Learning from cash responses to the tsunami

Working and discussion papers
January 2007
Lesley Adams

This report by the ODI tsunami cash learning project follows earlier ODI research on emergency cash transfers (summarized in Harvey 2005). Since the publication of ODI’s 2001 review (Peppiat et al. 2001) cash transfers have become much more common in disaster recovery and chronic emergencies and now feature as a core component of many safety net systems. The overwhelming majority of reviews demonstrate that cash is an effective resource transfer option in many contexts. The tsunami disaster was an opportunity for agencies to implement cash transfers for two main reasons: first, because of the considerable level of unrestricted donor funding, which gave agencies the flexibility to innovate; and, second, because early and unequivocal signs of market recovery gave agencies the confidence to make cash a central element of recovery. This project set out to record the experiences of agencies implementing cash-based interventions, and their results, and to develop guidelines for future emergency cash interventions. The project covers tsunami interventions in Aceh, Indonesia, Sri Lanka and India.

The nature of the tsunami disaster—in comparison with other disasters—was an important influence on the approach of some agencies. While press and agency assessments focused on the devastation, one observer highlighted also the limits to the destruction—that away from the coastal strip there was ‘a sizeable, vibrant, remaining society with substantial  resources and resilience […] from which the true recovery will inevitably actually be built’ (Curran and Leonard 2005). The authors argue that the nature and context of the tsunami disaster presented real opportunities for an efficient, effective and decentralised approach to recovery: supporting communities’ own initiatives and abilities – which they termed ‘emergence’. This philosophy influenced the strategy of Mercy Corps (MC) in Aceh and providing cash instead of in-kind goods was a key element of the agency’s recovery approach. Cash also supported communities that had been indirectly affected—where people had not lost assets, but had suffered economically through a loss of markets for products and services or increased responsibilities for other people.

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