Management of market based projects in humanitarian aid sector of Afghanistan
Table of contents: The Kazakh-American Free University Academic Journal №12 - 2020
Author: Sayed Masood Aslamzad, Kazakh-American Free University, Kazakhstan, Herat, Afghanistan
Market Based Programming
(MBP) is relatively new in the humanitarian aid sector, it was first discussed
during Indian Ocean Tsunami disaster in 2004, when raging waves of the Indian
Ocean hit the shorelines of twelve countries and caused the disaster, caused a
supply chain disturb as well malfunction of local markets. Research conducted
afterwards showed that the humanitarian aids delivered to people in need, had
actually postponed the economic recovery of the affected areas [1].
Post Delivery Monitoring
(PDM) conducted by several humanitarian agencies demonstrated that amongst all
modalities of assistance deliveries, in kind deliveries had the worst affect on
the local market, workplace and service-providing industries thus hindering the
economic recovery of the area [2]. Market Based Programming can be a solution
to many challenges people in such crises face.
The article is dedicated
to Market Based Programming as a solution that has already proved its
effectiveness in many crisis-stricken areas and considers the stage at which it
could be used in the Humanitarian Aid Sector of Afghanistan.
In the humanitarian aid
sector, the response is actually done in three phases:
Phase I, Emergency
Response.
Phase II, Early Recovery
Response.
Phase III, Durable
Solutions or Humanitarian - Development nexus.
Emergency response is
usually the response designed for the first 72 hrs. after a disaster and is
designed to provide the most lifesaving assistance to the affected population
(which is mostly shelter, water, hygiene, sanitation and food). The emergency
phase may last for a couple of months till the actual boundaries of the
disaster and its damage are known and the affected population get to a stable
situation where they have access to the basic requirements of a safe and
dignified life [2]. There is no debate on the process of delivery of emergency
phase response, it mostly shall be an in-kind delivery but Market Based
Programming is also possible for this phase depending on the context and nature
of the disaster. In manmade disasters like conflict where big masses of people
flee and are displaced to safer places, Market Based Programming is recommended
in order to avoid disruption of the local market. Market Based Programming
(MBP) in these situations will also help with the support of host community's
economy, while in kind assistance delivery may have negative impacts on the
local market's players and lead to more economic instability and problems [3].
The main use of MBP is
in the first and second phases of humanitarian aids. In the early recovery
phase, it is aimed to slowly recover back from the crisis [2]. One of the best
ways to achieve the goal of healing the 'wounds' of a natural disaster is to
implement projects with direct impact on the lives of the affected population.
Market Based Programming is actually based on three pillars which is demonstrated
in Table 1 by the example of the WASH sector.
Types of market-based programming to strengthen
emergency responses, Oxfam GB [2]
As an example, while
planning to provide hygiene material for a conflict-affected community, who
have fled to the closest city with a well-functioning market and running supply
chain, the MBP will recommend the use of the market. At the same time if the
situation is different and the market needs some help (e.g. an earthquake has destroyed
the main bridge over the main supply road) then the MBP recommendation would be
to support market with construction of the bridge in addition to ordering the
required material from the local market. Of course, the implementation modality
depends on the context and the type of service which is intended to be
delivered.
In the Durable solutions
phase which is the last phase, MBP is the most recommended method of
programming, this method ensures a minimum of economic growth and community's
engagement. There are four aspects in the Market Based Programming that we will
briefly discuss:
- demand side;
- supply side;
- infrastructures;
- rules and
regulations [2].
We would briefly go
through each of these aspects and the way they are being assessed and have
helped in the Humanitarian Aid Sector of Afghanistan.
Demand Side:
The MBP is using a very
simple definition for the demand side. Beneficiaries form the demand side. In
humanitarian aid sector of Afghanistan, beneficiaries are usually poor of the
poor, in a country with 2,598,000 internally displaced people (IDP) and a total
of 9.4 million individuals in dire need of humanitarian assistance of World
Food Program (WFP) the demand side is the most important aspect in design of an
MBP project [3,4]. Demand side assessment is the most important activity
conducted to collect the data required on demand side.
