By Kristina Diefenderfer
Humanitarian aid is a major source of support to jumpstart recovery processes in a post-disaster setting. In some cases, however, humanitarian aid hinders progress in long-term recovery processes. To understand the adverse effects that humanitarian aid can pose in a long-term capacity, a basic understanding of what comprises aid is pivotal. Humanitarian aid, noted from Gilles Carbonnier’s Humanitarian Market, is classified as:
disaster prevention and preparedness; the provision of shelter, food, water and sanitation, health services and other items of assistance for the benefit of affected people and to facilitate the return to normal lives and livelihoods; measures to promote and protect the safety, welfare, and dignity of civilians and those no longer taking part in hostilities and rehabilitation, reconstruction, and transition assistance while the emergency situation persists (Carbonnier).
Humanitarian aid parameters are especially salient when comparing different types of disasters that can affect an area.
Areas predisposed to poor economic conditions are also shown to be at a higher risk of being negatively affected by disaster.
Essentially, two categories of disaster exist, with various types of issues stemming from each respective category: socio-natural disasters and complex humanitarian emergencies. While the root causes of each type of disaster differ considerably, the economic ramifications are often quite similar; the area affected often becomes economically uprooted and disjointed. The World Bank 2020 Report dissects and elaborates on the economic ramifications of each type of disaster. From the perspective of natural disaster, the economic ramifications indicate that “[natural disasters] continue to destroy livelihoods, with the poorest and most vulnerable disproportionately impacted by these events” (World Bank, 2020). Furthermore, “[t]o alleviate extreme poverty more broadly, we need more and better data, especially from the poorest countries and those affected by fragility and conflict … The Bank Group’s Data for Policy initiative supports a core set of economic, social and sustainability statistics that are required to monitor and evaluate public policies and programs” (World Bank, 2020).
To discuss further, the post-disaster setting is a precarious time in which the dichotomy of a decreased economic climate intersects with varying levels of resilience. Terry Clower’s report discussing the divides between resilience and economy indicates the growing rift of economic standing and the subsequent reliance on aid. In a preliminary sense, “[t]he resilience a given economy has to disaster events is, of course, largely dependent on national resources committed to mitigation, planning and response” (Clower). However, collected macroeconomic analyses often miss regional and local impacts that “create comparative winners and losers” when a disaster affects an area, which consequently glosses over the vulnerabilities seen across a population’s differing income levels (Clower). In other words, taking a sweeping viewpoint of economic consequences of disaster does not display the economic issues felt by localized communities in post-disaster recovery, as disasters do not affect all involved equally.
Subsequently, the ever-present humanitarian response presents distortive side effects in the Sudanese recovery.
Put succinctly, current capacities of humanitarian aid distort economies in disaster-affected areas, leaving disadvantaged areas at higher risk of remaining in a cycle of poverty and subsequently reliant on aid; an overview of relevant terminology, along with case studies of a complex humanitarian in Sudan and natural disaster in Pakistan provide foundations to extrapolate the issues with humanitarian aid and actions formulating to revise humanitarian aid practices. Humanitarian networks formulate the global dialogue regarding the steps needed to begin this process of market awareness in humanitarian assistance measures. However, insight from a multi-dimensional approach such as the aforementioned terminology, case studies, and discussion allow for a focus towards a state’s long-term goals and economic independence in the wake of a disaster.
II. Reference Points and Terminology
Providing a foundation to the various terms and concepts is crucial to understand the scope of humanitarian aid and resilience in the long term. Prior to dissecting specifics, four major concepts formulate the basis to extrapolate the issues stemming from humanitarian aid. In the context of post conflict/disaster, humanitarian economics translates into the concept of “supply and demand” in the scope of humanitarian economics.
Specifically, Carbonnier describes the humanitarian economics pendulum in the scope of organizations, need for aid, and their linkage:
[i]n a self-serving mode, demand tends to be equated with humanitarian organizations’ ex-ante appeals for funds—notably UN-coordinated appeals—and ex-post operational reports and financial statements. The multilateral humanitarian system has embraced the programme cycle logic whereby needs assessments lead to the design of aid programmes, which in turn determine resource mobilization (Carbonnier).
Essentially, the supply and demand structure of humanitarian aid revolves around demand caused by disaster, and the supply available through humanitarian assistance.
