The humanitarian response to the Syrian refugee crisis must not ignore the private sector

11 November 2013
Comment

The humanitarian response to the crisis in Syria and neighbouring countries has involved a range of forces and stakeholders, including diplomats, aid workers and civil servants. However the potential contribution of the business community – both globally and in affected countries – has been overlooked. During a series of recent interviews in Jordan, aid workers, donors and others seemed unsettled by the notion that businesses could play a role in the humanitarian response. One foreign aid official, when asked if the role of the private sector had arisen during an international event on assistance to Syrian refugees, noted: 'we were talking about humanitarian aid…it had nothing to do with business or the private sector'.

But business does, in fact, have a major role in the response. The tents, caravans, food, water and electricity being provided by international aid organisations to refugees in camps such as Za’atari is purchased from, with some exceptions, private businesses in Jordan and abroad. The cars aid agencies drive and the offices they rent are, again, generally rented from private firms. When the World Food Program (WFP) or UN Refugee Agency (UNHCR) transfer cash payments to refugees to enable them to buy food for their families, the funds are usually put on MasterCard debit cards by Jordanian and multinational banks.

Without private enterprise, the response to the Syrian refugee crisis in places like Jordan would be a shadow of its current size and complexity. Yet many international organisations continue to view its collaboration with business – where it is recognised and acknowledged – as something of an unfortunate bargain with unprincipled profiteers. Many decried the business community’s pursuit of profits, which were generally perceived as exorbitant; yet many in the Jordanian business community noted that their after-tax profits ranged from three to six per cent, significantly lower than many humanitarian organisations’ headquarters and overhead costs.

The lack of consideration and engagement with the private sector beyond traditional buyer-supplier relationships is, unfortunately, hindering aid efforts and reducing aid effectiveness in some instances. Many of the technological, engineering and logistical hurdles that aid agencies face can be addressed – whether on a commercial or charitable basis – by private firms in Jordan and elsewhere. Yet aid agencies had in most cases failed to tap business expertise, relying on them to provide basic services rather than pursuing more innovative forms of collaboration.

One NGO discussed how it could work to develop a mobile money transfer system despite the far greater capacity of large telecommunications firms in the region which had already dedicated technological expertise to developing such platforms – and, crucially, political clout to ensure the appropriate regulatory framework was in place. In another instance, a humanitarian organisation paid mobile phone companies to provide free SIM cards and text message plans to refugees, unaware that these companies had long been doing essentially the same – in order to gain customers – free of charge. That is, the aid companies offered to pay for something which was already in businesses’ financial interest to do for free.

Some good examples of humanitarian-private sector collaboration have emerged. Notable among these are UNHCR’s work with Cairo Amman Bank to introduce ATM cards to transfer cash to Syrian refugees to defray costs associated with, most notably, rental housing. The ATMs use iris scans to identify customers rather than traditional cards and PIN codes, thus allowing refugees to access their money in a secure way without having to keep track of a card and number. While it is a commercial arrangement for which the aid community pays the bank, transferring money in this cost-effective manner helps to control implementation costs, which would be far higher if aid workers had to provide new pre-paid debit cards on a regular basis.

More such examples should exist and can exist if aid agencies and businesses come together on a regular basis to better understand one another’s needs and capabilities. Such solutions would not involve wholly outsourcing or subcontracting businesses to deliver aid. Instead they could involve sharing expertise and inviting businesses to play a role, under the auspices of principled humanitarian agencies, where they have advantages. Doing so would not be novel, and it would not involve the 'privatisation' of aid as some have suggested. Instead it would require those in the aid community to acknowledge the extent to which they are, firstly, involved in a business themselves and, secondly, dependent upon the private sector for much of their important work.

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This blog post is based on a project on ‘Humanitarian crises, emergency preparedness & response: the roles of business and the private sector’ which HPG is undertaking in partnership with other research entities and international organisations.

Steven A. Zyck