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Attila Marjan

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Is our global humanitarian system in transition? If so, what are the key issues before the 2016 World Humanitarian Summit

“Today’s needs are at unprecedented levels and without more support there simply is no way to respond to the humanitarian situations we’re seeing in region after region and in conflict after conflict.”
António Guterres, the UN High Commissioner for Refugees

The world is preparing for the World Humanitarian Summit. The United Nations will host the event in Istanbul, in 2016. Before the meeting, regional consultations are held in several parts of the world hit by humanitarian crises. Expectations are high.The study forecasts how the EU can financially contribute to donor activities in the future taking into account the fact that there are too many humanitarian crises.

Recognising that the humanitarian landscape has changed tremendously over the past few decades, the UN Secretary-General, Ban Ki-moon initiated the World Humanitarian Summit (WHS) as a three-year initiative which will set the scene for a wide-ranging international discussion on how to adapt the humanitarian system to the new reality so that it serves the people in need more effectively.

The WHS has a two-fold objective:

1) secure commitment to a strategic agenda which makes humanitarian action fit for the challenges of 2016 and beyond;

2) develop stronger partnerships and seek innovative solutions to persistent and new challenges so that the agreed strategic agenda is implemented after the Summit.[1]

As Jemilah Mahmood − Head the WHS Secretariat at the UN Headquarters in New York – stated, “Now more than ever, we need to recognise the sheer magnitude of the problems we face in the humanitarian and developmental sectors, and focus our collective resources on solving them.” The WHS is an opportunity for governments, the UN and intergovernmental agencies, regional organisations, non-profits and civil society actors, the private sector, academia as well as people affected by crises to come together, take stock of humanitarian action, discuss the changing landscape, share knowledge and best practices, and chart a forward looking agenda.[2]

Before the Summit, through a two-year consultation process, the aim is to build a more inclusive and diverse humanitarian system by bringing all key stakeholders together to share best practices and find innovative ways to make humanitarian action more effective. The process is being managed by the UN Office for the Coordination of Humanitarian Affairs (OCHA).The European Commission’s Humanitarian Aid and Civil Protection Department (ECHO) is taking an active role in contributing to the discussion throughout the entire WHS process.[3]

The following agenda for consultations have been established:

  1. West and Central Africa − Côte d’Ivoire, 19-20 June 2014;
  2. North and South-East Asia − Japan, 23-24 July 2014;
  3. Eastern and Southern Africa – South Africa, 27-29 October 2014;
  4. Europe and Others − Hungary, 3-4 February 2015;
  5. Middle East and North Africa − Jordan, 3-5 March 2015;
  6. Latin America and the Caribbean − Guatemala, 5-7 May 2015;
  7. Pacific Region − New Zealand, June 2015;
  8. South and Central Asia − 3rd Quarter 2015;
  9. Global Consultation − Switzerland, October 2015.

Consultations will engage a broad range of partners, including people from affected territories, humanitarian actors, technical experts and the public through the WHS web platform. The key findings from both the regional and online consultations will be included in the final report of the Secretary-General that will set the summit agenda and influence the future of global humanitarian action.

Change is needed in the international humanitarian system as almost 25 years after UN General Assembly resolution 46/182 created the present humanitarian system – around the ERC, the IASC and a set of established core and guiding principles – the landscape of humanitarian action has changed considerably. Inter-related global trends, such as climate variability, demographic change, financial and energy sector pressures or changing geo-political factors have led to increased demand for humanitarian action. This focuses around three types of humanitarian realities: armed conflicts, disasters caused by natural hazards, and ‘chronic crises’ where people cyclically dip above and below acute levels of vulnerability. Each scenario has its own characteristics and challenges.[4]

In response to the challenges, humanitarian actors have sought to improve their services and maximize their impact on people in need. In particular, the 2005 Humanitarian Reform and more recently the IASC Transformative Agenda developed new approaches to working more accountably, predictably and effectively, and discussions to update international humanitarian legislation take place each year in the General Assembly. But there has been no collective exercise to take stock of the achievements and changes that have occurred since the current system was formed. Nor has a structured dialogue taken place between the four major constituencies that contribute to humanitarian action today: Member States (including affected countries, donors and emerging and interested partners); the global network of humanitarian organizations and experts; associated partners, (including private sector, religious charities, etc.); and, affected people themselves – as first responders, communities and civil society organizations, to think through how to address the current challenges. While the fundamental principles enshrined in General Assembly Resolution 46/182 will continue to guide our work, we need to explore how to create a more global, effective, and inclusive humanitarian system.[5]

The Summit hopes to engage states in commitments to a new range of global humanitarian policies and financing. The main aim of the Summit is to: “set an agenda to make humanitarian action fit for the challenges of the future, by broadening and deepening partnerships for those in need.” The Concept Note that is guiding consultations running up to 2016 has put innovation right at the centre of its work, and is focusing on four main themes: humanitarian effectiveness; reducing vulnerability and managing risk; transformation through innovation, and serving the needs of people in conflict.[6]

Humanitarian crisis

According to Humanitarian Coalition, humanitarian crisis is an event or series of events which represents a critical threat to the health, safety, security or wellbeing of a community or other large group of people, usually over a wide area. Armed conflicts, epidemics, famine, natural disasters and other major emergencies may all involve or lead to a humanitarian crisis that extends beyond the mandate or capacity of any single agency. Humanitarian crises can be grouped under the following headings: Natural Disasters (earthquakes, floods, storms and volcanic eruptions). Man-made Disasters (conflicts,plane and train crashes, fires and industrial accidents). Complex Emergencies (when the effects of a series of events or factors prevent a community from accessing their basic needs, such as water, food, shelter, security or health care). Complex emergencies are typically characterized by: extensive violence and loss of life; displacements of populations; widespread damage to societies and economies; the need for large-scale, multi-faceted humanitarian assistance; the hindrance or prevention of humanitarian assistance by political and military constraints; significant security risks for humanitarian relief workers in some areas.

