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]


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.


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. 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:

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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