NB Financial Health

Saturday
May 2
2015

James Militzer

Weekly Roundup – A Tale of Two Earthquakes: As the development community focuses on Nepal, will it repeat the mistakes it made in Haiti?

As of Friday, 6,204 people were known to have died from Nepal’s 7.8 magnitude earthquake, with almost 14,000 injured – numbers that will certainly grow in the coming days as rescue workers gradually reach the rural areas most affected. But as the world seeks ways to help the country, some are raising the cautionary tale of a related disaster: the January 2010 earthquake that devastated Haiti, and the inefficient, tragically mismanaged response from the global development community that followed it.

While the quake that hit Haiti was less powerful, the damage it wrought will surely dwarf even the worst case scenarios in Nepal. The Haiti quake left at least 220,000 people dead, and 300,000 injured, devastating much of the country. It led to the biggest outpouring of humanitarian relief in history, to the tune of almost $10 billion in the first three years after the disaster. The sudden influx of cash and global attention led many to hope that Haiti would be able to “build back better” from the quake, in the words of Bill Clinton, who helped coordinate early relief efforts.

But as many media reports noted on the five-year anniversary of the disaster this January, all that money has had surprisingly little impact. Many of the people whose homes were destroyed have moved to makeshift housing in slums without sanitation. About 85,000 people are still living in displacement camps set up after the quake, and the country is in political and economic shambles. And in a particularly cruel bit of irony, U.N. peacekeepers from Nepal inadvertently brought a highly virulent and antibiotic-resistant strain of cholera to the island, causing an outbreak that infected over 750,000 in Haiti and the neighboring Dominican Republic, killing 9,200 people.

What went wrong, and what can the development community do differently this time? Many analyses of the Haiti experience have zeroed in on one key mistake: the fact that most donor nations and NGOs insisted on maintaining control of their projects and setting their own priorities from the outside, rather than working through local partners. They flew in foreign staff, rented them hotels and cars, and paid them hardship pay that inflated their salaries. The result: it cost USAID more than $33,000 to build a single housing unit in one post-earthquake program – five times more than a nonprofit that uses local contractors spends per house.

Beyond the waste, this insistence on outside control did little to build up Haiti’s capacity to help itself, with less than 10 percent of relief and recovery spending going through government agencies. And though it’s understandable that foreign NGOs and aid agencies were loath to shower money upon Haiti’s corrupt officials, local NGOs received even less. Instead, their foreign counterparts worked separately, coordinating with each other while leaving Haitian organizations out of the loop, according to numerous accounts. Though these NGOS may have constructed new clinics that impressed their donors back home, local contractors benefited little from the construction activity, and Haiti wound up with new infrastructure that went unused because its government couldn’t afford to staff or maintain it.

As international attention shifts to Nepal, another country with a weak and often corrupt central government, how can these mistakes be avoided? According to many analysts, a few key practices would help:

1. Don’t bypass Nepal’s government and institutions, even if they seem inept or corrupt. The alternative – creating a “republic of NGOs” – is even worse.

2. Rather than mobilizing NGOs that don’t have a strong existing presence in Nepal, direct funds to established international agencies or local groups that understand its unique needs and challenges and will be in the country for the long term.

3. Ensure that any foreign NGOs that do come to the country coordinate with each other, and listen to local people.

4. Work with local contractors. Less than 1 percent of the roughly $1.5 billion USAID has spent in Haiti since the earthquake has gone directly to a Haitian organization – similar percentages in Nepal would equal a huge missed opportunity to boost the country’s economy.

5. Don’t donate just for the sake of donating: in Haiti, up to half of the total cargo of donated goods consisted of things like winter clothing, wedding gowns, and expired food and medication – items of little use to Haitians, which wasted aid workers’ valuable time and occupied precious space at the airport. If in doubt, send money instead.

It’s tempting to add a crucial sixth point to that list: Don’t abandon Nepal when the world’s attention inevitably shifts to the next disaster – instead, focus on the infrastructure and business development needs that could help the country pull itself out of poverty in the long term. But honestly, if the global development community can pull off the first five, that would be progress enough.

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James Militzer is the editor of NextBillion Financial Innovation.

Categories
Impact Assessment
Tags
aid agencies, government, NGO, social impact