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Refugees Magazine Issue 102 (The high cost of caring) - Minding your money

Refugees Magazine Issue 102 (The high cost of caring) - Minding your money
Refugees (102, IV - 1995)

1 December 1995
Donor countries can no longer afford to be as generous as they once were, and humanitarian organizations are among the first to feel the pinch.

Donor countries can no longer afford to be as generous as they once were, and humanitarian organizations are among the first to feel the pinch.

By Christiane Berthiaume

The current financial crisis facing the United Nations has set alarm bells ringing in humanitarian agencies worldwide.

The message is simple but dead serious: Donor countries can no longer afford to be as generous as they once were, and humanitarian programmes are going to be among the first to feel the pinch.

"Many heavily indebted donor countries are reduced to taking painful decisions to cut their spending," said Ernest Chipman, head of UNHCR's Fund-Raising Service. "Naturally, the cuts affect everybody and all sectors - defense, social spending and so on - but they hit humanitarian aid the hardest. These (humanitarian aid) cuts do not hurt voters. They do not eliminate any domestic jobs."

As a result, funding flows are slowly diminishing at a time when needs remain high.

In a post-Cold War era marked by ethnic and civil strife in many places around the world, the need for humanitarian programmes aiding refugees, displaced people, war-affected populations and others is as great as ever.

And although UNHCR has not been directly affected by these cuts as yet, there are no guarantees that voluntary contributions from donor governments will continue at the required levels.

But even if UNHCR itself has not been hit, the agency does not operate in a vacuum. Anything that affects humanitarian relief and development programmes also - eventually - will affect it.

Last November in New York, High Commissioner for Refugees Sadako Ogata warned in an address to the U.N. Security Council that cutbacks in humanitarian aid would only aggravate the conditions that trigger large-scale population movements. "I am worried about the trend to cut official development assistance," Ogata said. "There is a very clear link between poverty, inequitable distribution of resources, violence and rapid movement of people."

In the last five years, the number of persons of concern to UNHCR has jumped from 17 million to 27 million worldwide. Expenditures have increased accordingly, rising from $544 million in 1990 to an estimated $1.3 billion in 1995.

"We are at a maximum level," Chipman said of the 1995 figure. "It is difficult to imagine that donor countries will agree to increase contributions any further in the future."

The budget began its extraordinary growth with the Gulf War exodus of Kurds in 1991. Then came former Yugoslavia - with more than 3.5 million new beneficiaries - and UNHCR's budget topped the billion-dollar mark for the first time in 1992. It has remained above $1 billion each year since then.

The United States is the largest contributor to UNHCR, followed closely by the European Commission - the only donor whose contributions have steadily increased over the past two years.

It is becoming increasingly difficult to find new funding sources. UNHCR's efforts to persuade Gulf Arab states, for example, to provide more for refugees have yet to produce many substantial results. One reason: Arab countries have traditionally preferred bilateral aid programmes.

Another new area being explored is private sector fund-raising, where UNHCR is a relative newcomer and has so far played only a limited role.

"For the time being, we are getting by," says Chipman. "We've managed to meet our operating budgets until now. We have experienced momentary crises in specific programmes - temporary shortages in 1995 for Georgia and Azerbaijan, for example - but ultimately, by year's end, we've always managed to fund everything, or almost everything."

But UNHCR is going to have to redouble its efforts if it is to keep up this pace, Chipman said. "We have to work harder to get the same results, not only because donor countries are tempted to cut their humanitarian spending, but also because they are allocating their funds differently," he said.

Requests and appeals for international donor support are coming from all directions and for a variety of humanitarian needs ranging from natural disasters to health programmes to major development projects in poor countries.

"The donor countries' humanitarian outlays have remained relatively stable over the past few years," said Chipman. "What has changed is the amount of resources earmarked for the different sectors. Today, the donor countries provide more funding for crisis situations than for development. This ratio has become more favourable to the emergency situations to which UNHCR responds. But is this a good thing? Naturally, more funds - necessary funds - are being provided to save lives, but to the detriment of efforts to fight poverty."

As logic would have it, this means that the various humanitarian aid actors are competing harder to obtain the necessary funding to cover their operating needs.

"Competition today is much stiffer than before, not only because the level of resources has remained the same while the number of crises has grown, but also because there are many more actors on the humanitarian scene today than before," explained Filippo Grandi, from UNHCR's Fund-Raising Service.

Stable contributions from donor countries account for one-third of UNHCR's budget. The remaining two-thirds come from discretionary budgetary sources. "Here, in the discretionary area, we are competing head on," Chipman said. "Today, there are a lot of people knocking on the same doors."