The causes for a crisis are always context-specific and each crisis is different. Humanitarian crises usually require a multi-sectoral response. Complex emergencies pose many challenges to humanitarian actors, including access to vulnerable populations, human rights abuses and the possible presence of armed actors.[7]

Do we live in a safe or dangerous world?

Humanitarian crises in the world today − Syria, Iraq, Central African Republic, South Sudan and now Gaza − all demand immediate and massive humanitarian response. The crises are not only large-scale, affecting millions, but the conflicts also are complex, each with unique political realities and on-the-ground difficulties. They are not alone among crises competing for our attention. They are simply the biggest, pushing off the front pages other crises where human needs remain urgent: Darfur, Central America, Pakistan, Côte d’Ivoire, Democratic Republic of the Congo and Somalia.[8]The question is obvious: Do we live in a safe or dangerous world?

During 2012 − the most recent year for which there are data − the number of conflicts being waged around the world dropped sharply, from 37 to 32. High-intensity conflicts have declined by more than half since the end of the Cold War, while terrorism, genocide and homicide numbers are also down. And this is not simply a recent phenomenon. According to a major 2011 study by Harvard University’s Steven Pinker, violence of all kinds has been declining for thousands of years. Indeed Pinker claims that, “we may be living in the most peaceful era in our species’ existence.”[9]

Over the last decade, claims that the number and deadliness of armed conflict has declined since the end of the Cold War − while not uncontested − have become increasingly accepted. The most telling finding is that the number of high-intensity state-based conflicts − those that kill a thousand or more people a year − has declined by more than half since 1989.[10]

 

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Conflicts between states − especially high-intensity conflicts − have become very rare since 1989. There has been less than one interstate conflict per year on average since 2000, down from almost three during the 1980s.[11] Since the end of the 1990s there has been a growing – and increasingly heated – debate over recent and longer term trends in violence around the world. Proponents of what has become known as the “declinist thesis” argue that violence has declined; others accept the basic “declinist” thesis but challenge the explanations that seek to account for it.[12] But while large-scale organized political violence has declined over the past quarter of a century, some analysts argue that organized – and often transnational – criminal violence has increased. In fact, death rates in some countries exceed those in the deadliest wars currently being waged around the world.[13]

The rise of transnational organized crime is part of what has sometimes been described as “the dark side of globalization.” But the increase in global trade, investment, and other forms of transnational economic integration has also been associated with increased levels of human development, wealth and global freedom.[14] Globally, the number of conflicts had been stabilising at a relatively high level. However, because today’s conflicts are mostly low in intensity, global battle-death tolls have remained relatively low – despite a slight increase from 2010 to 2011.[15]

High-intensity conflicts have fluctuated at a relatively low level for most of the 2000s. The six high-intensity conflicts active in 2011 were located in Afghanistan, Libya, Pakistan, Somalia, Sudan, and Yemen. Some of these conflicts have been active, and among the most deadly, for many years. Only one of the high-intensity conflicts mentioned above – that in Libya – was directly related to the Arab Spring. The wars in Afghanistan, Pakistan, Somalia, and Yemen were associated with ongoing international and local campaigns against Islamist group while the violence in Sudan was mostly related to the events surrounding South Sudan independence, and, to a lesser extent, to continuing problems in the Darfur region.[16]

Most state-based conflicts today are intrastate conflicts, which are fought between the government of a state and one or more non-state armed group over control of government power or a specific territory. Many of the high-intensity conflicts in 2011 – such as the conflicts in Afghanistan, Somalia, and Yemen – were civil wars in which troops from other states participated in the conflict in support of one or more of the warring parties. On the other hand, in recent years, the Middle East and North Africa – the second-most-deadly region in 2011 – saw reported battle deaths triple, going from under 2,000 in 2010 to almost 6,000 in 2011. Part of the reason for this increase can be attributed to the events related directly and indirectly to the Arab Spring.[17]

 

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The number of conflicts in the Middle East and North Africa increased by two in 2011 with conflict onsets in Libya and Syria that were both related to the Arab Spring. Battle deaths in this region also increased in 2011. In addition to the Arab Spring conflicts in Libya and Syria, the increase was a result of the escalation of ongoing conflicts in Yemen, Iran, and Turkey.[18]

Researchers studying the Long Peace of the post-World War II period have identified growing international economic interdependence – manifest in the dramatic increase in international trade and foreign direct investment – as one important disincentive for interstate war in this period.[19]

Conflicts between states, as well as those between states and rebel groups, tend to dominate war-related news headlines. Most people’s understanding of the incidence of armed violence around the world comes from the media. But media reporting – not surprisingly – focuses on bad news. Violence makes headlines – its absence does not.[20] For the past two years world attention has focused on the escalating violence between Bashar al-Assad’s regime and armed opposition groups in Syria.[21]

Too many humanitarian crises challenge the sources and capacity

Kristalina Georgieva[22], EU Commissioner for International Cooperation, Humanitarian Aid and Crisis Response, warns that there is “no light at the end of this tunnel: we must get used to a ‘new normal,’ where we face multiple challenges with finite resources.” We need to accept the reality of not having enough money to respond. With so many crises, the tendency is to focus on the latest and the “biggest” crises. A “crisis of the month” mentality has been replaced by “crisis of the week.” Numbers matter, so understandably our focus is drawn to large-scale crises. When hundreds of thousands of refugees flee a country, we respond. When smaller numbers are displaced by, say, a storm on a Pacific Island – even when proportionally a greater percentage of the population is affected − we tend to overlook it. A few years ago the International Federation of the Red Cross and Red Crescent Societies reported that 90 percent of all natural disasters have fewer than 50 casualties; numbers not sufficient to mobilize an international response but no less devastating to those affected. Too many crises have consequences. In 2012 the worry was how the international community would come up with the resources to meet humanitarian needs in Syria, estimated at $1 billion a year. Today, the appeal for Syria is over $6 billion with less than 25 percent funded by mid-year. Syria is far from the only crisis for which urgent appeals for funding are made. South Sudan, Central African Republic and Gaza are all desperate situations that need a robust international response.[23]

