008 / data not available in fullOECD DAC Stat, DAC1 and DAC2a

2007 2008

US$15bn

US$18bnWe estimate the international resourcesallocated to humanitarian assistance tohave amounted to at least US$15 billion in2007 and US$18 billion in 2008

Figure 1: Global humanitarian assistance, 2007 and 2008 [Source: Development Initiatives'guesstimate' based on OECD DAC Stat DAC1, DAC2a, UN OCHA FTS, annual reports and

programme research]


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Firstly our guestimates suggest that global humanitarian assistance has gone up and quite significantly, from US$15 billion in 2007 to US$18 billion in 2008. Thebulk of this change has been driven by members of the Development AssistanceCommittee (DAC).This grouping of what could be called the traditional donors ofdevelopment aid contributed an additional US$2.6 billion of humanitarian aid in2008 according to the preliminary figures.

However before going into DAC and other humanitarian spending in detail, let ustake a look at some likely future trends.

If DAC donors keep their current promises for aid increases, total officialdevelopment assistance (ODA) will reach US$145 billion by 2010. This will be anadditional US$42 million in real terms on top of aid levels in 2007. Humanitarian aid a subset of ODA has been relatively static during the last ten years, accountingfor between 7.6% and 10% of ODA. If humanitarian assistance is 10% of ODA in2010, it will amount to US$14.5 billion an increase of 67% on 2007 figures.

In terms of sectors, ODA spent on post-conflict and security-related activitiesincreased sharply in 2007, rising from US$1.9 billion in 2006 to just overUS$3 billion. Fragile and post-conflict states are high on the policy agenda andnew funding instruments are being developed or piloted to respond to them,

suggesting that aid to these sectors may be increased in future. Protracted criseswill probably continue to receive funding.

Non-DAC donors are increasingly relevant to international interventions politicallyeven though it could be argued this has not translated into a great increase inhumanitarian aid. The Indian Ocean tsunami of 2005 appeared to have stimulatedan increase in aid from these countries, which has since continued, with majoremergencies or nearby countries receiving the bulk of their aid. Non-DAC interest inhumanitarian aid (including pooled funding mechanisms such as the CentralEmergency Response Fund (CERF)) appears to be on the rise.

Set against these potential increases in resources for humanitarian aid is the globalfinancial crisis. It may be that there is more need just at the time when donors and

people from wealthy nations have less to spend. In November 2008 DAC donorsreiterated commitments to meeting aid pledges yet in some cases, withoutadequate budget provisions. Whilst there is some belief that humanitarian aid ismore protected than development funding (public support based on the fact thathumanitarian aid saves lives immediately) and that the same isolation that leavespeople in need of humanitarian interventions may have insulated them from the fulleffects of the global crisis, there are still doubts as to the future of humanitarian aid.


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Figure 2: Percentage changes in humanitarian assistance, development assistance and GNI forDAC donor countries combined, 1973-2007 [Source: Development Initiatives analysis based onOECD DAC statistics]

Humanitarian assistance

Development assistance

GNI

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

Annualpercentagechange

120%

100%

80%

60%

40%

20%

0%

-20%

-40%

However there is no clear relationship between changes in gross national income(GNI) and humanitarian assistance, so there is no reason to conclude thathumanitarian assistance will fall as a direct result of the financial crisis.Governmental humanitarian assistance grew in 2008 despite a reduced growth rateof GNI. Three things are evident: large disasters drive the major peaks inhumanitarian aid regardless of GNI; humanitarian assistance is much more variable

than development; in the last five years, development and humanitarian assistancehave had a more shared pattern of growth than in previous decades.

The other major source of humanitarian aid financing public contributions shows little change between 2006 and 2007 (2008 data not complete as yet).Based on a review of 19 major NGOs and NGO coalitions, there was a decreaseof 4% or US$117 million in 2007 with six NGOs reporting increases and 13 reportingdecreases. Public contributions account for at least one-fifth of internationalhumanitarian assistance. However, should the financial crisis affect householdsgreatly across developed countries, this could seriously impact the availabilityof humanitarian resources.

The next question we need to ask is whether or not the money spent has actuallymet humanitarian needs. Currently the only reliable tool we have to measure needs

(and a proxy measure at that) is the UN consolidated appeals process (CAP)because it sets out the financing requirements and priorities for each country, andthen measures the funds received.

For example we know that in 2008, 70.2% of needs were met; over the last eightyears the percentage of needs met ranged from 55.5% to 75.8%. Unmetrequirements range more drastically depending on the year. In 2008, unmet needsreached more than US$2 billion.