With a budget of $1.5 billion, the World Food Programme (WFP) distributed 3 million tons of food to 57 million people in 1994, saving countless lives. Francesco Strippoli, chief of WFP's Resources Mobilization Service for Europe, Africa and the Middle East, said, "we have to hunt funds a lot more aggressively. For us, fewer resources can often be a question of life or death; our programmes target people who suffer from hunger or thirst."

Competition for the available funding is more intense among NGOs than among U.N. agencies, "since our operations are complementary for the most part," Chipman said.

Some donor countries are tempted to give funding priority to their own national NGOs. Money spent in this way creates jobs and can boost domestic political support. Humanitarian funds thus have an impact on domestic politics.

"This is a new trend which some observers call 'humanitarian nationalism'," said Grandi. "Governments get more political mileage out of funding local NGOs than they do for contributions to multilateral organizations where everything is lumped together. Funding a national NGO's programme thus has the benefit of protecting jobs and possibly generating votes - something UNHCR cannot offer."

This trend is commonplace in the United States, and is particularly pronounced in Europe, where unemployment is a big problem.

At first glance, the donor countries' reasoning seems logical: why not fund NGOs directly rather than going through an intermediary, like UNHCR, which eventually calls on NGOs to do most of the actual implementation of programmes anyway?

"The 'plus' we offer is our coordinating work and our protection mandate," said Grandi, who speaks from experience. He was one of the first UNHCR staff to arrive in Goma, Zaire, in 1994 when more than 1 million Rwandans flooded across the border in the worst refugee crisis the agency has ever faced in Africa.

"There were lots of humanitarian organizations, of all different kinds, in Goma; good ones, mediocre ones, bad ones, but all full of good will," Grandi said. "UNHCR's coordinating role was vital in trying to contain a major disaster, in this case a cholera epidemic which claimed thousands of lives in the days immediately following the influx.

"Only an experienced coordinator can avoid duplication of efforts and ensure that the needs of all are met. When this is not the case, organizations which work independently are capable of doing a great deal of damage - and sometimes do so."

"Humanitarian nationalism" also poses a threat to multilateralism. "Humanitarian aid must remain neutral and independent," said Grandi. "Multilateral organizations can do a better job of guaranteeing these principles than an NGO funded by a single donor."

Many non-governmental organizations, as a matter of policy, make sure that they do not rely too heavily on contributions from governments so that they can safeguard their independence.

All humanitarian organizations agree on one point: some operations are a lot harder to fund than others because donor countries respond more readily to high-profile programmes.

"It isn't hard to find funding for a crisis if CNN is covering it," explains Charles Lameunière, senior adviser in the World Health Organization's Division for Emergency and Humanitarian Affairs. "When it comes to lining up funding for a long-term solution, it's a lot harder. But it is just about impossible to find money for prevention activities. Once the crisis has been settled on paper, the funds diminish considerably. WHO is a technical agency, very different from UNHCR or ICRC which work in emergency situations. Asking for money to re-establish a health-care network in a country is not nearly as exciting."

However, even in organizations which do emergency work, such as UNHCR or WFP, some operations get more donor attention than others.

"Eight hundred million people throughout the world suffer from hunger," says WFP's Strippoli. "They need to be given sufficient water and food every day. This is vital. Yet the former Yugoslavia and Rwanda are eating up our funds. Precious little is left for what we call the silent emergencies."

It is much the same story at UNHCR, where it is sometimes difficult to generate donor interest in "forgotten causes" like Liberia, Sierra Leone, Ethiopia, Somalia and Afghanistan.

1994 Major Donors to UNHCR
(in millions of US $)
237European Commission
68United Kingdom
41Private Secotr, NGOs, U.N.
15Other Governments & International Organizations
TOTAL 1994 Contributions: $ 1,069,000

On the other hand, some programmes are more politically appealing than others, and can actually be over-funded. When this occurs, the excess funds are carried over for use during the following year. Over the past four years, for example, donor countries have been extremely generous in supporting UNHCR as the lead humanitarian agency in former Yugoslavia. Continuous media attention and the lack of any political solution for months on end combined to ensure that donor governments at least paid attention to the humanitarian needs of some 3.7 million beneficiaries of UNHCR programmes.

Other programmes are much more difficult to "sell" to donors, particularly those that are out of the media spotlight.