Due to the long-term nature of the conflict, short-term humanitarian aid holds a long-term presence in the Sudan.
Humanitarian aid in this standard “supply and demand” structure enables ties of afflicted areas to aid by proxy of market disruptions, preventing long lasting economic independence supporting recovery in future disasters. Furthermore, market distortions present a guide in understanding the larger connections between humanitarian aid and the ramifications towards on economic resilience. Market distortions represent “significant gaps” between market prices and their actual value; furthermore, the distortions are based on “inefficient flows” of capital, rather than intentional actions leading to price-value gaps in an effort to disrupt an economic system (Market Distortions, Systemic Risk and Systematic Value). Essentially, market distortions exemplify the crevices between price actuality and distorted values, indicating a larger issue affecting the economic health within a state.
This is further explained with Kakazu explaining the unbalanced growth theory associated with market distortions, which:
implicitly assumes that the greater external economy through linkage effect will induce greater cost and price reductions so that, in the long run, strategic industry will become competitive in the international market. The validity of this assumption, however, depends to a large extend on the “responsiveness of private enterprise in the underdeveloped countries to a disequilibrium situation with profitable opportunities of increasing investment” (Kakazu, 1976)
Overall, these explanations of market distortions provide a foundation to conceptualize the larger consequence of humanitarian aid on the economic resilience capacities of affected communities.
Field observers have recognized the challenges involving humanitarian aid and its linkage to market distortion. Regarding aid roles in localized economic distortion, “a large body of evidence has been established for two decades around the distortions that large aid flow could generate. So called ‘Dutch Disease’ effects, involving increases in real exchange rates, domestic inflation and economic growth slowdown have been well documented and analyzed by economics” (Levy, 2016). Incorporating these two components together in turn translates into economic distortion stemming from humanitarian aid demand based on the presence of a socio-natural disaster or complex humanitarian emergency. Thus brings the concept of the “dependency theory,” or simply put, a dependency on aid in the aftermath of a disaster.
Conversely, Pakistan’s case study profile provides an example of the economic distortions caused by humanitarian aid in a natural disaster setting.
Different definitions based on the different theories in International Relations emerge, but a core sentiment appears: “[Dependency is]… a historical condition which shapes a certain structure of the world economy such that it favors some countries to the detriment of others and limits the development possibility of subordinate economics… a situation in which the economy of a certain group of countries is conditioned by the development and expansion of another economy, to which their own is subjected” (Ferraro, 2008). Connecting back to the introductory facets of this topic, the dependency that one disaster-affected area develops in comparison to another affected area. Areas predisposed to poor economic conditions are also shown to be at a higher risk of being negatively affected by disaster. This predisposition is linked to a concept known as “persistent poverty”:
Poor people are more often affected by natural hazards because they often have to settle in risky areas, for two major reasons. First, at risk areas may be more attractive when they offer economic opportunities, public services, or direct amenities, and higher productivity and incomes… Second, poor people benefit less from protection from hazards, mainly because of the lack of infrastructure to protect them (Hallegatte, et al, 2020)
Tying these components together allows for the assertion that humanitarian aid is documented to disrupt markets, therefore creating dependency, and consequently enriching the cycle of persistent poverty. Specialists have noted this widespread phenomenon, but the case studies of Sudan and Pakistan particularly exemplify the ties of humanitarian aid and economic distortion.
III. Sudan (The North-South War, 1985-2005)
The main points within the Sudanese case study reflect the distortions through the lens of a complex humanitarian emergency (Schwab, 2015). Unlike an emergency caused by a natural hazard-driven crisis, the conflict within Sudan has spanned over several decades, subsequently prompting a long-term humanitarian situation. Specifically, there are patterns of “escalation and reduction” within the confines of the Sudanese civil conflict, although the main timeline showcased for the purposes of this research is the insurgence between 1985 and 2005.
In other words, humanitarian aid is inappropriately directed towards the recovery of Pakistani economy post-disaster, distorting not only the economic conditions of the state, but also at a localized level.