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Figure 3: UN CAP appeal requirements, funding and unmet needs, 2003-2009[Source: Development Initiatives analysis, UN OCHA FTS data]

2003

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

3,958

US$million

5,221

1,263

2004

2,197

3,418

1,221

2005

4,020

5,979

1,959

2006

3,365

5,0

61

1,696

2007

3,719

5,142

1,423

2008

5,082

7,238

2,156

2009

2,368

8,4

63

Requirements

Unmet need

Funding

Within the CAP there is a huge variation in the size of appeals typically the largestappeal will be six or seven times the average of the rest. For the past five yearsSudan has been the largest appeal and accounted for a large proportion of unmetneeds; in 2005 Sudans unmet appeal reached US$888 million, which was 45% ofthe total unmet needs of the whole year.

Whilst the very big crises may actually account for the bulk of unmet need in termsof percentage, it is the small crises that suffer from having a poor amount ofrequirements funded. The appeals for Zimbabwe in 2004 and for Zambian flash

floods in 2007 received only 14% and 12% respectively. Most consolidated appealsrelate to complex conflict-related emergencies. Major natural disasters usuallyresult in a flash appeal. In 2007, 30 countries had CAP appeals (15 consolidated and15 flash). Sudan and Democratic Republic of Congo (DRC) both complexemergencies were the countries with the largest UN CAP appeal requirements andthe largest shares of the funding in both 2007 and 2008. Somalia received the thirdlargest volume of funding in 2007 and 2008.

By far the largest flash appeal by volume and share of years total was the IndianOcean tsunami with requirements of US$1.4 billion (23.65% of the years total)in 2005. The same year saw the South Asia earthquake with requirements ofUS$561 million or 9.4% of the total.


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Figure 4: Number of UN CAP appeals [Source: Development Initiatives based on UN OCHAFTS data]

2003

35

30

25

20

15

10

5

0

25

2004

22

2005

15

2006

17

2007

15

2008

11

27

31

25

22

30

23

Flash appeals

Consolidated appeals

Figure 5: UN CAP requirements, 2003-2008 [Source: Development Initiatives based on UN OCHAFTS data]

200

3

5,189

200

4

2,967

200

5

3,798

200

6

4,873

200

7

4,769

200

8

6,041Flash appeals

Consolidated appeals

3,417

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

5,979

5,220

5,142

5,0

61

7,239

US$million

Nu

mberofappeals

29

105

15

12

2,181188 373

1,198

451

By their nature both the number and scale of flash appeals vary year on year.The share of requirements met in flash appeals varies from 40% to nearly 100%,while complex emergencies are usually about 70%-funded.


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What we know

Humanitarian assistance from DAC donors

Turning in more detail to DAC donors, how much do they actually spend onhumanitarian aid? Preliminary data for 2008 shows a 15.1% increase inhumanitarian expenditure on 2007 levels, rising from US$8.6 billion to US$10 billion almost matching the exceptional response to exceptional disasters in 2005.

Figure 6: Total official humanitarian assistance expenditure, 2000-2008[Source: Development Initiatives analysis based on OECD DAC1 and 2a]

2000

2001

2002

2003

2004

2005

2006

2007

2008

(prelim)

6.521

6,317

6,570 7

,942

7.943

10,843

9,7

97

8,6

89

US$million(constant2007prices)

Total humanitarianassistance

Multilateral (UN agencies)

Bilateral

12,000

10,000

8,000

6,000

4,000

2,000

0

10

,000

Whilst there was a dip in humanitarian spending in 2006 and 2007, the long-termtrend remains upwards with amounts in 2007 still over 33% higher than 2000,and almost 175% higher than in 1990 in real terms. Figures and analysis reveal aratchet-effect where a major-disaster peak in spending is followed by higher levelsof humanitarian aid in future years.


Bilateral2000 2001 2002 2003 2004 2005 2006 2007 2008

Figure 7: Change in volumes of bilateral and multilateral humanitarian assistance, 2000-2007 (withpreliminary bilateral data for 2008) [Source: Development Initiatives based on OECD DAC 1 and 2]

AfghanistanIraq

Indian Oceanearthquake/tsunami

Sudan?

1,263

138

820

1,563

650

2,245 2,223

-954

3,000

2,000

1,000

0

-1,000

-2,000

US$million(constant2007prices)


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Page 7

Humanitarian needs and expenditure naturally change year on year, dependingon natural disasters, but with a strong caveat regarding complex emergencies,where expenditure remains constant over time. This has some particularlyimportant implications.

Official multilateral humanitarian assistance is much less volatile than officialbilateral humanitarian aid because it represents core, unearmarked contributions

to UN agencies which tend to change less year on year.

