A pair of elephants are blundering around the cash zoo. Both are threatening to break out of their enclosure, and, as CaLP’s Cash Week in London in October last year and the Humanitarian Partnership Network meetings in February this year once again made very clear, they have been making loud trumpeting noises for some time.
The first elephant is called ‘Cash’ and, unsurprisingly, involves how the aid world defines the word ‘cash’. The second is called ‘Reform’ and involves the apparent inability of the aid sector to embrace the opportunity offered by ‘financial services’ in general and ‘cash transfer programming’ more specifically to aid agency business models.
It could be argued that there are a number of other animals pacing their cages, too, still behind bars but yearning to be free: The big cats called ‘Private Sector’ and ‘Cashless Society’ would be just two, while the hippopotamus called ‘Mobile’ and rhinoceros called ‘Digital’ are staring anxiously across the moat.
So, in an effort to stop the zoo-keeper getting trampled, what do we have to do to keep these jungle beasts happy?
The time for discussion over nomenclature and definition is over: Use of the word ‘cash’ by the aid sector has ended up sowing more confusion than clarification.
Cash refers to physical currency, banknotes and coins. It’s that simple. Money on the other hand refers to all forms of currency, from cowrie shells through vouchers to contactless cards and mobile wallets. Cash is, by definition, multipurpose although its distribution may be restricted and/or conditional. All other forms of money are in some way restricted in terms of access or have conditions applied to their use.
While pondering this apparent statement of the obvious, we must understand that stakeholders in the humanitarian space – UN agencies, NGOs and donors alike – are nervous of the financial services ecosystem, especially the potential for the private sector to upend their cosy traditional business models in a neo-liberal economic world where the few seem to profit from the misery of the many.
All agree that our first responsibility is to deliver more effective assistance and promote better outcomes in ways which crisis-affected people prefer without compromising basic humanitarian principles, but the aid sector remains uncertain about the unscrupulous motives of some private sector actors.
Meanwhile, competition between humanitarian actors needs to shift from the destructive to the constructive. At the moment, the humanitarian system remains too supply-driven and overly invested in perpetuating its own survival.
To change this, we need a wholesale move from the uneasy cooperation between competing agencies we have now to active collaboration in the establishment of a completely new way of working. This will necessitate new organisational structures, re-engineering of existing specialisations, and the complete reinvention of incentives. For people to receive the better aid they deserve, this does not necessarily mean existing aid agencies delivering more cash, it means new forms of aid agency managing more forms of money. Ultimately – and this is implicitly recognised by the Grand Bargain commitments – it will require donors getting together to form some new form of humanitarian bank based on largely private sector supply chains … probably be along the lines of the cash platform currently evolving in Jordan.
Power, funds and influence will need to be ceded to local actors, public and private as well as communities themselves. This will require real sacrifice on the part of most international organisations, many of whom will have to let go completely. It is not thought that the incentives currently exist to act on such extreme choices, although focusing more on outcomes and less on ways of working would, in most contexts, enable us to deliver better.
For their part, private sector financial service providers will have to move rapidly from the status of sub- contracting agent to principal. The only question is the extent to which this will be done in partnership with non-governmental and UN agencies. All stakeholders more or less agree that humanitarian actors have a critical role to play in not just ensuring that assistance is principled, needs-based, and does no harm, but delivers over ‘the last mile’ and holds other actors to account in the process. Simply put, knowing that it does not take 20 NGOs to load an ATM card or create an integrated mobile wallet, we have to deal with the implication that a significant proportion of NGO and UN operational staff in the field will either need to re-role or become redundant.
It is also generally agreed that digitisation, while bringing significant opportunities, tends to exacerbate inequality and centralise power. In effect, it privatises what for centuries has been a common good. This means it comes with significant risks. These need to be mitigated, especially when it comes to experimenting with vulnerable people’s personal data.
Whatever the future of money, and however fast low-income societies are able to apply leapfrog technology, humanitarian organisations will always be needed. They just won’t be needed to do the same things, or do them in the same way as they do now. At the same time, the private sector – all of it, not just those bits with a vested interest in mobile, card and digital-based solutions – need to engage. The time for talk is over. It’s time now for donors to get off the fence, come together and catalyse the sort of transformational change the world’s dispossessed need and deserve.