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The $90Bn Question: Can we reach 700 million people in response to COVID-19?

5 May 2020 — By Sophie Tholstrup, Karen Peachey

As COVID-19 impacts on the health, livelihoods and wellbeing of people around the world, governments and societies are faced with impossible choices. The impacts on the world’s most vulnerable are starting to bite, with an estimated 130 million additional people facing acute food insecurity by the end of 2020, and projections showing that the economic fallout of the pandemic could push up to half a billion people into poverty.

Last week the Emergency Relief Coordinator (ERC) called on rich country governments and International Financial Institutions (IFIs) for a $90Bn COVID recovery package targeting 700 million vulnerable people around the globe. The ERC – along with the UN Secretary-General – called for much of this to be delivered through cash transfers as the only way to ensure basic needs are met at scale while kick-starting economic recovery

We met with a small group of CaLP members and asked the $90Bn question – what would cash transfers at this scale look like? How would governments, IFIs, development organisations, humanitarians and private sector actors work together to reach 700 million of the world’s most vulnerable people?

They said:

Using cash as the major part of the response is a no-brainer. 

Cash is the only way to rapidly meet basic needs while supporting livelihoods, local markets and economic recovery. We’ve seen strong advocacy across contexts to ensure cash is a major part of the COVID-19 response. Getting people what they need will be a multi-pronged approach. Other types of assistance will be needed – with support to healthcare systems and in-kind assistance where markets are not functioning – and responses will look different in different contexts. But cash transfers at scale should be the go-to approach.

Humanitarian action at this time should not make it harder for traders to resume operations or for small businesses to reopen. Returning to conventional methods of aid delivery, such as internationally shipping and delivering in-kind food aid, will only serve to lengthen the impact of the economic crisis” (Markets In Crises)

National governments should be in the lead

Wherever possible this assistance should be channeled through governments. We’ve seen rapid scaleup of social protection measures across the globe in response to the COVID-19 pandemic, benefiting an estimated 1.4 billion people. As of April 23, a total of 151 countries have planned, introduced or adapted 684 social protection measures in response to COVID-19, one third of which are delivered through cash transfers. Of those 151 countries,  78 are implementing cash transfers for the first time in response to COVID-19. But we know that in many of the most vulnerable countries, social safety nets don’t cover all of those at risk. In low income countries prior to this crisis only 20% of the poorest were covered by safety net programmes. Even where robust systems exist, rapid vertical and horizontal expansion is challenging. In most high-risk contexts, social protection systems will need to be complemented and backed up by other systems, including by development and humanitarian actors.

There has been lots of excellent thinking on the need for humanitarian actors to work in tandem with governments to mitigate the impacts of the pandemic (see this advocacy note from the CCD, this series from SocialProtection.org and a forthcoming technical paper from the Grand Bargain cash subgroup on linking social protection and humanitarian cash transfers along with this webinar the sub group co-hosted with CaLP. In all cases,  the key ask is that – where appropriate – the cash response of humanitarian organisations consciously aligns with, builds on, complements and fills gaps in government social protection programmes and systems,  taking into account humanitarian principles, to mitigate the socio-economic impacts of COVID-19 on the most vulnerable and leaving no one behind. 

Use existing financial infrastructure where possible,

In some contexts, many people in need are already connected to financial infrastructure and working with private sector actors to deliver assistance will be critical. Financial service providers (FSPs) – both the traditional banking system, remittance channels and mobile money providers – play a key role in humanitarian cash transfers and other financial flows to crisis-affected people

The number of people with access to mobile money is expanding rapidly in the poorest countries. GSMA estimates that 21% of adults across Sub-Saharan Africa have a mobile money account, rising to 66% in Kenya, Rwanda, Tanzania and Uganda and 73% in Somalia. GSMA expects that by the end of 2020 there will be 725 million individual mobile money users across Sub-Saharan Africa. 

Many countries in crisis are heavily reliant on remittances. Roughly half of all Somali households rely on remittances to cover basic needs. In 2018, Yemen received $3.35Bn in remittances  that made up more than 12% of GDP. The World Bank predicts a 20% drop in remittances in 2020, rising to 23% in Sub-Saharan Africa. Remittance channels could be a rapid and effective way to deliver cash in some contexts, which may have the added benefit of supporting these critical lifelines to continue functioning through this crisis.

Humanitarian actors and financial service providers are already working together to deliver assistance in most crisis contexts, with efforts under way to prepare for scale-up in response to the COVID-19 pandemic. In West Africa, for example, humanitarian actors have worked with private sector partners to produce a comprehensive mapping of financial service providers, services offered and costs in high risk areas. In Jordan, humanitarian actors are working with FSPs to address liquidity and access constraints with innovative approaches such as money exchanges, door-to-door distributions, and direct home delivery by local shops being explored alongside mobile money. In MENA, humanitarian cash actors have developed guidance on how to work with FSPs given current liquidity and access constraints.