Humanitarian assistance can flow through many different agencies andorganisations on its path from DAC donors to affected people. The public sector,UN agencies, Red Cross/Crescent Movement, EC and NGOs are all channels forhumanitarian assistance. Some of these will then in turn become donorsthemselves. In 2007, 50.4% of DAC humanitarian assistance was channelledthrough multilateral organisations (mostly UN agencies), whilst 25.3% went toNGOs and civil society organisations (CSOs). This latter group is a broad category,which here includes the Red Cross and Red Crescent Movement, research institutes,national NGOs in the donor country as well as those registered in the receivingcountry. Some donors name over 50 individual NGO recipients. Different donorsgive more importance to some methodologies of expenditure than others.For example Portugal gives all its aid to the public sector and France nearly 90%;

other donors (Greece, Belgium) give more than 60% to multilateral institutions.Some countries such as Sweden and Norway give nearly 50% to NGOs.

Collectively the EC and EU member states contributed 50.9% (US$4.4 billion)of total official humanitarian expenditure in 2007. However the single largestdonor by volume was the United States which contributed US$2.9 billion or34.5% of DAC donor aid followed by the EC at US$1.6 billion and the UK atUS$743 million respectively. 1

1 We treat the EC as both donor agency and multilateral recipient of EU member state funds, providing directsupport to developing countries as well as playing a federating role with other EC institutions and EUmember states


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Figure 8: Total humanitarian expenditure by DAC donor, 2007. The totals for each of the 23 DACdonors shown here should not be added together as this would lead to the double counting ofEC's total official humanitarian expenditure [Source: Development Initiatives analysis based onOECD DAC Tables 1 and 2a]

UnitedStates

EC

UnitedKingdom

Germany

Netherlands

Sweden

Norway

Spain

France

1,58

5

743or976

618

521

512

432

370 3

60

Italy

Canada

340

330

Denmark

Ireland

Switzerland

Australia

Belgium

Finland

Japan

Austria

Luxembourg

250

235

192

163

156

143

116

53

300

250

200

150

100

50

0

46

Greece

NewZealand

44

40

Over US$300m

2,994

Portugal

21

3,500

3,000

2,500

2,000

1,500

1,000

500

0US$million(constant20

07prices)

milli

on(constant2007prices)

Multilateral (EC)


Bilateral (additional CRS-reported)

Bilateral

Under US$300m

In terms of generosity, a different picture can be found if we use percentage GNI orpopulation as our base marker rather than overall volume. Whilst 19 DAC donorsgave more humanitarian aid by volume than Luxembourg in 2007, Luxembourgscitizens gave US$98 each, which is almost ten times more than US citizens(US$10 per person). The only other donor nearly as generous was Norway(US$98 per person), followed by Sweden and Ireland (both US$56 per person).Less generous donors per person included Portugal (US$2) and Japan (US$1).The data on aid as a percentage of GNI reveals a similar picture.

Luxembourg, Sweden, Norway, Ireland and Denmark are all revealed as being themost generous donors in terms of the share of their wealth; all spent 0.11% of theirGNI on humanitarian aid in 2007 (although it should be noted that whilst there is acommitment of donors to reach 0.7% of GNI in total ODA, there is no equivalent for

humanitarian aid).


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Page 9

Where is it spent?

Sudan was the largest recipient of humanitarian assistance from DAC donors for thethird consecutive year in 2007, receiving US$1.3 billion (17.1%) of the US$7.4 billionallocated to specific countries. The next largest recipients were Palestine/OPT andDRC (which both had the largest UN CAP appeals in 2007).

Others,US$2,936m,

39.8%

Afghanistan, US$307m, 4.2%Congo, Dem Republic, US$408m, 5.5%

Ethiopia, US$291m, 3.9%

Indonesia, US$228m, 3.1%

Iraq, US$306m, 4.1%

Lebanon, US$321m, 4.4%

Pakistan, US$233m, 3.2%

Palastinian Adm. Areas, US$833m, 11.3%

Somalia, US$255m, 3.5%

Sudan, US$1,263m, 17.1%

Figure 9: Top 10 recipients of total humanitarian assistance from DAC donors, 2007[Source: Development Initiatives based on OECD DAC data]

Humanitarian assistance is clearly concentrated on a small number of countries.The ten largest recipients of humanitarian assistance from DAC donors accountedfor 60.2% (US$4.4 billion) of the total in 2007 and over the last eight years the samecountries have dominated in terms of volume of assistance.

Figure 10: Top 10 recipients of total official humanitarian assistance since 2000[Source: Development Initiatives analysis based on DAC2a, OECD DAC]

2000 2001 2002 2003 2004 2005 2006 2007

Sudan

Somalia

Serbia

Palestinian Adm. Areas

Pakistan

Iraq

Indonesia

Ethiopia

Congo, Dem Republic

Afghanistan

6,000

5,000

4,000

3,000

2,000

1,000

0

US

$million(constant2007prices)

Together, the top 10 recipients of total official humanitarian assistance since2000 have accounted for 52.9% of the total over the period and of these onlySerbia, as can be seen below, had a clear end point whilst for others the fundinghas been continuous.


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What exactly are the priorities?

