Why Delivery of Humanitarian Aid is Hard
Humanitarian crises unfold across our screens almost daily. Getting the right food, medicine and shelter to where it is needed is a massive and expensive logistical exercise. On top of that a deal of aid is lost to corruption and pilferage. For example, in 2012 the UN’s Ban Ki-moon estimated that 30% of all development assistance in the previous year did not reach its destination because of corruption. Some might argue, why bother?
Effective delivery of humanitarian aid requires:
• Provision of a transparent accounting system to prevent covert corruption without the burden of expensive and cumbersome oversight.
• Non-corruptible records not only for aid delivery but to prevent other scourges such as human trafficking that depends on falsified documents.
• Simple logistics. Ideally supplies should be sourced from close by for those in need.
• Supplies should match needs. The best decision-makers about this are the actual recipients of aid. For example, food aid is not much use if people have no means of cooking it.
How Blockchain Can Help
The characteristics of blockchain technology, the immutable shared ledger, meet many of these challenges.
As the data is modified in one block, all the data in all the other blocks are simultaneously changed. Every block “sees” what is happening in all the other blocks in real time. With every eye in the blockchain looking on, corruption is virtually impossible.
And at the end the aid recipient can exchange the crypto-currency to purchase their exact and most useful requirements.
The Blockchain In Action
In May this year the United Nations World Food Programme gave thousands of Syrian refugees electronic vouchers that were redeemable at participating markets – no vulnerable food convoys, no scrambling queues and exactly the locally sourced aid needed on the spot.
The blockchain technology used verified that all funds were specifically used to buy food items.
In addition, blockchain is able to verify the identity by using the IrisGuard technology and check the credit status of the user. This will make sure the funds are being used by the right person without checking their photo ID. For those who acquired a good credit status, they will able to apply certain types of loan to start their new life and career when they back to Syria.
Another remarkable example is the UN’s project Usizo where crypto-currency was delivered right to smart electricity meters in South African schools.
This project is established by a startup called Bankymoon and the project itself is actually a crowdfunding platform that allow the public school to corwdsource its utility credits.
For example, this blockchain platform can let anybody to help pay the electricity bill for community schools in a crypto currency form. The donor can also track and calculate how much power their money can purchase. It removes the trust concern towards an organisation to act as a middleman since they can make donation directly to the recipients.
Limitations In The Use of Blockchain Technology For Humanitarian Aid
Despite its advantages, the roll out of blockchain technology in humanitarian aid proceeds cautiously.
Extensive use of blockchain needs:
• Understanding of the blockchain technology by users.
• A critical mass of users to cooperate and use the technology.
All of this takes time and effort especially as humanitarian aid organisations depend on donors.
The UN, for example, depends on donors, especially the United States. The current US administration has promised to cut back funding to the UN and this may have an effect on its long-term projects, especially those to do with coordinating blockchain usage.
Ironically, blockchain technology has the potential to assuage taxpayer and donor concerns about the effectiveness of donations.
And the extensive effort is still needed to have crypto-currency accepted as a means of exchange. While this is not only a problem confined to areas of humanitarian crises, organising the acceptance of crypto-currency in chaotic conditions is all the more difficult.