The usual cliché of lines of people diligently waiting for their ration of rice might not make the newspaper’s next cover page. In fact, a growing number of humanitarian organisations have realised that delivering aid in-kind often distorts markets, raising local prices and restricting the selection of goods. Money in physical form such as banknotes and coins. More aid, on the other hand, comes with many benefits. It offers users the freedom to choose where and what to shop, it stimulates the local economy, empowers the consumer and, studies have shown, provides a more varied diet to its beneficiaries.
The EU is following that trend through its largest ever aid programme: 1 million refugees in Turkey will receive electronic cards on which €348 million to be transferred via the World Food Programme (WFP), in partnership with the Turkish Red Crescent. Beneficiaries of this programme will be allowed to withdraw cash from ATMs, instead of restricting card use to predefined shops. In 2015 alone, the WFP transferred USD $680 million in cash to 9.6 million people around the world, accounting for a quarter of its aid.
Similar programmes have been setup in Lebanon and in Jordan. But these are not only restricted to war-torn areas. For example, the charity Give Directly recently launched one of the largest “basic income” pilot projects in Kenya.
As a European Commission spokesman said: “cash empowers the beneficiaries… they are the best placed to known what their basic needs are.”
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