"In three years, we returned more than 1.6 million Mozambican refugees to a country which, after 16 years of devastating civil war, is now fighting to consolidate peace," said Grandi, who recently tried in vain to convince a donor country to transfer the few thousand dollars it had earmarked for the former Yugoslavia to the Mozambican programme.

"We only lack a few million dollars to complete our Mozambique programme, to bring the last refugees home, and we can't manage to come up with the money," he continued. "Yet it is a positive programme - one which holds out a hope of peace."

Assistance programmes for Afghan refugees have also suffered from a lack of donor interest in recent years.

"It has not always been like this - just since Afghanistan came off the front page and the Soviets pulled out," noted Grandi.

Despite the many obstacles, Chipman was confident that UNHCR would get enough funding for most of its operations.

"Ultimately, we should be able to fund all our projects," he said in early December. "The exceptions may be programmes in the Horn of Africa, our most difficult funding challenge."

With the withdrawal of U.S. troops, Somalia faded from the world's consciousness. "Unfortunately, donor countries see this region as a bottomless pit, a problem without a solution," Grandi said. "Admittedly, famine and insecurity still reign throughout the area. But ever since the superpowers stopped fighting proxy wars there, the Horn of Africa has been suffering from poverty rather than political problems."

UNHCR's difficulties in finding support for its operations in the five countries located in the Horn of Africa are tied not only to the perception of donor countries but also to reality in the field. Some critics believe the continuing presence of agencies like UNHCR has dragged on for too long, creating an aid-dependent society whose leaders have a vested interest in keeping the status quo.

Field operations must be particularly effective because for an organization like UNHCR, funding is directly linked to credibility, Chipman said. "Donor countries don't just give us money and shut their eyes," he said. "The more money we ask for, the more demanding they become. The media are there to help them differentiate between our 'good' and 'bad' operations. It's up to us to see to it that the funds allocated are used in the right place and in the right way, because governments are accountable to their taxpayers for the way in which funds are utilized. In short, we have to show that we are doing good work in the field, that we are not throwing money out the window and that the organization is run by a High Commissioner who is extremely tough when it comes to the efficiency of our operations, among other things."

But traditional emergency relief followed - preferrably - by repatriation are not enough. Returnees have to be given the means to reintegrate and rebuild their shattered lives. While UNHCR is having problems finding support for its long-term rehabilitation programmes, the situation is even worse for the development agencies.

Jean Fabre, deputy director of the European desk of the United Nations Development Programme (UNDP), said an increasing share of aid money is going to emergencies, and necessary long-term development suffers as a result.

"This is reflected by the sharpest drop in contributions since the organization was founded in 1965," Fabre said. "Our resources fell 10 percent between 1984 and 1992, and we experienced a further 10 percent drop in one year's time - between 1992 and 1993. We have been obliged to cut our programmes throughout the world by 30 percent.

"These cuts all represent lost opportunities," he continued. "In practical terms, this means, for example, that 4 million people living in 16 urban areas in Morocco will have to do without a drinking water project. In Djibouti, an anti-poverty programme was scrapped that would have benefited 135,000 people, including 65,000 women and 28,000 children living in an unstable area where demobilization and reintegration must be carried out. In Zaire, a $1.6 million AIDS programme was axed, while in Tanzania, a $14 million income-generating programme had to be dropped."

And things may get worse before they get better, Fabre said.

"In 1975, everyone was saying that governments should set aside 0.7 percent of GNP for official development assistance," he said. "Today, we have fallen below 0.3 percent, whereas the threshold for not only achieving solidarity among nations, but also managing our planet better, is 1.5 percent."

Money may fuel war, but it also fuels peace. "Governments are being short-sighted when they refuse to think about the long term, when they give so little priority to programmes capable of preventing new tragedies," Grandi said. "Unless we give the people we bring back to war-torn countries the means to restart their economic systems, we are heading straight for new crises."

Money invested in conflict prevention is money well spent. From a purely pragmatic standpoint, it is much less costly to prevent the outbreak of a crisis than, for example, calling on peace-keeping forces to arbitrate a conflict or rebuilding from scratch a country devastated by war. And the savings in human lives and suffering are incalculable.

In an October speech in Tokyo, Ogata suggested the establishment of a "third window" of funding in which humanitarian and development funds would be pooled. Until now, emergency programmes and development programmes have been viewed as two separate entities. But this two-track approach does not facilitate rapid reconstruction.

Ogata said a comprehensive, coordinated approach is required for both emergencies and development.

"We must mobilize all possible resources - human, financial and management - to meet the challenges of the 21st century."

Source: Refugees Magazine Issue 102 (1995)