Using the UN CAP appeals as our key indicator of global priorities, DAC donors aredirecting their funding towards these identified needs. In 2007 DAC donors reportedUS$2.9 billion through the UN OCHA Financial Tracking Service (FTS) in support ofthe CAP, equivalent to 37.1% of their official humanitarian expenditure. This is ahigher percentage than in either 2006 or 2008. It represented a share of 77.5%

of total CAP identified need in 2007, again higher than both 2006 and 2008.

In terms of sector priorities, food has traditional dominated both sectoralrequirements and donor expenditure inside the CAP, accounting for US$6.4 billion(28.9%) of the US$22.1 billion spent by DAC donors on UN appeals between 2006and 2008.

Figure 11: DAC donor funding 'inside the CAP' by sector, 2006-2008[Source: Development Initiatives analysis, UN OCHA FTS data]

Water & sanitation

Shelter & non food items

Sector not yet specified

Safety and security of staff and operations

Protection/human rights/rule of law

Multi-sector

Mine action

Health

Food

Education

Economic recovery and infrastructure

Coordination and support services

Agriculture

685

3,943

383

1,511

6,399

269

650

1,493

738

587

401

5,059

17

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

US$ million

Funding for coordination and support services has remained constant at close to5% of total DAC spending in each year but in each case it has met around only40% of the actual need in the sector. DAC donors contributed less than one-thirdof required funding for economic recovery and reconstruction, education, health,protection, safety/security of staff, shelter and water/sanitation.


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2 We use the term non-DAC to describe government donors that are not members of the OECD DAC. Thesecountries are sometimes called emerging or new donors, somewhat misleading given that they have oftenbeen giving humanitarian aid for many years. The categorisation is here because data is available for DACcountries in a way that it is not for non-DAC. However given the reliance on voluntary reporting to the FTSdatabase it is important to realise that it may not be as complete a picture of non-DAC humanitarian aid asis the reality.3 In addition to cash and in-kind contributions, non-DAC donors contribute significantly to supportingrefugees and although data on the costs of supporting refugees is not available the figure below shows how20 countries were housing the largest number of refugees in 2007, 15 of them non-DAC countries whilstthree countries Syria, Iran, Pakistan hosted 34.7% of all refugees.

Humanitarian assistance from non-DAC donors2

The role of non-DAC donors in humanitarian aid has tended to be overshadowedby that of the DAC members, which still give the bulk. Analysis reveals that somenon-DAC donors are increasingly more significant (in terms of volume) inhumanitarian aid than some DAC donors. The way in which the non-DAC donorsprovide funding is also particularly significant for some recipients.

Non-DAC donor aid has changed over the years partly because of the changingstatus of members of the DAC itself; in 1960, a number of current members wereaid recipients, such as Portugal and Greece.

Non-DAC development aid contributions have actually been and remain significant.

In 1970 Arab countries were giving more ODA than all but five DAC countries.

In 2007 Korea and Turkey gave more ODA than five DAC members.

In 2007 Arab countries reported ODA of US$2.6 billion, which taken as a wholeis larger than eleven of the 23 DAC members.

Today there are 98 non-DAC donors of humanitarian funding (according to FTS)compared to just 58 in 2006.

How much do non-DAC donors spend on humanitarian aid?

A small number of non-DAC donors contribute more humanitarian aid than someDAC countries. In 2008 Saudi Arabia gave US$727 million in aid, making it the thirdlargest donor whilst the United Arab Emirates (UAE) and Kuwait gave morehumanitarian assistance than eight DAC donors, including two G8 countries.

3

In 2008 these Gulf States dominated non-DAC donor reported humanitarianassistance, contributing more than 90% of the non-DAC humanitarian total.

Figure 12: FTS-reported DAC and non-DAC humanitarian assistance, 2000-2008[Source: Development Initiatives analysis based on UN OCHA FTS data]

2000

2001

2002

2003

2004

2005

2006

2007

2008

79 7

32

171 1

59 2

84 6

50

303

341

US$million

12,000

10,000

8,000

6,000

4,000

2,000

0

1,0

80

4,932

4,815

5,075

6,217

6,4

86

7,848

6,3

86

6,675

9,074

Non-DAC

DAC


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6,000

5,000

4,000

3,000

2,000

1,000

0

Contributions from the public toNGOs

Unearmarked multilateralhumanitarian assistance

CERF and pooled funding

Bilateral humanitarianassistance excluding spendingon NGOs

Total NGO humanitarianassistance

Figure 14: Channels of humanitarian funding compared, 2007. Please note these numbers are forcomparative purposes and should not be added together [Source: Development Initiativesanalysis based on NGO reports, OECD DAC statistics, CERF and CHF reports]

U

S$million

5,422

4,8

83

706

913

2,5

60

Humanitarian assistance through NGOs

NGOs are major humanitarian actors, spending money from DAC governmentsand multilateral agencies as well as raising money from the general public.