Too many crises also increase the demand for experienced staff. Humanitarian agencies find it daunting to maintain adequate stand-by capacity to respond to a wave of major disasters. Stand-by rosters are stretched. An overwhelming number of crises make it almost impossible for the international community to respond well − or even adequately − to the existing humanitarian disasters, much less to prepare for future ones. Humanitarian crises are influenced by political problems; the inability of our international political system to resolve these crises is stunning. The Responsibility to Protect populations from genocide, war crimes, crimes against humanity and ethnic cleansing has emerged as an important global principle since its adoption by the UN World Summit in 2005. The fact that there are too many humanitarian crises today is the result of a failure in global governance. Change is needed in the international humanitarian system and perhaps the World Humanitarian Summit in Istanbul in 2016 will provide an opportunity for fresh − and even radical − thinking about the way the system responds.[24]

The Brookings Institution assessed the global response to humanitarian crises. Throughout 2013, international humanitarian actors have faced major challenges responding to conflicts and natural disasters across the globe. Tens of thousands of people died in Syria and millions were displaced while international actors struggled to get access to desperate people. While escalating violence in such diverse countries as South Sudan, Iraq, Yemen and the Central African Republic may have received less media attention than Syria, these situations also posed particular challenges to the international community. At the end of 2013, the international community was mobilizing a major relief effort to respond to Typhoon Haiyan in the Philippines, a storm that affected more than 14 million people and displaced over 5 million. Beyond the headlines, there were dozens of long-standing conflicts and smaller disasters that impacted the lives of millions of people and overwhelmed the capacity of local responders to meet the security, food and health needs of victims. The slow and sometimes inadequate response to these emergencies raise challenging questions about the capacity of the humanitarian aid system to meet the needs of people most affected by these and other disasters.[25]

Speaking at the Dubai International Humanitarian Aid & Development Conference & Exhibition, Ross Mountain pointed out that in vulnerable countries food prices, urbanization, migration, the impact of climate change and population growth are all increasing. But as the challenges grow, the resources available in OECD countries − the traditional donors − to respond to humanitarian crises are shrinking. Nevertheless at OECD level budgetary constraints has not yet resulted in dramatic drop in humanitarian aid spending.

Given the increased scale of needs and vulnerability, a shift in attitude and working practices is needed to integrate anticipation, disaster risk reduction, preparedness and resilience into programmes. Many governments and many organizations still operate on a model that focuses on short-term crises, rather than looking at the longer term trends and their humanitarian implications. If we do not take a more participatory preventive approach, we will be responsible for countless avoidable suffering in the decades to come. Governments are increasingly linking humanitarian assistance to political, military or anti-terrorism objectives. Think Afghanistan, Yemen, Libya, Sudan, Somalia and the occupied Palestinian territory. In other cases, like Syria, governments and/or armed groups have increasingly denied access to humanitarian organizations. There has been an explosion of NGOs in recent years; but also a change in the donor landscape. The economic downturn in the West has meant a growing role for donors and organizations from the Arab and Muslim worlds, for example. This means two things. First, the international community needs to better, and “more respectfully”, engage these new players. The tendency on the part of many of us in the international community is to come thinking that money is to be given so that we, the experts, go back and do the work. The talk should be more about strategic partnerships and not about money. Forging smart and strategic partnership is one way for the international humanitarian community to better respond to today’s growing humanitarian challenges.[26]

International humanitarian funds

International humanitarian action − aiding and protecting people in armed conflicts and disasters − has expanded dramatically in the last twenty years to become a major global field. In 2012, official humanitarian aid totalled $17.9 billion dollars and reached 73 million people. Some 75 percent of these funds came from OECD governments, Saudi Arabia and Qatar. This makes states by far the largest contributors to humanitarian aid. The remaining 25 percent came from private funds. Around $3.3bn (18.75 percent) came directly from the donations of individual citizens, and $1.1bn (6.25 percent) from private foundations.The three largest state funders are the USA, EU and UK.[27]

According to the OECD’s report[28] published in April 2014 total development aid (which is a more comprehensive measure than humanitarian aid) rose by 6.1 percent in real terms in 2013 to reach the highest level ever recorded, despite continued pressure on budgets in OECD countries since the global economic crisis. Donors provided a total of USD 134.8 billion in net official development assistance (ODA), marking a rebound after two years of falling volumes, as a number of governments stepped up their spending on foreign aid. An annual survey of donor spending plans by the OECD Development Assistance Committee (DAC) indicated that aid levels could increase again in 2014 and stabilise thereafter. However, a trend of a falling share of aid going to the neediest sub-Saharan African countries looks likely to continue.

In all, 17 of the DAC’s 28 member countries increased their ODA in 2013, while 11 reported a decrease. Net ODA from DAC[29] countries stood at 0.3 percent of gross national income (GNI.) Five countries met a longstanding UN target for an ODA/GNI ratio of 0.7 percent. The United Kingdom increased its ODA by 27.8 percent to hit the 0.7 percent target for the first time. The United Arab Emirates posted the highest ODA/GNI ratio, 1.25 percent, after providing exceptional support to Egypt. Aid to developing countries grew steadily from 1997 to a first peak in 2010. It fell in 2011 and 2012 as many governments took austerity measures and trimmed aid budgets. The rebound in aid budgets in 2013 meant that even excluding the five countries that joined the DAC in 2013 (Czech Republic, Iceland, Poland, Slovak Republic and Slovenia), 2013 DAC ODA was still at an all-time high.

