A forthcoming review of the emergency aid sector could help drive much-needed systemic change, suggests Howard Sharman

 

Put March 28th in your diaries now.

 

That’s the date that DFID’s Humanitarian Emergency Response Review (also known as HERR, otherwise known as the Ashdown Committee) will be submitting its recommendations.

 

It could be a real red-letter day for those involved in the provision of emergency relief.

 

We have no doubt that the way that we currently do things has to change and Ashdown has the ability, and the remit, to deliver change.

 

In its submission to HERR, Advance Aid reminded the committee that, due to market failures in the procurement and logistics models, the $250 million spent annually on buying non-food items for use by displaced African families is overwhelmingly spent outside the continent, chiefly in East and South Asia.

 

But if these market failures were to be resolved, this spending could provide sustainable economic opportunities for African firms and generate over 60,000 private sector jobs (to support as many as 450,000 livelihoods).

 

There might, of course, be some job losses in East and South Asia if this $250m of orders were moved to Africa, but sub-Saharan Africa’s need is so much greater, this would be a net gain for global development and Africa could get the development benefit of the money spent on sending it emergency relief goods.

 

Earlier reviews show some progress

 

DFID’s first two reviews – into which countries we will continue to give aid to, and which UN organisations we will continue to support – reported earlier this month and came out with some quite robust recommendations.

 

You can read about them here.

 

Most notably, these reviews made proposals for real change. Some countries will stop getting aid from the UK, others (more needy) will get more.

 

Four UN organisations will be cut off from UK funding altogether and four more have been put into ‘special measures’.

 

This is quite radical stuff and these recommendations came from internal review teams. HERR, chaired by Lord (Paddy) Ashdown, is different in that it is an external review, it has consulted widely and it could come up with something really game-changing.

 

One of the things that Advance Aid, as a ‘middle’ organisation is focusing on is bringing some commercial savvy and expertise to bear on how an NGO operates.

 

So what we are currently trying to do, in a small way, is re-work the relationship between buyers and sellers in the market for emergency relief goods (non-food items) in East Africa.

 

What we have here at the moment is a dysfunctional market. I think that everyone knows that it doesn’t work well – everyone being the donors who provide the funding, the NGOs who do the buying and the manufacturers who do the selling – but no one appears to be able (or willing) to do anything about it.

 

The sums of money involved are not trivial - $250m a year for things like tarpaulins, mosquito nets, blankets, buckets, kitchen sets and hygiene kits.

 

OK, it’s a drop in the ocean compared to the amount spent on Toyota Landcruisers (of which, maybe, more in a subsequent View from the Middle), but it’s still quite serious money.

 

The markets are failing in the following ways:

 

  • The money needed to buy these goods is in the wrong place at the wrong time. There’s masses of cash available once a disaster has happened, but very little provided in advance so that people (and governments) can prepare for disasters;
     
  • Such goods as are pre-positioned in stockpiles are also generally in the wrong places and so are not as rapidly available to help people as they might be

 

The impact of these market failures does not work to the benefit of the people affected by a disaster who get relief materials later than they should do – and some of these materials are likely to be of a lower quality than they deserve. There’s no doubt that this costs lives and leads to greater damage to livelihoods.

 

It does not work to the benefit of the tax-payers in the donor countries as considerable sums of money are wasted through poor procurement decisions, and extremely expensive air transport costs (because goods were not bought in advance of the disaster and to have to be rushed in to save lives).

 

It does not work to the benefit of the NGOs, all of whom have to go shopping at the same time for the same goods with the inevitable result that prices rise and product quality falls.

 

It certainly does not work to the benefit of African manufacturers who get their hands on hardly any of the orders for goods that are supplied to displaced Africans.

 

It does benefit medium to large sized companies in South and South-East Asia (not to mention some in Europe and North America) who can afford to hold stocks in their warehouses against an emergency – and guess who picks up the bill for this stockholding (Clue – it’s not the owners of, or shareholders in, these companies)?

 

So keep an eye out for Lord Ashdown’s report on March 28th. If the committee begins to get to grips with these problems, it could be an important day. A day when things begin to change.

 

Howard Sharman (howard.sharman@advanceaid.org) is a senior consultant with Advance Aid (http://www.advanceaid.org)

 



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