It is estimated that in 2007, US$2.6 billion of the total US$4.9 billion inhumanitarian assistance spent by NGOs came from the public or corporatedonations, with the remaining US$2.3 billion funded by multilaterals andDAC donors.

To give a sense of scale, the publics contributions to NGOs in 2007 was more than

three times the total expenditure of the CERF and country-level pooled funds.NGOs are also major players in terms of volume of aid. Caritas and Mdecins SansFrontires (MSF) reported the highest levels of humanitarian assistance in 2007;both international groups made up of individual agencies in different countriesand both exercising decisions on funds far above that of many nation states.For example, MSFs humanitarian expenditure outstripped that of all DAC donorsexcept the EC and the United States, whilst World Vision and Caritas provided morethan all but four DAC donors.

The amount and share of publicly raised money is also significant for reasonsbeyond the amount added to general humanitarian aid:

- funding from the general public appears to be much more rapid thanpublic funds

- public donations are usually not earmarked within an emergency

- raising public funds also raises awareness and can influence policy.


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Figure 15: Humanitarian assistance spent through NGOs 2007: top ten donors[Source: Development Initiatives analysis based on DAC Creditor Reporting System (CRS).Note: Not all donors are included as some fail to report the channel of delivery for theirhumanitarian assistance]

Ireland

Switzerland

Denmark

Netherlands

Germany

Norway

Sweden

UnitedKingdom E

C

54 62 64 72 75

160

172

260

718

UnitedStates

1,056

1200

1,100

1,000

900

800

700

600

500

400

300

200

100

0

US$million

The type of NGO supported by DAC donors also varies. Whilst half the NGOssupported by Ireland and the Netherlands are international, the majority of donorsconcentrate on NGOs based in their own countries.

The proportion of funds received from DAC donors compared to the general publicdiffers greatly between NGOs. Norwegian Peoples Aid receives almost all of itsfunds from official donor countries whilst MSF obtains nearly 90% of funds fromthe public.

The amount of money channelled through NGOs varies from country to country.Norway and Sweden give more than 45% of their bilateral assistance through NGOs

(and are also provide unearmarked support to UN agencies and pooled fundingmechanisms). Meanwhile, whilst the EC, the United Kingdom and the United Statesdo not channel the largest proportion of their aid through NGOs, they are significantcontributors in terms of volume.


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Sudan

DRC

Somalia

Colombia

Chad

Iraq

Pakistan

Uganda

Liberia

Lebanon

300

250

200

150

100

50

0

1229

1230

1137

262

4

242

7

332

0

5693

455

6251

85193

US$millions

Official sources

Public donations

Figure 16: Top ten recipients of NGO humanitarian assistance, 2007[Source: Development Initiatives analysis based on NGO reports]

Where do NGOs spend their humanitarian assistance from non-officialsources?

In 2007 the largest share of NGO humanitarian assistance went to Africa (63%),compared to 43% of share of DAC donor spending. The biggest difference inregional priorities is the Middle East, where DAC governments give 16% ofhumanitarian aid compared to the 6% of NGO spending.

Some priorities are clearly shared. Five countries among the top ten recipients ofNGO expenditure are also recipients of DAC humanitarian aid: Sudan, DRC, Somalia,Iraq and Pakistan. Public awareness, fuelled by media attention, is important indriving humanitarian assistance from governments and voluntary contributions fromthe public. Some countries are funded overwhelmingly from public donations.Among the larger recipients of NGO humanitarian assistance, Colombia, Chad, Nigerand Haiti were all financed primarily by the public.

Smaller, often neglected, crises have a different pattern of financing. NGOs reportthat there is little advantage in appealing to the public for forgotten emergenciesand they rely on either government funding or their own reserves to meet suchneeds. As a result a large number of countries receive small amounts ofhumanitarian assistance from nearly entirely donor countries. Thus official fundingwas the source of finance for almost all NGO humanitarian activity in WesternSahara, Tanzania, Guinea Bissau, Eritrea, Timor-Leste, Madagascar and Swaziland.

Financing mechanisms

Since 2000 there have been some major innovations in instruments used to financehumanitarian assistance, which often have their roots in the humanitarian reformagenda. The innovations have been driven by the imperative to fund according toneed, the recognition that some crises are much better funded than others and thatpriority needs have been left unmet.

In most humanitarian situations the shaping forces are largely outside of donorcontrol. The one thing that is within their control is financing and these new

modalities (like any kind) can empower one group at the loss of another.


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Pooled financing also affects priorities since they are often tied into a strategic planfor the recipient country and therefore can only be spent on those priorities alreadyidentified. Organisations that want to receive those pooled funds therefore have tobe part of processes of joint assessments, coordination etc; in fact thesemechanisms provide incentives for such behaviour. These mechanisms may alsohave some negative effects such as when government receipt is precluded,suggesting a lack of domestic capacity that does not actually exist.