While digital delivery may be more efficient, reduce transmission risks and promote financial inclusion, we must also be conscious of excluding the most vulnerable people and of widening existing digital divides. In low income countries, only 56 percent of people own a mobile phone  and “the offline population remains disproportionately poor, rural, elderly, and female… Globally, refugees are 50 percent less likely than the general population to have an internet-enabled phone.”

Humanitarian actors have a key role to play

So where – in this massive response – would humanitarian actors come in? Humanitarian actors currently deliver $4.7Bn each year in cash and vouchers to crisis-affected people in almost every crisis context, and these delivery channels could be rapidly leveraged to deliver cash to those out of reach of government systems. Many humanitarian cash programmes are already being rapidly scaled up to meet needs from this crisis, with actors across contexts extending existing cash programmes to reach newly-affected people and, in some cases, to switch existing programmes to cash. In Jordan, for example, humanitarian actors have worked quickly with the government to identify an expanded target population and to coordinate which actor will deliver assistance to which caseload. At the same time, humanitarian actors are rapidly figuring out how to adapt cash programmes and mitigate new risks in light of the crisis. There was a strong emphasis during our discussions on the need for humanitarian actors to ensure inclusive responses in which marginalised groups – in particular refugees and migrants – are not left behind.

The role that humanitarian actors play will differ from context to context, and we’ll need to move fast to understand what this will look like in different responses. But what is clear is that we can’t approach this as we would a normal response, planning on an agency-by-agency basis. This needs to be a tightly coordinated response, leveraging the capacities that exist and working much more closely with other actors – humanitarians, governments, private sector and development actors.

Responding to this crisis gives us an opportunity to speed up long overdue reforms. In responses where assistance is being delivered remotely and movement restrictions are in place, it is vital that we tackle consistent weaknesses in the way we communicate about assistance and that we seek and respond to feedback from recipients. Local humanitarian actors will play a critical role in working with government-led programmes to maximise reach and ensure effective and contextually appropriate responses.

There are several outstanding issues to address

One critical issue is targeting, and how to identify and reach recipients quickly and safely, often combining data from multiple sources. The question of how and by whom beneficiary lists are collected, consolidated, shared and owned in joint responses is complex. Consolidated beneficiary information will be critical to delivering at scale, both in terms of ensuring comprehensive coverage and in terms of data security and governance. This must be done in a way that ensures data protection and – in particular in conflict contexts – does not expose individuals to potential harm.

Understanding where and how markets are functioning, and where vulnerable people have access to them is another key issue. We know that markets are extremely resilient. While having detailed market assessments in place should not be a necessary precondition to delivering emergency cash assistance, any cash interventions should be grounded in an overall understanding of how markets are operating. Research in twelve crisis affected contexts shows the pandemic has had significant, immediate effects on marketplaces and supply chains globally. Markets in nearly all monitored humanitarian contexts have remained operational throughout the COVID-19 pandemic. However, restrictions on both cross-border and internal movement have produced shortages of key commodities in many humanitarian crises, which have in turn led to short-term availability issues and price increases at all levels of the supply chain. Careful monitoring will be needed over time.

What next?

This discussion aimed to provide a basis for further thought and development across the CaLP network. There are huge questions which remain to be addressed. We – as a whole system, working across governments, IFIs and humanitarian actors – have never done anything like this before and doing so demands radically different thinking and ways of working together.  In practice this is difficult as the humanitarian system is competitive and our actions are often bounded by agency mandates and interests. It will take insights and thinking from across the network to understand how this could play out in different contexts and what the role of humanitarian cash actors could be.

The question we face is whether, in unprecedented times, we can work together – with one goal – to respond to the priorities of people in crisis. The nature and scale of this challenge requires us to shift our approaches to more collective action. Cross-sector, multi-stakeholder collaboration will best support large-scale change, which will mean planning and responding collectively, not as individual organisations. This does not mean everyone does everything or that we are all needed in each context. Rather, we need to commit to a shared goal, working out what is needed and who is best placed to achieve that goal in each situation. 

To repeat, this is perhaps the biggest and most urgent challenge the humanitarian system has faced to date, and we know that changes to the ways we work are needed in order to meet it.  We also know that even bigger challenges are coming our way, most notably the impacts of climate change, and that we need to be fit to respond. Humanitarians have underscored the need to work differently – more collectively, with governments, local actors and the private sector, with recipients truly at the centre – for many years. Is now the moment when we make this happen?

 

 

Main image credit: GMB Akash – Oxfam