The largest donors by volume were the United States, the United Kingdom, Germany, Japan and France.  Denmark, Luxembourg, Norway and Sweden continued to exceed the 0.7 percent ODA/GNI target and the UK met it for the first time. The Netherlands fell below 0.7 percent for the first time since 1974. Net ODA rose in 17 countries, with the largest increases recorded in Iceland, Italy, Japan, Norway and the UK. It fell in 11 countries, with the biggest decreases in Canada, France and Portugal. The G7 countries provided 70 percent of total net DAC ODA in 2013, and the DAC-EU countries 52 percent. The US remained the largest donor by volume with net ODA flows of USD 31.5 billion, an increase of 1.3 percent in real terms from 2012.  US ODA as a share of GNI was 0.19 percent.  Most of the increase was due to humanitarian aid and support for fighting HIV/AIDS.  By contrast US net bilateral aid to LDCs fell by 11.7 percent in real terms to USD 8.4 billion due in particular to reduced disbursements to Afghanistan.  Net ODA disbursements to sub-Saharan Africa fell by 2.9 percent to USD 8.7 billion.

Nevertheless this survey also suggests a continuation of the worrying trend of declines in programmed aid to LDCs and low-income countries, in particular in Africa. CPA to LDCs and LICs is set to decrease by 5 percent, reflecting reduced access to grant resources on which these countries are highly dependent. Some Asian countries may see increases, however, so that by 2017 overall allocations to Asia are expected to equal those towards Africa. This will need special attention in the future

It is well-known that the European Union is the world’s leading provider of humanitarian aid. This aid, which takes the form of financing, provision of goods or services, or technical assistance, helps prepare for and deal with the crises such as natural disasters, disasters caused by human activity, or structural crises, outside the Union. The Union’s action comprises three instruments: emergency aid, food aid, and aid for refugees and displaced persons. ECHO coordinates this action and cooperates closely with partners who implement aid on the ground, in particular the United Nations and non-governmental organisations. EU Humanitarian aid policy is based on the principles of humanity, neutrality, impartiality and independence. EU Humanitarian aid must be coordinated with other policies so that it can be adapted to each situation and can contribute to long-term development goals. The EU contributes to developing collective global capacity to respond to crises. It commits to promoting reforms in the international humanitarian system, led by the United Nations, and in cooperation with other humanitarian actors and donors.

EU Humanitarian aid is financed from the ’Global Europe’ heading of the EU budget. This heading covers all external action by the EU such as development assistance or humanitarian aid with the exception of the European Development Fund (EDF) which provides aid for development cooperation with African, Caribbean and Pacific countries, as well as overseas countries and territories. As it is not funded from the EU budget but from direct contributions from EU Member States, the EDF does not fall under the MFF (the EU’s seven year framework budget).

International humanitarian funds generally are channelled through UN agencies (like the UN World Food Programme, UNICEF and UNHCR), the Red Cross and Red Crescent movement, and non-governmental organizations (NGOs). Humanitarian NGOs can be well known names like Oxfam, Medicines Sans Frontieres (MSF), the International Rescue Committee (IRC), CARE and Caritas, or they can increasingly be national and local NGOs that are growing fast in countries confronted by protracted conflict, chronic hunger or persistent natural disasters. Altogether, it is estimated that there are about 4,400 NGOs engaged in some form of humanitarian aid and around 274,000 humanitarian workers in the world today.[30] The expansion of humanitarian aid and protection under UN guidance means that the international humanitarian system is becoming a nascent form of global welfare for people suffering from war, chronic food insecurity and natural disasters. Humanitarian aid is now an internationally organized safety net for many millions of people living in extreme situations as terrorized civilians, displaced people and refugees, or the victims of natural disasters like floods and earthquakes. The humanitarian system has expanded in a relatively improvised fashion, and contains hundreds of different and competing moving parts. Its many agencies may share the same strategic humanitarian goals but they each have their own organizational interests that compete for funds, profile and operational terrain.[31]

The EU has begun to invest in these terms with its two initiatives: SHARE for the Horn of Africa worth Euro 270m in 2012/13 and AGIR for West Africa worth Euro 503m in 2012/13.21 The British Government’s Department for International Development (DFID) has also launched BRACED, a fund for NGOs to support people’s resilience to extreme climate change in sub-Saharan Africa and South Asia. This fund is targeting 5 million people and seeking applications from NGO-led consortia.[32] This resilience strategy needs help if it is to inspire genuine innovations in processes, products and paradigms for building resilience. Without such innovations, these new funds, and those that follow, will be a lost opportunity in which NGOs simply bundle up old project types in new resilience wrappers.[33]

Conclusion

Currently, the global community faces many challenges such as climate change, rapid population growth, urbanization, and water shortages. At the same time, there have global economic shifts, new actors engaged in humanitarian action, and tremendous improvements in technology. Given these challenges and opportunities, we need to improve how we respond to disasters and conflicts.[34]

In the last ten years, the funding requirements of inter-agency appeals have increased by 600 percent from $3 billion in 2004 to $17.9 billion in 2014. However, inter-agency appeal funding received in 2013 $8.3 billion. In the same amount of time, the number of people targeted for assistance has more than doubled. The crisis in Syria is one of the worst on record given the sheer size of damage in the country and the effect on the region. The Syria Response Plan was 209 times bigger than the average appeal. More than 150 agencies and aid groups are working with local partners and national authorities to provide relief to the Syrian people in the region. In 2013, African countries like DRC, Somalia, South Sudan, Sudan, these countries had previously received approximately 60 percent of appeal funding, though Syria response plans received 38 percent $3.1 billion.[35]

According to OCHA, crises are longer and more expensive. The crises in the Central African Republic, Iraq, South Sudan and Syria will remain top humanitarian priorities next year. The sharp rise in the number of people affected by conflict and of forced to flee and became dependent on humanitarian aid for their survival is expected to continue. The Global appeal for 2015 is $16.4 billion to help 57 million people in 22 countries. The UN and its humanitarian partners have launched an appeal for US$16.4 billion to help at least 57.5 million people affected by crises in 22 countries in 2015. As UN Humanitarian Chief Valerie Amos explained, “Over 80 percent of those we intend to help are in countries mired in conflict where brutality and violence have had a devastating impact on their lives…But the rising scale of need is outpacing our capacity to respond.”[36]