Financing mechanisms affect behaviour, architecture, influence of groups andpriorities there is no neutral choice.

What are the new mechanisms?

New mechanisms include the CERF, established in 2005, and country-specificcommon humanitarian funds (CHF) and emergency response funds (ERF). The CERFaims to ensure that funding flows more equitably between different crises while thecountry-level pooled funds are instruments designed to get funding to flow topriorities within a specific crisis.

Funding for both has been increasing for three years and in 2008 they receivedUS$861 million between them compared to US$582 in 2006.

Some donors are actually channelling substantial shares of their humanitarian aidthrough these structures over one-fifth of the United Kingdoms and theNetherlands total official humanitarian assistance was allocated to thesemechanisms in 2005. The CERF has attracted a large number of donor countriesas well as some private contributions.

The CERF

Figure 17: CERF income and expenditure, 2006-2008 [Source: Development Initiatives analysisbased on UN CERF data]

2006 2007 2008

299

259

385

351

453

429

Expenditure

Income

US$million

500

450

400

350

300

250

200

150

100

50

0

The CERF is a fund open to both the UN system and IOM and is managed by theEmergency Relief Coordinator (the head of UN OCHA) who decides on theallocations of funds. The fund is split into two elements, one focuses on rapidresponse whilst another targets underfunded emergencies. Funding for the CERF(which has been seen as largely successful) has increased year on year with totalexpenditure now in excess of US$1 billion.


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Figure 18: Shares of commitments to the CERF, 2007 and 2008 [Source: Development Initiativesanalysis based on CERF data]

Canada, 9.1%

Ireland, 6.8%

Spain, 5.4%

Australia, 2.3%

Denmark, 2.3%

Switzerland, 2.1%

Contributions belowUS$8m each, 8.9%

United Kingdom, 21.7%

Norway, 14.3%

Netherlands, 13.9%

Sweden, 13.3%

2007

Spain, 10.1%

Canada, 8.6%

Ireland, 7.4%

Germany, 3.3%

Denmark, 2.2%Australia, 2.1%

Contributions belowUS$8m each, 9.8%

United Kingdom, 17.7%

Netherlands, 14.1%

Sweden, 12.4%

Norway, 12.2%

2008

The CERF is reliant on four donors for more than half of its requirements, with theNetherlands, Norway, Sweden and the United Kingdom financing 61% in its firstthree years. These donors collective shares fell from 63.2% in 2007 to 56.5% in2008, reflecting increasing contributions from Canada, Spain and Ireland. In 2007,19 of 23 DAC donors supported the CERF increasing to 22 in 2008, the amountcontributed rising from US$378 million to US$447 million.

2006

2007

2008

159 20869

Top recipient (DRC)

Other nine in top 10

Outside the top 10

500

450

400

350

300

250

200

150

100

50

0

41

53

38

153

139

180

Figure 19: Concentration of CERF funding, 2006-2008 [Source: Development Initiatives analysis

based on UN CERF data]

US$million

Half of CERF funding has gone to nine countries over its lifetime, four of which (DRC,Sudan, Sri Lanka and Ethiopia) have been present amongst the top-funded everyyear . This group of countries has received 28.5% of funds disbursed by the CERFsince it began. Allocations have become increasingly less concentrated however. In2006 three-quarters of the funding went to ten countries but by 2008 that share haddropped by half (although because in general the CERF has increased inexpenditure, amounts to those major recipients has remained the same).


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CHFs

The CHFs, country-level pooled funds managed jointly by UN OCHA and UNDP, arepresent in only three countries at present: Sudan, DRC and Central African Republic(the latter beginning in only 2008). The main characteristic of CHFs is that theyreceive funds unearmarked, allowing money to be allocated on the basis of need.Thus CHFs are relatively flexible and can meet CAP and other identified needs much

more easily. However, they are usually tied into country plans.

Since 2006 donors have contributed a total of US$850 million to CHFs nearlyUS$500 million to the CHF in Sudan and over US$350 million to the CHF in DRC.

The United Kingdom has provided a substantial volume in each year to each CHF,more directed towards Sudan than DRC, whilst the Netherlands (the second largestcontributor of humanitarian aid) moved more money towards DRC over thethree years.

Income for the DRC CHF has risen steadily since 2006 whilst the Sudan CHF hasremained almost constant over the three years.

CHF funding can be allocated to both NGOs and the UN. Since 2006, 30% of fundinghas been channelled directly through NGOs. In both DRC and Sudan the amountallocated to NGOs has increased, reaching 47.6% in DRC and 35.3% in Sudan.Only relatively increased funds to DRC in particular have upheld the UN volumeof funding over these three years.