Within the contours of this wave of violence, insurgencies between the northern Khartoum-based government forces clashed extensively against southern rebel groups resulting from attempted “Islamification” through the imposition of Sharia Law throughout Sudan in the early 1980s (PBS, 2021). However, adjacent to this backdrop of Sudan’s “Islamification” lies a central catalyst of this conflict, including the presence of oil reserves within the state (Ottaway, 2012). Ebbs and flows of violence involve the emergence of “large scale killings and war crimes perpetrated by regular and irregular forces… in their pattern of ethnically-targeted destruction” as the main cycle of action to cause conflictual disaster (World Peace Foundation, 2015).
Furthermore, Sudan exists within a twilight between genuine peace and a state of conflict. This is noted in the World Peace Foundation text, “…Sudan’s wars end neither in outright victories nor durable peace settlements… Sudanese live under the constant threat that war and mass atrocity may flare up again” (World Peace Foundation, 2015). As such, humanitarian aid has been present in a long-term capacity to mitigate the effects of an uncertain end to an extensively brutal civil conflict.
Subsequently, the ever-present humanitarian response presents distortive side effects in the Sudanese recovery. Sudan’s economic capacities are fueled mainly through agriculture production and oil reserves during this timeframe (PBS, 2021). Due to the long-term nature of the conflict, short-term humanitarian aid holds a long-term presence in the Sudan. Therefore, there is a growing number of civilians who have been exposed to the effects of humanitarian aid as one of the main economic foundations within the state. As Schwab notes, while not necessarily the fault of the humanitarians addressing the effects of the Sudanese Civil War, the unintended consequences have resulted in a major distortion in the economic capacities that have now spanned across a generation of Sudanese citizens (Schwab, 2015).
Essentially, what could have been utilized as a long-term investment for the development of sustainable economic growth was mishandled or left unimplemented, leaving Pakistan in a state of dependence on foreign aid.
This phenomenon also transcends into the infrastructural aspects of Sudan’s economy. Two instances are noted by Schwab regarding these infrastructural distortions caused by humanitarian aid. The first example revolves around the issues within the Rahma market, with Schwab noting that “[m]uch like the short-term aid that comprises such a disproportionate part of Darfur’s aid economy, the Rahma market was not built on promises of permanence, but rather on the rush of urgency and finitude” (Schwab, 2015). Simply put, the prevalence of the traditional model of short-term aid in such a widespread capacity within Sudan has transcended into a culture of short-term, fast results to stimulate economic capabilities. Moreover, distortions have also been documented, as Schwab notes that “warehouses which bought goods from investors at one price at a given time… sold the same good at a different price after a given delay, sometimes selling the same good five or six times” (Schwab, 2015).
This problematic distortion of markets within Sudan is notable during this timeframe, as the agricultural sector comprised roughly 80% of the workforce in Sudan at this point (PBS, 2021). Moreover, manipulation of humanitarian aid from both conflict parties perpetuates the market distortion while a variety of aid entities contributed assistance, exploitation and siphoning of aid muddled economic support available leaving already underprivileged communities in Sudan destitute (United States Holocaust Memorial Museum). This further indicates a widespread issue of economic distortions resulting from humanitarian aid; pricing, distribution, and sales of materials within Sudanese economic contours amid the second Sudanese Civil War all suffered distortion.
IV. Pakistan (Flooding, 2010)
Conversely, Pakistan’s case study profile provides an example of the economic distortions caused by humanitarian aid in a natural disaster setting. While Pakistan has been prone to civil conflict, the focus of the Pakistani case study revolves around the persistent natural disasters affecting the state, necessitating humanitarian intervention. Understanding the pattern of natural disaster and aid mismanagement is key within the Pakistani context of economic distortion; Pakistan’s economy consists primarily of raw material extraction, construction, and manufacturing.
In the case of Sudan and Pakistan, the aid administered failed in assisting the respective economic growth; markets in these areas distorted and made conditions unfavorable for long term economic growth when recovering from disaster.
