- The humanitarian system needs to adopt an anticipatory approach.
- This will involve greater use of insurance, Catastrophe Bonds, anticipatory actions, as well as addressing underlying problems.
- We must track results in order to scale-up successful experiments, and abandon others.
We face a world where record numbers of people need humanitarian assistance, climate change is hitting the poorest hardest, and combatants routinely flout humanitarian principles. The outlook is bleak.
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But when it comes to the power of the humanitarian system to meet these challenges, I remain optimistic.
I am in the fortunate position of seeing up close how UN agencies, the Red Cross and brilliant NGOs save lives, treat people who are ill, and protect those fleeing conflict.
But I am optimistic about the power of the humanitarian system not only because of what it is, but what it could be if we change it from one that reacts, to one that anticipates.
The traditional approach to dealing with humanitarian crises has been to watch disaster and tragedy build, then decide that we need to respond, then mobilize money and organizations to help, and only then to start to get help to the people who need it.
It is a reactive approach. It saves many lives.
But if a poor farmer knows that her seeds won’t produce a harvest due to an imminent drought, why don’t we give her drought-resistant seeds, instead of waiting for her family to starve and her children to show up malnourished in a clinic?
And if we know that cholera is likely to break out somewhere, why don’t we remind people to wash their hands, and make sure there are clean water sources and enough hydration medicine at the local clinic, instead of waiting till people are infected and fall ill?
By taking an anticipatory approach we can have a better, faster and cheaper solution to humanitarian needs. One that is more dignified. One that protects hard-won development gains. And one that deals with problems before they arise and where they arise.
There are five key steps to achieving this:
1. Expand use of disaster risk insurance
The first thing we need to do is to make much greater use of disaster risk insurance. This kind of insurance is taken for granted in wealthy countries, where almost half of natural hazard costs are covered by insurance. That is not in the case in poorer countries, which on average have just 5% coverage.
With climate change, natural disasters are becoming more frequent, more intense and more destructive. Expanding coverage can make a huge difference in preventing shocks from becoming humanitarian crises. Insurance provides fast, predictable payouts. It also makes people more aware of risk.
I want to see progress made by applying principles of anticipatory approaches to insurance so that they pay out earlier, possibly even before a predictable disaster, and incentivize policyholders to reduce and manage risk.
2. Use pre-agreed, contingency finance
Most governments organize contingency financing for themselves through their national budget process. But many poorer countries are unable, unwilling or too fiscally constrained to do this. Pre-agreed, contingency financing from the multilateral system, which gives countries access to grants or loans at concessional rates to finance emergency response and reconstruction can help. One example is Deferred Draw Down Options, like those that borrowers from the World Bank can obtain. Once a disaster occurs, these so-called DDOs are designed to be disbursed almost immediately.
3. Use Catastrophe Bonds to share risk
We should share more risk in humanitarian settings with the private sector, in addition to insurance. Catastrophe Bonds are another instrument that provide cash to governments immediately after a disaster. If things go the investors’ way, they recover their capital in full, plus the interest generated, plus the government’s premium. If a disaster happens, investors lose their capital, which goes as an instant payout to the government.
The World Economic Forum’s Humanitarian Investing Initiative is seeking to identify the areas where risk sharing between humanitarian and development agencies and corporates and investors is possible.
4. Solve the underlying problems
We need to focus on development which builds resilience against crises, and design humanitarian interventions in a way which secures greater development benefits. Sometimes it makes more sense to support long-term solutions and solve the underlying problem than to respond to the crisis each time. For example, it is estimated that in Ethiopia the cost of 6-9 months of water trucking to camps for displaced people is equivalent to the cost of a semi-permanent water supply system. Too often we end up financing trucking for two years or more when it would be cheaper to establish a more permanent solution from the outset.
5. Take an anticipatory action
We must do everything we can to act earlier and faster by taking an anticipatory action. For example, in July, the Government of Bangladesh and the World Food Programme identified communities about to be flooded in north western Bangladesh. The traditional approach would have been to mobilize experts and stockpile food and shelter materials. This time, WFP simply gave 5,000 families $53 each three days in advance. People were able to move to safer areas, fortify their homes and buy essential supplies.
Another example comes from work done by US scientists supported by the UK’s Department for International Development to predict cholera outbreaks. Some people think it may now be possible to predict a first person becoming infected up to four weeks ahead of time, within a geographic area smaller than 250 meters by 250 meters anywhere in the world.
We face a year ahead in which conflict and the climate crisis have driven 168 million people to a point where they need humanitarian aid to survive. That is 1 in every 45 people and the highest figure in decades. It will take $29 billion to deal with this in 2020 alone.
We have no choice but to make every donor dollar go further and faster. I believe the answer to achieving this lies in an anticipatory approach.
But we must go into this with our eyes wide open. As we innovate more, and use data to anticipate problems before they occur, we need to remain clear-minded and analytical. Some of these innovations will work brilliantly, others will not. Together, we must confidently scale up the successful experiments and ruthlessly abandon the others.
An anticipatory approach requires a degree of boldness, maybe bravery, to challenge the status quo. It requires a leap – not of faith, because this is data-driven – but of confidence. The human and financial gains of this work are too valuable to squander.