May 23, 2016 / 10:42 AM / a year ago

Aid efficiency bargain could save $1 billion per year: EU VP

Kristalina Georgieva, European Commissioner for Budget and Human Resources, attends a conference on the official launch of the report of High-Level Panel on Humanitarian Financing, in Dubai in this file photo dated January 17, 2016. REUTERS/Ashraf Mohammad

ISTANBUL (Thomson Reuters Foundation) - Major aid donors and large humanitarian agencies are hoping to find at least $1 billion a year in savings by working more efficiently over the next five years, money that could be used to help people hit by war and disasters, a top EU official said.

In a “Grand Bargain”, struck to help shrink an annual funding gap for emergency response estimated at $15 billion, 21 donor governments and 16 agencies pledged at the World Humanitarian Summit on Monday to cut inefficiencies and streamline the way aid is provided.

“The main purpose ... is to move more resources into the hands of people in need, and have less spent in the back room of humanitarian organizations by using more effective ways of working, like shifting to cash, working with local organizations that are... faster, quicker, better, (and) reducing overlaps,” Kristalina Georgieva, European Commission Vice-President for Budget and Human Resources, told the Thomson Reuters Foundation.

Georgieva, who co-chaired a panel that produced a flagship report on boosting humanitarian financing earlier this year, said new sources of financing, such as Islamic “sukuk” bonds and emerging-economy governments would also help plug the gap.

“We have to broaden the base,” she said in an interview late on Sunday. The private sector, that funds only about 5 percent of humanitarian aid today, should play a bigger role, she said.

“Make it possible for them to come not as philanthropy but for what they are good (at), tap into their business capabilities,” she added.

The Grand Bargain, which contains 51 commitments, also puts responsibility on government donors to make their funding more flexible, by earmarking less and allowing 30 percent of it to be used in any crisis by 2020.

And they will aim to provide predictable money over a longer period, compared with the annual funding cycles common now.

SIMPLE RULES

Georgieva said agencies would team up to do assessments of needs in places hit by conflicts and natural disasters to reduce the burden on local communities, and buy supplies jointly.

And donors will streamline their systems for aid groups to apply for and receive funding, she added.

“The simpler it is, the easier it is to implement, and the easier it is to present it to the public, to be transparent,” Georgieva said.

Local and national aid agencies have welcomed a commitment in the Grand Bargain to give a quarter of humanitarian funding directly to them by 2020, up from just 2.5 percent now.

But some have complained they were not included in drafting the deal, and say they must be included in implementing it.

“We need to ensure that proper representation of local, national NGOs and southern governments are in this Grand Bargain process so that recommendations on how to implement this target can be based on reality,” said Degan Ali, executive director of African development NGO Adeso.

Reporting by Megan Rowling; additional reporting by Dasha Afanasieva; editing by Ros Russell. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit news.trust.org

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