Within the last 45 years, Pakistan has been prone to earthquakes (6.2 Richter Scale in 1974; 7.6 Richter Scale in 2005), a wide-scale drought in 2000, Cyclone Yemyin in 2007, and extensive flooding and landslides in 2010 (Top 10 Natural Disasters since 1935, 2010 ). According to Khan/Ahmed, Pakistan has received roughly $73.1 billion in the form of foreign aid from 1960 to 2002, but this has not necessarily appeared at the local level (Kahn, Ahmed 2007). While prior to the specific Pakistani case study at hand, this economic overview indicates a systemic mismanagement of outside aid for Pakistan’s economic recovery in the wake of recurring hazards. In comparison to the case of Sudan, the economic distortion in Pakistan appears primarily at the state level: “Foreign aid is fully consumed and substitutes rather than compliments domestic resources. It is argued that foreign aid is used to import inappropriate technology, distorts domestic income distribution, and creates a bigger, inefficient and corrupt government in developing countries” (Kahn, Ahmed 2007). In other words, humanitarian aid is inappropriately directed towards the recovery of Pakistani economy post-disaster, distorting not only the economic conditions of the state, but also at a localized level.
This economic distortion found throughout Pakistan from humanitarian response further comes to light in the wake of the 2010 floods. While some humanitarian intervention in the aftermath of the flooding contributed to families receiving food and small businesses receiving grants in the wake of infrastructure destruction, the humanitarian aid was limited and worked around local markets, rather than assisting markets flourish in recovery (Carter, 2016). With the near constant ebb and flow of natural disaster, with intermittent bouts of conflict, the economic recovery has been both limited and distorted. From a long-term capacity, the conjunction of distorted foreign aid from a corrupt governmental capacity with the repetition of natural disasters in the state has created a stagnation in the economic growth past that of the humanitarian aid offered towards Pakistan. As a result, much of the humanitarian aid has done little to prop up or grow the Pakistani economy. This is noted by Kahn and Ahmed, “[m]ost of the foreign aid components diverted from development to non-development expenditures, have produced hardly any significant impact on economic growth” (Kahn, Ahmed 2007). Essentially, what could have been utilized as a long-term investment for the development of sustainable economic growth was mishandled or left unimplemented, leaving Pakistan in a state of dependence on foreign aid.
In terms of the two cases of Sudan and Pakistan, economic conditions shown within the post-disaster environment create the base point in understanding the application of persistent poverty, tying together the points of economic distortion through humanitarian aid to reliance on aid and subsequent cycles of poverty within the state. The recent economic profile of each aforementioned case study showcases the differing capacities in which affected states are continually tied to humanitarian aid, supporting the respective economies. One tool of importance is the Economic Freedom index, which has documented the trends of economic freedom in both Sudan and Pakistan. Visualizing the data demonstrates the linkages between the issues discussed within these two specific states and the economic data associated with each respective state:
Regarding the above graph, this represents the overall score for economic freedom with Sudan and Pakistan. The data indicates that neither Sudan nor Pakistan break past the barrier past the “Mostly Unfree” category (Economic Freedom Index, 2021). Additionally notable from this information is the pattern of either stagnation or decline in economic freedom. Emphasizing specific data allows for a recent picture of economic stature for comparison. In the case of Sudan, the data trend indicates that Sudan is moving further away from economic freedom, leaving the state to rely on outside humanitarian aid for economic footing (Economic Freedom Index, 2021). According to the data, Pakistan has remained stagnant in terms of economic freedom, without the indication of economic independence past humanitarian aid. Moving forward, the projection for economic growth for poverty amid developing economies through the additional challenge of the COVID-19 pandemic indicates further economic disruption, most likely necessitating further humanitarian aid in areas such as Sudan and Pakistan (World Bank Group, 2021).
Understanding that each disaster affected area has their own cultural and societal contours that affect the very thread of their methods of recovery should be at the forefront of humanitarian planning.
Areas affected by disaster do not experience the ramifications of each respective event equally: in areas that do not have stable political and economic conditions, implementation of humanitarian aid remains difficult for long term results (Klomp, 2014). Other literature correlates with the data noted from the Sudanese and Pakistani case studies. Within Klomp’s text, economic growth differs depending on the type of aid administered; development aid correlates with positive growth, while non-developmental aid typically presents as “growth-neutral,” and occasionally negatively impacts economic growth (Klump, 2014). In the case of Sudan and Pakistan, the aid administered failed in assisting the respective economic growth; markets in these areas distorted and made conditions unfavorable for long term economic growth when recovering from disaster. Overall, the data indicates a lack of substantial growth in disadvantaged post-disaster settings, preventing an independence from humanitarian aid to create a form of resilience to move past poverty and reliance on humanitarian aid.