As far as the EU’s preparedness is concerned one cannot be overly optimistic. In November 2013, after the European Parliament voted through the Multiannual Financial Framework which determines the European Union’s (EU) common budget and priorities over the next seven-year period, the so-called CONCORD Report was published. The 2014-2020 period is the first budgetary framework negotiated under the Lisbon Treaty, giving additional power to the European Parliament. The Parliament’s vote marks the beginning of the final stages of the process leading to the ratification of the EU budget for the seven years. The CONCORD report, ‘EU Budget 2014-2020: Fit for the Fight against Global Poverty?’ recognises that the MFF is not just a financial tool but a key tool in strengthening the EU’s place as a global development actor. The 2014-2020 period will cover both the 2015 deadline for the achievement of the Millennium Development Goals and the EU’s target to spend 0.7 percent of collective GNI on development aid, making it a crucial budget for the EU’s relations with developing countries. And yet the budget available for external action comes up short of what is needed to fulfil the many priorities and global challenges. But in 2014 the situation has dramatically deteriorated when the European Union’s humanitarian aid and development aid programmes were compromised by EU debts, and budget cuts forecast for 2015. Since 2011, the European budget has been amassing unpaid bills, which continue to rise in value. The budget by the end of 2014 was 26 billion euro in arrears, €23 billion of which are owed to the cohesion policy. This impacts the whole spectrum of European politics.

Unpaid bills in the budget category of “Global Europe”, which includes development aid and humanitarian aid, have reached 1 billion euro. The lack of funds has also forced the EU to roll back some humanitarian aid programmes. Some projects in the Sahel region of Africa, the Horn of Africa and Haiti have been postponed,” the budget Commissioner announced.

The lack of funding will also affect other humanitarian aid programmes. The impact of the EU’s current constraints on humanitarian aid is already being felt by the beneficiary countries. For example, aid to Iraqi refugees in Jordan has been reduced. NGOs are signalling that food security operations in Somalia and Ethiopia are being delayed and that their priority level is being reduced,” she added. The strain on the 2014 budget is in danger of becoming even worse in 2015, as member states have proposed significant cuts to the European Commission budget. These cuts would leave the EU unable to pay its currently outstanding bills and those that would arise in the course of the 2015 budget. The cut of 2.1 billion euros, equivalent to 1.5 percent of the total approved expenditure for 2015, will affect a broad range of European projects, but spending on development aid and humanitarian aid will probably be the hardest hit by these proposed cuts. The total budget of the section “Global Europe” could be reduced by 10 percent, representing €384 million. The budget of EuropeAid, dedicated specifically to development aid, may lose 192 million euros; 12 percent of its funding[37].

Globally the next two and a half years offers social entrepreneurs a real opportunity to team up with affected populations and humanitarian agencies to engage in humanitarian innovation. The new products, processes, positions and paradigms that emerge can then be presented in the UN consultation process and get traction through the Summit.[38]


(*)Authors: Attila Marján, Ilona Szuhai

Attila Marján, Head of EU Department at the National University of Public Service, Budapest
Ilona Szuhai, Assistant Lecturer and Doctoral Student at the National University of Public Service, Budapest

 

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[1] http://ec.europa.eu/echo/en/news/world-humanitarian-summit-opens-online-consultation-european-region

[2] http://www.thestar.com.my/News/Nation/2014/05/07/Jemilah-Mahmood-to-head-UN-humanitarian-summit-secretariat/

[3] http://www.worldhumanitariansummit.org/whs_about

[4] WHS 2016 Concept Note, Draft September 2013. p. 1.

[5] Ibid.

[6] Dr Hugo Slim: Innovation in Humanitarian Action, p. 15. http://www.sbs.ox.ac.uk/sites/default/files/Skoll_Centre/Docs/essay-slim.pdf

[7] http://humanitariancoalition.ca/

[8] Elisabeth Ferris: Too many humanitarian crises not enough global resources. http://www.globalpost.com/dispatches/globalpost-blogs/commentary/too-many-humanitarian-crises-not-enough-global-resources.

[9] Human Security Report Project, Human Security Report 2013: The Decline in Global Violence: Evidence, Explanation, and Contestation, (Vancouver: Human Security Press, 2013). p. 119.

[10] Ibid., p. 49.

[11] Ibid., p. 24.

[12] Ibid., p. 15.

[13] Ibid., p. 49.

[14] See more on this in: Attila Marján: Europe’s Destiny − The Old Lady and the Bull. Johns Hopkins University Press, 2010.

[15] Human Security Report Project, Human Security Report 2013, cit. op. p. 86.

[16] Ibid., p. 86.

[17] Ibid., p. 87.

[18] Ibid., p. 94.

[19] Ibid., p. 33.

[20] Ibid., p. 34.

[21] Ibid., p. 95.

[22] Now, European Commission Vice-President.

[23] Elisabeth Ferris: Too many humanitarian crises not enough global resources. http://www.globalpost.com/dispatches/globalpost-blogs/commentary/too-many-humanitarian-crises-not-enough-global-resources.

[24] Ibid.

[25] Humanitarian Crises in 2013: Assessing the Global Response http://www.doctorswithoutborders.org/support-us/events/humanitarian-crises-2013-assessing-global-response

[26] AID POLICY: Humanitarianism in a changing world. http://www.irinnews.org/report/95237/aid-policy-humanitarianism-in-a-changing-world

[27] Slim, op. cit., p. 2.

[28] http://www.oecd.org/newsroom/aid-to-developing-countries-rebounds-in-2013-to-reach-an-all-time-high.htm

[29] Development Assistance Commitee

[30] Slim, op. cit., p. 2.

[31] Ibid., p. 3.

[32] Ibid., p. 22.

[33] Ibid., p. 9.