Figure 20: CHF expenditure and channels of delivery, 2006-2008 [Source: Development Initiativesanalysis based on OCHA in-country field office data]

DRC Sudan

CHF 2006

DRC Sudan

CHF 2007

DRC Sudan

CHF 2008

180

160

140

120

100

80

60

40

20

0

Total expenditure

NGOs

UN agencies

CAR

63

23

141

25

8

6

166

76

41

117

113

36

149

65

59

125

97

53

149

3

US$million

ERFs

Contributions to ERFs are unearmarked and pooled, differing from CHFs in that theyprovide most of their funding to short-term, small-scale NGO projects. They aremanaged in-country by UN OCHA. They are seen as plugging the gap in humanitarianaid, a pooled mechanism that allows for fast action in response to a sudden crisis.

Since 2006 ERFs have received a total of US$168 million from donors,US$152 million of which comes from 12 particular DAC donors. The United Kingdomand the Netherlands are the largest contributors, financing 30% and 24.8% offunding in 2008 respectively. Funding for ERFs increased between 2007 and 2008,attributable largely to contributions to Ethiopia.

Shares of funding allocated to NGOs and UN agencies vary depending on thecontext, with Somalia and Zimbabwe funds being largely given to NGOs (78% forboth in 2008). In Ethiopia, 40% was received by the UN in 2006 and 2008, althoughonly just over 22% in 2007. CAR reflects an average of ERF channels with two-thirdsof funds going through NGOs and the remaining through the UN.


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Somalia

2006 2007 2008

50

45

40

35

30

25

20

15

10

5

0

Ethiopia

Somalia

Ethiopia

CAR

Iraq

Zimbabwe

Somalia

Ethiopia

CAR

Iraq

Zimbabwe

Figure 21: ERF expenditure by channel of delivery, 2006-2008 [Source: Development Initiativesanalysis based on OCHA in-country field office data]

US$million

Total expenditure

NGOs

UN agencies

44

7

815

167

156

235

31013

192645

247

12

Overall the allocation has been 34.9% to UN agencies and 65.1% to NGOs over thelifetime of the ERFs the inverse of funding channels in the CHFs, where the UN hasreceived around 70%.


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The details mapped out in the previous section may suggest we know a lot aboutthe humanitarian world and its finances if not all then at least a good deal. It istrue that the Global Humanitarian Assistance programme does make an attempt tomap out everything relevant that it can obtain and present it for decision-makersand stakeholders of all kinds. What may not be so obvious is how far we still have togo and how much we may still not know.

Firstly there is no simple single database of humanitarian needs and expenditurethat we can easily interrogate. We know a reasonable amount about the money thatDAC donor countries spend because they collect details of spending and generallyfollow agreed guidelines on how to report internally all the money they spend onaid, including humanitarian aid. For non-DAC donors (increasingly importantpolitically if not so much in terms of development financing) it becomes more

difficult as our only source of collated data is the FTS, managed by UN OCHA andreporting is voluntary. Other information, such as how much NGOs and the RedCross/Crescent Movement receive from personal donations, has to be gleaned fromindividual reports from individual agencies: a time consuming and complicatedprocess, since different organisations call the same thing different names ordifferent things the same name.

What is more interesting is how little we do know. This is not just a question of thedifficulty of measurement. There are at least two other important components ofhumanitarian interventions that are not well included in the global humanitarianpicture, one of which has been largely neglected and the other which appears socomplicated as to defy attempts to count.

Firstly there is the issue of domestic response, i.e. the response within the affectedregion or country. Humanitarian interventions are felt to be something thatinternational institutions and organisations do in countries that need help. Howeverthe actual fact is that there is a huge quantity of humanitarian aid that happensin-country, by national and local governments, by national civil society, nationalprivate sector, communities, families and individuals, and finally throughremittances sent back home to developing nations. Much of this goes uncounted bythe international humanitarian community because it does not fit easily within thecoordinating structures and forums set up to better manage aid. Take as an examplethe Gujurat earthquake of 2001; there the UN investigated how much of the post-disaster aid was international in origin and it was only 6% of the total amount.Similarly in Nepal following the Koshi valley flood of 2008, the internationalcommunity was unaware that local communities had provided much support toaffected families even before the international community was aware there was

a disaster.

Secondly and equally important is the issue of needs. In a crude sense,if US$18 billion is being spent on humanitarian aid, there should be US$18 billionof need. We simply could not say that. Humanitarian interventions are only looselyconnected with actual needs. This may sound counter-intuitive but its not. Itsbecause the issue of needs is frighteningly complicated; they are not uniformlyexpressed from one country or crisis to another with competing vocabularies andindicators, with multiple organisations with multiple approaches andmethodologies often not open to peer review and near impossible to compareacross sectors and situations. Finally needs often become a political battlegroundfor institutions seeking influence and funding.