V. Humanitarian Economics Moving Forward
To alleviate these concerns regarding the reliance of humanitarian aid in states with similar characteristics to Sudan and Pakistan, differing approaches regarding humanitarian aid are necessary to expand past the current model of reliance on humanitarian aid. To implement these changes, one of the foundations of sustainable economic aid and subsequent recovery appear within the Humanitarian Standards Partnership’s SEEP Core Standards for Minimum Economic Recovery; the Core Standards create context for humanitarian planning, market awareness action, and aid project design (Humanitarian Standards Partnership, 2017). The five pillars within this report are that “humanitarian programs are market aware; Efforts are coordinated to improve effectiveness; Staff have relevant skills; Do no harm; [and] Intervention strategies for target populations are well defined” (Humanitarian Standards Partnership, 2017). To move forward in a sustainable capacity, these foundations should be implemented into all steps of the humanitarian aid process as guidance. Furthermore, a movement past monetary aid towards other forms of development is predicated in the creation of sustainable aid response.
Essentially, the current model of aid is not reaching the people who need it most, and this in turn means that states will most likely fail in the long run notes Page and Panda (2016):
State bypass is most common in humanitarian aid, where a fast response is key… In some cases, aid agencies may have no choice but to deliver aid through nonstate systems immediately following conflict or natural disasters. But if aid continues to take this route as countries transition from emergency to recovery, states will likely fail to develop the institutional capacity necessary to oversee service delivery in the long run (Page, Pande 185-186)
Overall, reflections upon humanitarian aid contributions to the philanthropic actions at the localized level can benefit the levels of trade output that an affected state can contribute to the global economy, therefore strengthening their respective economic status.
While a quick response is helpful in a short-term capacity for disaster-afflicted areas, infrastructure within a state often does not have the capability of internalizing short-term aid for a long-term solution. An additional issue exists regarding donors and donor countries following through on monetary contributions. An Oxfam report extrapolates on this occurrence, noting that “[i]nadequacies and imbalances in humanitarian financing stem from its voluntary nature…” (Gingerich, Cohen 37). Essentially, the voluntary nature that Gingerish and Cohen describe concentrate on the specific focuses that fit into donor interests, which “heightens the power of domestic interest groups in donor countries to distort assistance priorities” (Gingerich, Cohen 37). This effectively leaves a gap in terms of interest, which prompts great ramifications to areas not of interest to donor states or when areas affected by disasters do not align with donor interests.
Moreover, a movement towards local development is pivotal to move past the effects of distortion. One way to utilize this movement is to implement proper ‘Best Practice’ policies. All too often, the intricacies of the local areas affected by disaster are not taken into consideration when designing the plans for aid. Noted within Aid Dependency: The Damage of Donation
[a]… significant problem of dependency upon international agenda-making for countries receiving aid is that globally recommended ‘best practice’ policies often lack appropriate contextualization to cultural, religious, or social values. A top-down, uniform approach to policy implementation by donors also has logistical barriers whereby local infrastructure is incapable of carrying out donor projects effectively and producing satisfactory results (Stanford, 2015)
Understanding that each disaster affected area has their own cultural and societal contours that affect the very thread of their methods of recovery should be at the forefront of humanitarian planning. This leads into the process to sustainably diverge from humanitarian ties through local economic development actions, as displayed by classifications showcased by the International Labour Office:
Table 1. Classification of major ISIC divisions
|1||Agriculture: (1a) culture, (1b) fishery and fish farming, (1c) livestock, (1d) forestry and hunting|
|2||Mining and quarrying|
|4||Electricity, gas and water|
|6||Wholesale and retail trade and restaurants and hotels|
|7||Transport, storage and communication|
|8||Financing, insurance, real estate and business services|
|9||Community, social, and personal services|
Table 2. Criteria for ranking strategic sectors
|1. Growing or unmet demand for the related goods/services in the market|
|2. Locally available or accessible markets for the concerned product/service|
|3. Allows for the employment of low-skilled labour force|
|4. Required competencies are abundantly available locally|
|5. Density of micro and small firms|
Local Economic Action Taking Classification and criteria tables, (International Labour Office, 2010)
Taking an intentional approach to understanding the local intricacies with each of the categories above with an affected area enables the local areas to expand in the most efficient, sustainable manner while respecting the individuals receiving the aid. This sets up the foundations for breaking the cycles of poverty and reliance on aid in disadvantaged disaster-affected areas. According to a report through RealAid, a “[l]oss of policy autonomy, undermining accountability and responsiveness to national citizens and delivery of services by government, undermining predictability of government spending and therefore long-term planning” create an environment unconducive to proper sustainable development (RealAid,2011, 17-18). This understanding of what has not worked in the past with the traditional economic humanitarian support allows for an introspection to incorporate support to the economically disadvantaged into the end goals of aid. Without this introspection, aid ceases to have as much reach, and does not benefit those most in need after a disaster.