[34] http://www.worldhumanitariansummit.org/whs_about

[35] World Humanitarian Data and Trends 2014 – highlights. www.unocha.org/data-and-trends-2014.

[36] http://www.unocha.org/top-stories/all-stories/2015-global-appeal-164-billion-help-57-million-people-22-countries

[37] Euractive. http://www.euractiv.com/sections/development-policy/aid-programmes-hit-hard-european-budget-woes-309169

[38] Slim, op. cit., p. 16.

Hungarian economist, PhD in international relations. Based in Brussels for fourteen years as diplomat and member of EU commissioners’ cabinets. Two times visiting fellow of Wilson Center in Washington DC. University professor and author of books on EU affairs and geopolitics. Head of department, National University of Public Administration, Budapest.

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Economy

A post-COVID recovery presents significant challenges for the French economy

Kareem Salem

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As France tentatively eases its lockdown measures, the French government is faced with dealing with an unprecedented economic crisis.

The curb in economic activity during the coronavirus pandemic has considerably strained the second biggest economy of the eurozone. During the first economic quarter, the French economy plunged by 5.8% – which factored only one month of confinement where 67 million people were ordered to stay at home.

The resultant health security measures required the French government to act swiftly to prevent redundancies, by launching a partial unemployment scheme ‘chômage partiel’, under which fixed-term workers received partial unemployment benefits from the French government. Public aid was also granted to small businesses to prevent them from going bankrupt during this uncertain period.

Whilst these measures have prevented significant job losses during the confinement, the easing of restrictions now requires the French government to stimulate the economy. Economic activity figures are expected to continue to decline in the second quarter and real GDP is expected to drop by 8% overall this year.

Since the relaxation of the lockdown measures, only non-essential enterprises that can guarantee social distancing practices have been allowed to resume their business activities. The tourism sector, which accounts for8% of national wealth and 2 million jobs, has received 18 billion euros in rescue funds in response to the remaining closure of hotels, restaurants and cafes.

Yet, there are also other strategic sectors that urgently require government support. These sectors include entities operating in the automotive, aerospace and retail sectors. Well-Known French car manufacturers such as the Peugeot group and Renault, have seen their business operations severely affected by the Covid-19 pandemic since the lockdown of Wuhan, where their assembly plants are located. Subsequent health restriction measures taken by the French government have also led to a significant 84% decline in their operating sales results due to the closure of car dealerships during this period. 

The standstill of the airline industry has inevitably affected the financial stability of aircraft manufacturers and their supply chains in France. Falling sales have led Airbus to reduce the production capacity of its Toulouse manufacturing plant by and is expected to increase further by June, which will inexorably affect the financial stability of their suppliers. The halt in air traffic is expected to result in the loss of 26000 jobs for Airbus and 85000 for its subcontractors in the Occitanie region.

In the retail sector, entities that were in difficulty before the health restriction measures, also saw their financial situation considerably impeded. Between March and May, the retailer La Halle incurred a loss of 106 million euros in sales. Other prominent retailers, notably NAF NAF, which employs 1170 people and owns 160 stores, has been placed under judicial rehabilitation proceedings – redressement judiciaire.

The precarious predicament of certain sectors requires the French government to intervene to prevent greater financial strain mounting in key strategic sectors. The Minister of Economy and Finance has specified his intention to establish a recovery support package for the automotive and aerospace sector in the coming weeks.

The challenge for Bercy is straightforward – ensure that the recovery package meets the needs of both sectors. This is important considering that the automotive sector accounts for 36%of government revenue while the aerospace sector accounts for 12% of French exports of goods. This inevitably requires Bercy to ensure that stimulus packages for both sectors cover employee job security and the freezing of production taxes for aircraft and car manufacturers in order to alleviate their financial strain. This is particularly important for manufacturers in the aerospace sector, which will continue to be affected by the slow and progressive return of air travel.

The post-pandemic period also requires automobile manufacturers and retail sector entities to restructure their business strategy to regain the competitiveness lost during the confinement. The loss in business activity from the lockdown necessitates entities in these sectors most in difficulty, to extend their working hours and limit the number of vacation days in order to produce new wealth, which will enable them to mitigate the economic losses incurred during the confinement. The production of greater wealth will enable the French State to increase its tax base and thus revenues and repay more rapidly the debt accumulated during the pandemic.

As France tentatively moves out of confinement, it is also important for Bercy to encourage consumers to support French manufacturing entities. It is apparent during the eight weeks of confinement, households saved tens of billions of euros. In this perspective, positive deconfinement results coupled with the ease in lockdown measures will gradually rehabilitate consumer confidence. Providing economic incentives for low-income earners is also necessary to encourage them to purchase a new car, which will help boost the sales growth of car manufacturers.

Recovery also requires the collective support of EU member states. Paris and Berlin are seeking to push forward a 500 billion eurosrecovery fund, in which the European Commission will borrow on the financial markets in order to disperse the recovery funds through grants to European economies hit hardest by the pandemic.Its repayment would be the financial responsibility of the entire block.

Yet the naysayer countries Austria, Netherlands, Denmark and Sweden, have instantly rejected the idea of greater fiscal integration. The four’s main concernis the plan of Paris and Berlin to propose grants instead of loans. The challenge for Macron and Merkel is to convey to their European partners that this mechanism is important for Europe to recover less painfully from the pandemic and to shield off anti-European and populist sentiment, especially in the block’s southern countries.

For Bercy, the European solidarity fund will provide much-needed respite for French public finances, which have been significantly strained by the chômage partiel provision, which amountsto26 billion euros.

All in all, while the COVID-19 pandemic poses major challenges for the French economy, support of the French government and European collective action, combined with an overhaul of corporate strategy, will enable Europe’s second largest economy to recover from the crisis more rapidly.

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Stimulating the economy sustainably after coronavirus

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Authors: Yao Zhe and Wu Yixiu*

As the Covid-19 outbreak stabilises in China, the central government is starting to talk about protecting the economy as well as mitigating the virus.

