Rethinking Humanitarian Aid to Conflict-Affected Countries

(Illustration by iStock/Victor Metelskiy)

In 2023, according to the Global Humanitarian Overview, aid organizations faced a $37 billion funding shortfall to help crisis-affected communities. Yet in that year, the World Bank’s International Development Assistance alone had pledged about a third of that amount to governments affected by fragility and conflict. Paradoxically, some of these governments contributed to the violence against their people.

Development aid to conflict-affected countries is like a complex water distribution system. Both multilateral development banks and humanitarian organizations rely largely on the same reservoirs of government funds. They increasingly help the same countries, but a lack of coordination leaves many communities in need. Those controlling the taps need to readjust the plumbing.

Same, Same, but Different: Multilateral Development Banks and Humanitarian Aid Actors

Multilateral development banks (MDBs) and humanitarian non-governmental organizations (NGOs) both aim to improve lives. The African Development Bank for example, seeks to promote sustainable economic growth and reduce poverty in Africa, while the International Red Cross focuses on protecting and assisting victims of armed conflict.

Yet MDBs and NGOs differ significantly in structure, modes of action, scale of ambition, and initial areas of focus. MDBs are institutions set up and managed by groups of countries to provide financial services and advice, funding large development projects of member governments through loans and grants. These projects typically take place in peaceful and lower to middle-income countries where poverty remains prevalent. Humanitarian NGOs, for their part, are defined by their independence from governments and the values of impartiality and neutrality. These traits help avoid politicization and enable direct access to support conflict-affected people in need.

The two sets of stakeholders have mostly ignored each other because of these differences. Yet change is afoot as poverty is increasingly concentrated precisely in conflict-affected countries. The World Bank estimates that 60 percent of the world’s extremely poor will live in such contexts by 2025. MDBs are slowly grappling with this reality. The Asian Development Bank for example recognizes in its 2030 strategy the distinct challenges brought about by “fragile and conflict-affected situations” and the need to prioritize and adapt its support. In the decade following 2010, the World Bank’s fund helping the world’s poorest countries committed a threefold increase to finance those bearing the additional burden of conflict.

Challenges and Contradictions

As MDB’s mandate to alleviate poverty increasingly pulls them into conflict-affected countries, a range of tension points and practical challenges have emerged. At its core lies a contradiction between those institutions’ aim to “do no harm” and their financing to governments often involved in the violence against their population. According to Oxford University’s “Solferino 21” project on war and humanitarian aid in the 21st century, most of that violence results in displacement and impoverishment. Paradoxically then, MDBs’ financing of governments at war is undermining their very efforts to tackle poverty.

Such an unpalatable reality has not escaped public scrutiny. Given heightened political sensitivities, governments sitting on MDB boards have increasingly severed ties with national authorities that came to power by force, in a dubious fashion, or that are under international sanction regimes. A Chatham House research paper found that in 2022, such “politically estranged settings” deprived nearly half of all people living in conflict-affected countries of most of MDB’s development assistance. Without continued nurturing and battered by violence, development relapses, and communities slip back into poverty.

Whilst MDBs are hesitant and often at a loss when entering into the moral and operational swamps of conflict-affected countries, NGOs have navigated these environments for decades. Violence, humanitarian needs, as well as the volatility, uncertainty, complexity, and ambiguity of conflicts have shaped these organizations’ structures and ways of operating.

Conflict dynamics and the nature of needs generated are evolving, however, with cycles of violence lasting decades becoming the norm. Their cumulative impact on public services, systems, and infrastructures, as well as communities and their means of survival is deepening. The International Red Cross has, for example, spent most of its budget on recurring conflicts in the same contexts for the past 40 years, all the while responding in parallel to new crises.

As humanitarian needs have expanded, the necessary increase in funding has not kept pace. The Global Humanitarian Assistance Report from Development Initiatives, a think tank analyzing data and evidence to inform the aid sector’s efforts, has been documenting with mounting concern the widening gap between available financing and the number of people in need.

Some MDBs have attempted to channel grants through humanitarian actors rather than through violence-tainted governments. Unfortunately, such efforts have remained restricted given these banks’ mindset and processes. Governments engaged in conflict remain MDB members and typically oppose the freezing or diversion of their development funds to humanitarian actors. Other governments on the same boards feel ill-at-ease withholding or diverting financing from peers, as such censure clashes with the technocratic, apolitical, and consensual culture of MDBs. For bank staff in conflict-affected member countries, providing a frank analysis and suggesting grant money initially destined for their host government should instead go to humanitarian organizations takes personal courage and a professional leap of faith. Investing in conflict-ridden environments is already a gamble for risk-averse banks, having to do so via the uncharted conduit of humanitarian channels is nerve-wracking.

Faced with this conundrum, the cautious approach taken by some MDBs has been to hedge their bets. They have limited the volume of tentative financing efforts to humanitarians, coating them in additional, cumbersome layers of procedural safeguards. This increases the costs of action and stifles the nimbleness required to operate in conflict-affected countries.