Additionally, the shift towards sustainable development is necessary in the age of action towards a viable approach for long-term post-disaster recovery.
Two components are starting points to expand this new vantage point of humanitarian economics to prevent dependency and poverty persistence: the ideas of “trade, not aid” and “sustainable development” to address economic downturn in post-disaster affected areas. Regarding the concept of increasing aid, [t]rade and economic development are ultimately the goal as they enable countries to be self-sufficient. But thoughtful aid can accelerate this process” (Pettinger, 2021). Overall, reflections upon humanitarian aid contributions to the philanthropic actions at the localized level can benefit the levels of trade output that an affected state can contribute to the global economy, therefore strengthening their respective economic status. Additionally, the shift towards sustainable development is necessary in the age of action towards a viable approach for long-term post-disaster recovery. According to a Stockholm University seminar, one quote describes the fundamental message of why traditional humanitarian aid models need to evolve: “Where risks are high that traditional aid will fail, it gives options to explore and implement alternative strategies that focus on transformation built on historically successful cultural practices to manage the local ecology” (Stockholm University, 2017). This movement towards higher levels of sustainability regarding aid projects and practices improve resilience and mitigation measures in the wake of future disasters.
While helpful in thought, humanitarian aid in the form that is currently utilized can cause more long-term harm in areas predisposed to poverty by keeping those areas tied to aid and leaving the economic adversity intact.
Humanitarian aid, while done in a philanthropic capacity, has inadvertent effects on the economic conditions of areas already predisposed to poverty. This phenomenon has no discrepancy between natural disasters or disasters caused by conflict, both are showcased with ample ties to the referential terminology described within this research. Upon examination of economic data, the main takeaway is that the humanitarian economic sector is at a crossroads for action that can be taken to improve the lives of those affected by disaster. What is actively completed in terms of humanitarian aid and what can be completed for long term, sustainable development post-disaster has come to light through examining deep divides between states that receive aid and the lack of economic growth and independence as a result. While helpful in thought, humanitarian aid in the form that is currently utilized can cause more long-term harm in areas predisposed to poverty by keeping those areas tied to aid and leaving the economic adversity intact. As a result, the shifting vantage point of humanitarian aid should not include measures to away from fast, documentable results but rather patience to see long-term effects take place for higher resilience in the wake of future disasters.
 The phenomenon of ‘Dutch Disease’ refers to the increase of development in one sector in an economy, while other sectors and overall GDP of the contract. The name is in reference to a shift in the Dutch economy, as the unearthing of natural gas promoted economic capacities in this sector, while resulting in “higher unemployment rate[s] in the country, as well as a decline in the manufacturing industry (CFI).
 UN Agencies, UNICEF, World Food Program, and 40 NGOs were present in the humanitarian response in this wave of violence in Sudan (United States Holocaust Memorial Museum).
 Pakistan contains a vast number of natural resources, including coal, oil, gold, natural gas, and various minerals (Ashraf).
 The overall score includes “property rights, judicial effectiveness, government integrity, tax burden, government spending, fiscal health, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom within Sudan and Pakistan, respectively” (Economic Freedom Index, 2021).
 The break in exact data from 2001-2016 Sudan is most likely due to the continual civil conflict, although a hypothesis from my research and previous knowledge indicates that the status of Sudan was most likely either in the repressed or unfree category.
 Sudanese Economic Freedom Scores: 48.8 (2017) to 39.1 (2021)
 Pakistani Economic Freedom Scores: 52.8 (2017) to 51.7 (2021)
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Kristina Diefenderfer is a graduate student in the M.S. in Emergency Management program.