Depending on the nature
of assistance (the objective and type of assistance, be it a shelter
assistance, food assistance, Water, Sanitation and Hygiene (WASH) assistance
etc.), a questionnaire shall be developed. The questionnaire is developed in a
manner that maximizes the contextualization and includes cultural and social
factors. The questionnaire is then used as the basis of the demand side
assessment. Once the data is collected and processed, a data analysis report
along with an assessment report will be generated. The conclusion of the
mentioned reports is then used as the basis of the actual design of
interventions.
One of the most
important activities in design of interventions in MBP is the Cash Voucher
Assistance (CVA) design. Cash Based Interventions (CBI) is one of the most
recommended modalities in MBP. CBI is actually the backbone of MBP since MBP is
cash centered. A very well developed questionnaire aims to find answers for the
below questions:
1. What are the main
needs of the affected population?
2. What are the main
coping mechanisms of the affected population?
3. What are the main
characteristics of the proper interventions per affected population's point of
view?
4. What are the available
cash transfer modalities?
5. What are the most
accepted ways of CVA for the affected population?
6. What are the most
effective ways of CVA based on national rules and regulations.
Having the answers to
the above-mentioned questions, MBP project's interventions are designed.
Supply Side:
In MBP, supply side is a
general term that refers to the all players who are active in supplying the
goods and services for the affected population. This means that a vast range of
players are supposed to be studied and assessed to understand the supply side's
functionality.
The process of supply
side assessment is much similar to demand side assessment; it starts with
development of a questionnaire for the players in the market. The most important
players of the market are as followings:
- suppliers of the raw
material;
- main production
factories/companies;
- whole sellers/ selling
agents;
- medium traders;
- retailers;
- transporters and
delivery companies [2].
In addition to these
main players, Humanitarian Agencies are also usually considered as players
since in the most emergency cases Humanitarian Agencies also influence the
supply chain and supply side.
The main difference of
supply side assessment with the demand side assessment is the outcome of the
two. The outcome of the supply side assessment is as follows:
- Market Map;
- Supply Chain Map;
- Added Value
Chain [2].
Market Map:
The market can be
briefly defined as the location of the physical structure where people trade
goods and services. Considering this definition, Market Map is a schematic
depiction of the locations of physical structures involved in the production
chain of a certain material.
Figure 1. Supply Chain for Soap in Herat, Western Afghanistan
Figure Source: Assessment report of supply side
for hygienic material in Herat, Afghanistan, NRC, Afghanistan, March 2019 [5]
Supply chain:
Supply chain shows the
relation between players in the supply side, and is also a schematic depiction
of who provides what and for whom or simply how the supply chain starts, the
way it continues and how it ends. Since Afghanistan is a very poor country, it
is always essential to include the recycle process/scavengers in the supply
chain as its last loop because it happens for many products that scavengers are
also one of the sources of raw material [4].
Added Value chain is
another schematic depiction that shows how the product's price raises in the
supply chain, the main usage of the added value chain is to determine the
bottle nick of the production process. As one of the main goals of the MBP,
developing markets is vitally linked to the added value chain which is used by
the Program Manager to design interventions in a way that develops new markets
and support the existing market.
Figure 2. Supply Chain for Soap in Herat, Western Afghanistan
Figure Source: Assessment report of supply side
for hygienic material in Herat, Afghanistan, NRC, Afghanistan, March 2019 [5]
Figure 3. Added value chain for laundry Soap, Herat, Western Afghanistan
Figure Source: Assessment report of supply side
for hygienic material in Herat, Afghanistan, NRC, Afghanistan, March 2019 [5]
Infrastructure:
The word infrastructure
refers to the main available systems, physical structures and substructures
that contribute to the successful implementation of the project activities in
an MBP project [5].
