Scale of Humanitarian Crises Demands Partnerships with Private Sector to Deliver Lasting Solutions

Published
19 Jan 2017
2017
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Fon Mathuros, Head of Media, World Economic Forum: Tel.: +41 (0)79 201 0211; E-mail: fma@weforum.org

· The traditional donor-aid agency model of humanitarian response is no longer sufficient to cope with protracted crises

· Corporates are embracing humanitarian cooperation by leveraging their expertise and people to create shared value and sustainable solutions

· Humanitarians and corporates need to create a new narrative of partnership to allay fears that the private sector is seeking to profit from the suffering of others

· For more information on the Annual Meeting, see http://wef.ch/davos17

19 January 2017, Davos-Klosters, Switzerland – Humanitarian crises are so enormous, protracted and complex that the traditional donor-aid agency model of humanitarian response can no longer cope; lasting solutions will only come through partnerships with the private sector, concluded an expert panel of CEOs and humanitarian leaders at the World Economic Forum Annual Meeting.

One in 50 people on the planet needs humanitarian protection or assistance. The average amount of time that people spend as refugees has climbed to 17 years. The dynamics of conflict and natural disaster have become increasingly complex. “Every month, we do more in critical crisis situations and, every month, the situation is worse. We are increasingly aware that we need to work together in a very different way,” said Peter Maurer, President of the International Committee of the Red Cross (ICRC). The new role for humanitarian organizations is “to act as a catalyst to craft new ways of working together, in particular with development actors and the private sector,” said Filippo Grandi, United Nations High Commissioner for Refugees (UNHCR).

Corporates are embracing the challenge – not in the old philanthropic way, but through projects that create shared value. “You can’t solve a 17-year refugee problem purely by philanthropy,” said Ajay S. Banga, President and Chief Executive Officer of Mastercard, USA, adding: “We have to use our technology and our people to create a self-sustaining solution.” In Jordan and Lebanon, Mastercard has worked with the UN World Food Programme to provide aid money on charge cards so that 2 million refugees can buy the items they need through shops in their camps, rather than relying on grain distribution. This innovative approach has led to resource efficiencies of 20%-30%. Banga isn’t looking to make a profit but, if the losses are too great, then the project won’t be sustainable.

Meanwhile, Deutsche Post DHL, the world’s largest logistics company, has 400 employees volunteering with UN agencies to manage airport and warehouse logistics for natural disasters. The payback is the immense sense of pride and value the volunteers derive from their work. “The partnership must create shared value to be sustainable in the long term,” said Frank Appel, Chief Executive Officer of Deutsche Post DHL.

The key insight is that any new partnership model between the public and private sectors needs to be sustainable for all parties. For ICRC’s Maurer, this means building self-reliance among survivors to help them find their own way out of crisis. “We need new ways of strengthening communities and giving them back the power to help themselves,” he said, adding: “That’s a very new kind of humanitarianism.” Equally, when it comes to mass population flows, the more self-reliant refugees can become, the less of a burden they will be on host communities and aid agencies – and the better prepared they will be when they return home or move on. To achieve this requires new approaches to provide refugees with education, skills training and job opportunities.

Jordan has led the way in creating new ways to help refugees stand on their own feet. The country is hosting 650,000 Syrian refugees, 90% of whom are in host communities, not camps. The government lobbied the World Bank for over a year to secure soft loans to conduct development activities that would benefit both refugees and their host communities. With the EU, Jordan negotiated a preferential trade deal so that Jordanian manufacturers employing a certain number of refugees would pay little or no duty on many of their exports to the EU for the next 10 years. “The issue is to innovate with many partners,” said Imad Najib Fakhoury, Minister of Planning and International Cooperation of the Hashemite Kingdom of Jordan. The question he posed is: “Can I look at the refugee crisis and turn it into an economic development opportunity?”

Looking ahead, the corporates have no shortage of innovative ideas to improve humanitarian response. Mastercard has proposed helping the UN to issue disaster-affected people with identity cards to facilitate aid distribution. In Kenya – a country hosting 400,000 refugees in poorly resourced camps – Mastercard is looking at applying a smart-cities concept to improve delivery of water, food and education to those in need. For their part, the humanitarians are cautiously optimistic. Maurer voiced concerns that the new private-sector model is “insufficiently understood and politically still contested. When you talk about the business model, there’s a suspicion that you want to make money out of people’s suffering. We have to find a completely different narrative that allows us to have political buy-in.”

Focusing on the plight of refugees, Grandi concluded that offering refuge to those fleeing conflict requires more than just resources; it requires solidarity. “We need other partners,” he said. “Partnering with the private sector, the World Bank and financial institutions is a multiplier of solidarity. In today’s world, that is gold.”

In 2015, the World Economic Forum began working with leaders from across sectors to develop a coherent conversation around humanitarian issues, starting at the 2016 Annual Meeting. This year, the Annual Meeting’s humanitarian programme seeks to inspire future-looking analysis to inform policies and interventions on issues such as the role of technology, data and connectivity as well as education, skills and innovative financing. Many of these efforts are driven by the Global Future Councils on the Humanitarian System and on Migration. In so doing, our goal is to mobilize a public-private community of practice to scale solutions and gain clarity on key challenges and opportunities that will disrupt the humanitarian and migration systems in the coming 10-15 years.

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