Grand Bargain on aid reform sealed at World Humanitarian Summit

The article was first posted by Emma Rumney – to which we give full credit. Here is our excerpt of her work.

A “grand bargain” was signed in Istanbul on May 24th, 2016. It is looking to reboot humanitarian aid finance.

In response to frequent and severe crises, donors and aid agencies signed the deal, in an effort to remake an aid system.

Donors pledged to provide long-term funding with more transparency and efficiency through aid agencies' fund spending. 

“The Grand Bargain is not a panacea for all the problems in the humanitarian ecosystem, but it will help make sure money is put to optimal use and, crucially, help to raise new funds.” – Peter Maurer, President of the International Committee of the Red Cross.

Maurer noted that fewer restrictions will allow aid agencies to better work in conflict areas outside the media spotlight. 

As part of the commitment, the deal includes at least 25% of funding to local and national aid responders – which currently receive only 1%.

Further, here are the other aspects of the deal:

  • More cash-based aid (currently only at 6%)
  • Launch of a fund for education in crisis situations
  • Creating aid networks and private sector partnerships

However, commentators observed that the summit achieved little in strengthening the international humanitarian law (IHL).

How can private investors help with humanitarian aid?

Private investors could help by investing in health care in fragile and conflict-affected countries. Social investors could be a great way to help boost the economies of these countries.

Humanitarian investing should focus on building resilience and self-reliance. Opportunities for these impact-driven investors range from pay-as-you-go solar power companies, loans to refugee entrepreneurs, and microfinancing for small businesses.

Funneling a fraction of the trillion of dollars in the capital markets to investments such as mentioned above, could strengthen these fragile communities. By releasing the public, donors, and philanthropic capital to these high-need, high-risk investments countries would benefit from these investments.

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