The main infrastructures
that need to be assessed in an MBP project are the supply routes, factories,
big plazas, bridges, transportation means and stores. Considering the fact that
MBP is empowering the use of cash in Humanitarian Aid Sector, an important
infrastructure is the financial service provision system. Financial service
provision system in Afghanistan usually is consisting of Banks, Local Money
Exchange Markets, Mobile Money Companies, Electronically Transferred Money
(E-Money) System service providers and Hawala System. Hawala system is the
traditional Afghan money transfer system that is widely accepted and used in
the remote areas of the country. In this system, the cash is handed over to a
Hawala Agent in the origin place while another representative of the same
Hawala Agent will reimburse the same amount in the destination place. Hawala
Agents usually charge (1.2-1.8) percent commission fees depending on the
amount, distance and the security condition of origin and destination.
As the last part of
infrastructure assessment it is needed to find the capacity and functionality
of the new technology systems used in the infrastructures of the targeted area.
In other words, the third part of infrastructure assessment is the evaluation
of the new technology used in the infrastructures to understand to what extent
the infrastructures are update and usable.
The last but not the
least aspect of an MBP project is the host country's rules and regulations.
There are many different rules and regulations when it comes to markets and
supply chains. One of the most important outcomes of this aspect of MBP is to reduce
the corruption and fraud, as well as helping small businesses grow in a fair competition.
Humanitarian Aid Providers in Afghanistan try to reach this goal through advocacy.
This is usually done through the advocacy department of the Humanitarian Organizations
[1].
Another reason for
assessment of rules and regulations is to ensure proper administrative process
are followed up and all required steps are taken to assure a transparent legal
project implementation. In order to achieve this goal Humanitarian Aid Organizations
are mainly depending on their legal departments. In the case of our
organization "Norwegian Refugee Council" (NRC), the Information Counseling and
Legal Assistance (ICLA) department of the Organization is responsible for the
compliance of all contracts and agreements drafted by all sectors of the NRC
with the rules and regulations of the Islamic Republic of Afghanistan [1].
MBP is a very new method
of programming in Humanitarian Aid Sector of Afghanistan, Only NRC and Oxfam
have so far implemented such kind of projects.
This type of programming
is mainly designed to ensure economic recovery and relief of disaster affected
people and hosting communities. MBP has worked very well with the Southeast
Asian countries that have been affected by the Indian Ocean Tsunami. Out of
three objectives of MBP which are market, support market and develop market, Afghanistan is mostly in need of developing markets in the most IDP settlement around the
country. IDPs are the first and foremost targeted beneficiaries of the humanitarian
agencies in the Afghanistan.
Since most of IDPs live
in the urban areas and outskirts of the big cities developing new markets in
these areas will contribute to use and support of existing markets in the
neighboring host communities which will in turn contribute to economic relief
of the mentioned communities as well as IDP communities.
Afghanistan is a unique
context where infrastructures are so poor that very primitive services are not
available, this makes the programming a much harder task for program
mangers/designers. In general, having beneficiaries involved in design of programs
is a key factor for success of any project.
REFERENCES
1.
Guidance on "Market Based Programming", WASH Cluster, version April 1, 2019.
2.
Guideline on "Using Market Analysis to support humanitarian WASH programming",
Briefing Note 2. Oxfam GB, 2018. Retrieved from: https://oxfamilibrary.
openrepository.com/ bitstream/handle/10546/620483/gd
types-wash-markets-programming- 2-010618 en.pdf?sequence=1&isAllowed=y
3.
Severity Report for year 2019, Afghanistan, Page 17. Internal Displacement
Monitoring Centre (IDMC).Retrieved from: https://www.internal-displacement.
org/ sites/ default/files/ publications/ documents/ Severity% 20Report%
202019.pdf
4.
Afghanistan's Humanitarian Needs Overview, United Nations Office for Coordination
of Humanitarian Assistance (UN-OCHA), December 2019. Retrieved from:
https://data.humdata.org/dataset/6a60da4e-253f-474f-8683-7c9ed9a20bf9
5.
Supply side Assessment Report, NRC Afghanistan, WASH Department, April 2020.
Table of contents: The Kazakh-American Free University Academic Journal №12 - 2020
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