On 3 February, the politburo standing committee called for China to “tackle the epidemic with one hand, and develop the economy with the other”, and continue working “to realise the year’s economic and social goals”. It reiterated this approach on 12 February.

This year marks the end of the 13th Five Year Plan, which includes the goal of creating a “moderately prosperous society”. Over the plan period (2016-20), national GDP and average incomes were meant to double compared to 2010. For that to happen, GDP would need to grow around 6% this year. There is no doubt the government will produce a stimulus package to help. But a programme focused on infrastructure such as railways and roads will hamper the country’s transition to a sustainable economy.

Heavy industry on the mend

Covid-19 led to the extension of the Chinese New Year holidays to almost a month, which affected all parts of the economy. For heavy industry, the biggest uncertainty was demand. Downstream manufacturers and property developers have been slow to get back to work and the economy in general is sluggish. With demand not yet recovered, output of the raw materials produced by heavy industry, such as steel and aluminium, has fallen, though not precipitously. Steel mill utilisation rates remain at a normal level of about 70%, with no major reduction in output. First quarter steel output is expected to be down about 3%.

The return to work has picked up since 10 February. Coal consumption at six major power plants has increased slowly but steadily, indicating industry is getting back on track. Work on key infrastructure projects such as roads and bridges resumed on 15 February, with considerable fanfare. Experts answering questions online for the Ministry of Ecology and Environment said that despite widespread stoppages in construction, services and labour-intensive manufacturing, the heavy industries that supply these sectors continued to operate through the Chinese New Year and beyond. It’s not economical, for example, to stop furnaces in a steel factory for a week or two, so these continued to burn while producing less steel.

The analyst Lauri Myllyvirta pointed out that China has excess heavy industrial capacity and the sector will be able to ramp up to meet any increased demand, with industrial output and power consumption soon recovering. Experts have said the epidemic will mean a significant but short-term drop in energy consumption by heavy industry in the first quarter of the year, until the epidemic is brought under control.

Signs of an infrastructure-focused stimulus

Covid-19 is a new challenge for a Chinese economy already facing a slowdown. The government’s usual response to economic pressure is to use public spending to promote investment, particularly in infrastructure, and there are signs this will again be the case.

Tens of trillions of yuan of investment is planned in major projects across China this year, according to figures in the Economic Information Daily. The latest figures indicate that among the batch of special-purpose bonds (SPBs) issued by local governments earlier in the year, about 67% are to the infrastructure sector. SPBs are designed to help local governments inject funds into specific projects, such as irrigation and toll roads, to help boost their economies. Since January, local governments have issued about 950 billion yuan (US$136 billion) of SPBs, accounting for about 73.6% of the front-loaded SPB quota for this year.

Transport and energy infrastructure – including gas pipelines, oil refineries and nuclear power plants – are well represented in the project lists that some provinces have published. For example, Jiangsu province plans to invest 220 billion yuan (US$30 billion) in infrastructure out of the 540 billion yuan that is going into 240 major projects. Of the 233 major projects listed by Shandong province, 25 are road or rail construction and 16 are building projects. Meanwhile, Yunnan province announced an infrastructure construction plan at a recent press conference on Covid-19, including 100 billion yuan for high-speed rail.

Economic analysts expect to see infrastructure investment in China climb by as much as 8% to 9% this year.

Lauri Myllyvirta has calculated that the extended holiday cut China’s carbon emissions in the first two weeks of the lunar new year by a quarter year-on-year. These climate savings may be offset by a government stimulus package favouring infrastructure projects. According to Zhang Shuwei, director of the Draworld Environment Research Center: “If the government eases monetary policy and boosts infrastructure construction, we may see a nationwide increase in the energy intensity of the economy. It’s likely that energy consumption will not be affected, or will even jump quite a bit.”

If an economic stimulus is unavoidable, it should at least be targeted and not run contrary to China’s efforts to improve the structure of the economy. The service sector, which has been rocked by Covid-19, accounts for 54% of China’s GDP and provides huge numbers of jobs. Support tailored to it will be crucial for rebuilding resilience and confidence, and is in line with China’s economic transition.

Sustainable stimulus?

Chinese economists often debate how best to direct public finances in order to stimulate the economy. The coronavirus has brought something new to that discussion, by highlighting that public services like hospitals and schools suffer from a lack of resources and capacity to respond to emergencies.

Former mayor of Chongqing, Huang Qifan, wrote that government spending has long favoured transportation and construction, while overlooking public facilities and services. Huang believes spending on the latter would be a more effective way to boost GDP while also meeting public needs. He thinks government spending should incentivise consumption of public goods and services “to promote sustainable and high-quality economic growth.”

Heilongjiang and Jiangsu provinces are adding public health and other “catch-up” projects to their list of major projects, with funding support for those chosen. Nationally, the decision on whether to make improving the public health and emergency response systems a key target for government investment will be a test for policymakers.

Covid-19 is believed to have spread to humans via wild animal consumption. The public is now more aware of the importance to health of living in better harmony with the natural world. What is less recognised is that as well as bringing us disease, the overexploitation of nature also brings systemic risks that could cause disastrous “black swan” events. Four of the five major risks listed in the World Economic Forum’s 2020 Global Risks Report are environmental: climate change, biodiversity loss, extreme weather and the water crisis. As these risks interact rather than stand alone, they could cause a chain reaction.

If we are to increase our resilience, we need to fully understand these risks and ensure the facilities and mechanisms to respond are in place to prevent incidents escalating catastrophically. Environmental risks, like public health risks, need major investment to guard against. There are two aspects to this investment: one is spending on restoring our damaged environment and minimising further damage; the second is investment in environmentally-friendly technologies and industries that can change our mode of economic growth – to increase the “compatibility” of our society and economy with the environment.