The United Nations has emerged among the only organizations with a solid enough bureaucracy to stomach such red tape. Though some of its agencies are capable crisis responders, they should be seen only as part of the solution. Indeed, the UN shares MDBs’ political shackles: they represent the will of governments and are bound by politics. In conflict-affected countries, they are therefore often considered biased, limiting their access to people in need.

The case of Afghanistan’s secondary health care services provides a useful example of the failure of humanitarian and development efforts to overcome their interfacing challenges to the benefit of people in need. Following the Islamic Emirate of Afghanistan’s takeover in August 2021, development agencies and international financial institutions halted funding, disrupting numerous vital infrastructure projects. This particularly affected the health sector, a domain where development aid was approximately six times the government’s expenditure. To avert the collapse of the secondary health care system, an international not-for-profit initiated a project to support 33 hospitals, serving approximately 26 million people. Whilst the straightforward and logical approach would have been for MDBs to switch over their support from the government to this neutral and independent charity, this was not the case. Instead, anguish and dithering translated into halting and complex negotiations around the feasibility of and safeguards needed for purveying financing to the aid responder, gradually adding layer upon layer of unrealistic (and costly) red tape prior to considering any support. Following months of indecision, deal efforts eventually broke down and the charity reverted to financing its support to the 33 hospitals from traditional funding sources, paradoxically enough, essentially the same underlying donors as those of the MDBs. The nature of these funds and the scale of the financing required to keep a lifeline to those hospitals meant, however, that the support could only be a temporary, stop-gap measure to cushion the blow of the sudden cut of development assistance. With the eventual overall decrease in funding for humanitarian assistance after 2022, aid had to switch back to more immediate relief efforts only, thus helping create, as coined by Human Rights Watch, an NGO that conducts research and advocacy on human rights, “a disaster for the foreseeable future.”

Possible Solutions

What is to be done? Conflict-affected communities deserve support. Yet many of their governments are, at best, disinterested in meeting their basic needs; humanitarians are cash-strapped; and MDBs are hesitant about how to deploy their available funds.

A decisive jolt by donor governments providing most of the funding to NGOs and MDBs could be the solution. They should pressure humanitarians towards due diligence improvements, following which they could request development banks to entrust them with funding in certain settings. A vetting process, building on existing due diligence requirements of major government humanitarian aid donors such as the European Commission Humanitarian Aid and Civil Protection and integrating some from MDB’s practices could be a way forward. An already existing alternative could be to use the assessment system developed by the Multilateral Organization Performance Assessment Network (MOPAN). MOPAN is an independent network of 22 member states dedicated to improving the performance of the multilateral system. Together, they provide some $100 billion in annual contributions to and through the multilateral system. MOPAN would thus arguably be well-positioned to support such an initiative since it strives to push for greater effectiveness in the multilateral system. Regularly renewed, the assessments would provide a standardized and agreed “know your customer” baseline of requirements for potential recipient NGOs. The ones aspiring to widen their funding sources would have to ensure conformity with what would likely be slightly more stringent procedures and safeguards than might be customarily required from purely humanitarian donors. This harmonized vetting at the organizational level would however diminish transaction costs of what prevails today: lengthy MDB-specific and project-by-project diagnoses and negotiations of funding eligibility.

Going a step further, MDBs could identify triggers, such as the number of displaced, battle casualties, etc., that objectively qualify when a country tips over into conflict. When tripped, such factual, apolitical, and pre-agreed criteria would redirect some of a country’s development grants. They could be channeled to already existing but generally underfunded country-based financing pools for humanitarian responses and/or previously vetted NGOs. This step would need substantial negotiations between board members of MDBs, who could be expected to polarize around the notion of a systematic diversion of funds away from recipient government coffers. Consensus amongst countries providing most of the initial funding to those MDBs would be needed to exercise the required political pressure in their governance. Clear and measurable indicators as to when the “exceptional financing” would revert to its normal, governmental channels may also help overcome reluctance. Finding an acceptable balance as to the proportion of funds to freeze until disbursement to a government can be resumed, versus those to redirect to humanitarian NGOs could be a further area of compromise.

A funding surge at the earliest signs of a crisis would allow for quicker aid responses of the scale needed, which makes sense ethically and financially, even if it remains challenging to quantify. There is no question about the value of human lives saved and suffering reduced. Calculating the cost-effectiveness of investment in early action remains difficult, however. A 2018 UK Government’s Department for International Development report suggests significant cost savings, similar to the 30 percent found by the World Bank when analyzing early action on food security crises.

Providing a better collective response to those suffering from the double scourge of conflict and poverty is possible. Efforts are already afoot, some mechanisms exist—fixing and upgrading the plumbing of the international aid system is feasible. What is needed is a concerted will to adapt the multilateral aid system by prodding it a step further, for which decisive and coordinated action is essential. Donor governments must lead the charge to bridge the gap between humanitarian needs and available resources. The time for decisive action is now.

Read more stories by Christian Wabnitz.