What dont we know?


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So beyond the figures of donors, NGOs and financing mechanisms, what is the bigpicture? What are the connections between humanitarian assistance and povertyreduction over time?

Humanitarian assistance is traditionally distinguished from development assistanceby being short-term, life-saving and exceptional, rather than longer-term, poverty-reducing and sustainable, and much attention is given to filling the gap betweenthese two. Yet the reality for many people is a lifetime of vulnerability and constantinsecurity, manifesting in acute crises whilst reducing peoples resilience to futuredisasters, promoting inter-generational poverty and vulnerability.

What does data tell us about humanitarian assistanceover time?

Firstly most humanitarian assistance is long-term, spent year on year in the samecountries suffering the same protracted crises. Since 2002 long-term humanitarianassistance has accounted for over half of spending. In 2003 and 2004 it was 79%and 76% respectively, falling to around 50% in the last three years. That compareswith a range of 29% to 41% for the period between 1995 and 2000.

The countries that receive long-term humanitarian assistance fall into twocategories. The majority of spending is in large countries in crisis: Sudan, Iraq, DRC,Afghanistan and Ethiopia but the other 11 recipients of long-term humanitarian aidinclude neglected emergencies, countries with protracted conflict and places wherethe environment for development assistance is unfavourable.

The long view

Iraq

Sudan

Afghanistan

Ethiopia

Somalia

Sierra Leone

Myanmar

Liberia

Korea, Dem Republic

Iran

Eritrea

Tajikistan

Congo, Republic

Congo, Dem Republic

Burundi

Angola

Figure 22: Countries that have received long-term humanitarian assistance 1995-2007 [Source:Development Initiatives based on OECD DAC 2a data]

US$million(

constant2007prices)

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0


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Chronically poor countries account for 98% of long-term (more than eight years) and37% of medium term (between three and eight years) humanitarian assistance: nota surprise perhaps given the links between chronic poverty and conflict, disastersand insecurity. This reemphasises the importance of humanitarian aid for countriesin chronic poverty. In sub-Saharan Africa, 30% of the population live in countriesreceiving long-term humanitarian assistance.

Importantly, in some chronically poor countries, humanitarian assistance is oftena large proportion of the total aid flow. In Chad, humanitarian assistance has beenbetween 44% and 58% of total ODA for the past four years, whilst DRC has received40% this way since 1994. In Burundi (with a GDP of US$118 and life-expectancyhovering at 50 years), nearly three-quarters of ODA has been humanitarianassistance since 1995. It is thus structured around responses to crises and shorter-term humanitarian thinking.

Humanitarian assistance and development aid:converging worlds?

The history of humanitarian assistance, as distinct from development aid, is

relatively short. Only since 1973 (13 years after the establishment of the OECD DAC)did donors start monitoring humanitarian aid and it was not until 2003 that donorscreated clear guidelines for humanitarian action through the Good HumanitarianDonorship (GHD) initiative.

This exception has and continues to allow donors to give aid countries that arenot development priorities but that are suffering from humanitarian crises as wellas give aid to countries deemed not to be good policy environments, such asNorth Korea.

Yet humanitarian and development assistance continue to grow ever closer,particularly through the drive to link relief to development, a relatively new conceptthat began in the mid 1990s. There have been many attempts to fill the apparentgap between relief aid provided outside state structures and development aidprovided to governments, and whilst there is no agreement on models, there hasbeen a convergence in general between humanitarian and development worlds.

Humanitarian work has expanded; not only does it fund countries in chronic poverty(as discussed earlier) but it also provides for early recovery and transition fromcrisis. The humanitarian community places increasing focus on tackling vulnerabilitybeforehand rather than solely reacting to events.

The link between crisis, risk, vulnerability and the impact of disasters is increasinglyvisible in donor humanitarian policies as well with many countries developing newpolicies linking vulnerability to crises and poverty.

Development assistance meanwhile has become increasingly concerned with issues

around fragility and conflict with 38% of development aid going to fragile states in2007 and funding for security and peace increasing.

Vulnerability is increasingly seen as part of the development agenda with socialprotection and cash transfers now seen as mainstream instruments to fight povertyand meet humanitarian needs, as they reduce risk and increase resilience.

This is important. In a world of diminished and perhaps diminishing resources,countries, communities and families in receipt of aid want to move on, move out ofvulnerability, move out of poverty, move into security. They do not care much fromwhich pot of money the aid might come; they might care how joined-up that aidmight be.

Despite the convergences of previously disconnected humanitarian and

development worlds, the institutions and people that manage different assistancesoften work separately, use different financing mechanisms and work within differentgovernment structures, and thus there is a loss in coordination, planning andimplementation of policy. There is still much work to do.


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Summary Gha Report 2009

Documents

Transcript of Summary Gha Report 2009