How will we restore the economy once the epidemic has passed? If we direct government spending to high-carbon infrastructure construction and heavy industry, as usual, we will place ourselves at huge climate risk. This kind of investment is clearly not sustainable.

According to Zhang Shuwei: “The key is what we see when we look back at the lessons of the epidemic. Will we focus solely on the joy of victory, or acquire an awe at how nature, society and ourselves rely on each other? Our answer will lead us down different paths.”

From our partner chinadialogue

*Wu Yixiu is team leader of chinadialogue’s Strategic Climate Communication Initiatives. Before joining the team she was campaign manager with Greenpeace East Asia responsible for international policies. She also worked as a reporter at the English Service of China Radio International. Yixiu holds a B.A. in History in Fudan University and a master’s degree in Journalism from University of Westminster, London.

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Pandemic Recovery Shape: WWW

Naseem Javed

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Evelyn Dunbar painting 1947

Like a World-Wide-War, the pandemic recovery appears WWW shaped amidst fog of misinformation. It’s a global war of sorts showcased on global stage; nation by nation, multi-layered battlefields, tackling healthcare, economy, upskilling, and social justice with complex or comical dialogues, shielded with expert narratives or proclamations of stupidity avoiding bullets of facts and sciences.  

Casualty counts on battlefields rise with bodies littered across the world, sufferers gasping for the last oxygen and masked combat warriors on frontlines in out of control interactions but all yelling for truth. The highs and lows of competency levels publicly acrobated each day, hastily sensationalized by media, super-glazed by political punditry has created new lower standards of deployments. Equally, it has successfully fertilized the global mindshare to ask serious questions while novelty dances of national leaderships and political behavior picks up new rhythms to fix the old broken systems.  The masses of the new world now want large scale change. American elections ready for battle.

There never ever was a call for all G7 or G100 meeting on Day One of the pandemic, the greatest opportunities to step up on global platform missed. The narcissism prevented such humanistic dialogue; exceptionalism is only worthy when measured to serve humanity, otherwise just self-destructionist.

This unforgiving mistake for not having frank, globally open, scientifically intelligent dialogue, streamed live 24×7 global-access on digital-stage to acquaint global masses is a historic failure. Nation by nation, the politics and science mixture shakedown did not create some fine Angostura cocktails rather it turned into a Molotov. The restless citizenry of the world is hoping for truthful solutions. The irony of this pandemic will not be forgotten but immortalized in heavily casted monumental war memorial remembering  the crisis, the fighters and the lost ones; the wise and not so wise of the battle.

Nevertheless, few leadership teams are handling superbly while majority in visible chaos.

The only reward left amongst the casualty of war, if the global populace of billions can claim of at least acquiring some new wisdom while quarantined, earned as a weapon against tyranny, social justice and fairness to enable some balance on the economical charades and some truth to achieve some equality. In this case, cost of human sufferings may become bearable, otherwise, just a cruel reality wrapped in fakery.

The world must open global all-nation dialogue to tackle complex borderless mankind suffering issues; deep silence only becoming living proofs of incompetency and lack of precise knowledge to articulate on such issues.

The world must set new leadership standards on global crisis management as new challenges;

The omnipresence of the pandemic; whensocial front strikes like a hidden kiss of death; the response demands strict quarantines, the impact resulting in bankrupt economies. The damaged economies stretched, stronger ones counting days, any national shut down over 30 day is like creating a year of depression for that nation. A year-long closing, opening, closing and reopening is unimaginable wave to break down civil and economic structure. It’s a world-wide-war but not yet open for a “global stage daily briefing by global experts” the mankind suffers.

The omnipotence of the fear; when risk of exposure lingers for months and years, creating recovery shaped like WWW demands new thinking and open debates. The economic policies, business protocols, and global trade all in YOYO Economy will go up and down with every major shift and shock reactions unbalancing the progress. The fear if filled with new high quality open debates and discussions designed as constructive upskilling platforms shifts into hope and options and eliminating seek and destroy mentality.

The omnicompetent entrepreneurialism; historically, across the world, entrepreneurs created the origin of economic landscapes; they will do it again, as natural risk takers on earth shattering, mind-bending and life-altering creations for the advancements of mankind.  A quick study of the last 1000 entrepreneurs on global stage will provide the proof and blueprints. How do you uplift national citizenry and upskilling hidden talents, the dead silence from national gatekeepers will eventually turn into higher notes. The national trade groups like Chambers, Associations and government departments with vested interest in local economic development must rise all together with digital platform mobilization.

The post pandemic world will positively overflow with billion new entrepreneurs on march from Asia and all the other global entrepreneurialism suddenly bounce on advanced digital platforms, in an office-less, work-less, retail-less, remote-working, remote-learning, remote-shopping and remote living world; creating brand new solutions.

The omnidirectional thinking; the old-business-world is dying for mostly failing to create local grassroots prosperity; they may finally reemerge with new bloodstreams based on global interconnectivity of global trade and consumption with maximum technology and free platforms. The damage caused over decades already visible for ignoring entrepreneurialism as national hidden assets in local SME and ignoring women entrepreneurs as top quality untapped resource, now the day of lip service are almost over. The workers of the world, the thinkers and alpha dreamers, will go remote and carve out global access and digital paths to thousands of cities for their goods and services and create a far more fluid and rewarding culture of trade and commerce. Futurism is workless but NOT trade-less, study deeply

The critical need for new agents of change; covidism mastery is a new art and science, living the new normal as abnormal new learning, the entrepreneurial business world desperately needs ‘agents of change’ the masters of covidism, the new critical thinkers, the dreamers, complex problem solvers and fighter of better quality work models and economical survival strategies. Something mostly unavailable in universities degrees and critically lacking in the corner-offices of the world, but hidden as unknown talent in the working citizenry of any nation. National mobilization to harness such powers of young and old men and women entrepreneurs, nation by nation will rebuild and foster progress.

Study very deeply; plan next 1000 days very meticulously, as you too may have to answer about your own future, very soon 

Rest is easy

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