Humanitarian action makes sound business sense
31 May 2016 by Marcos Neto, Director, Istanbul International Center for Private Sector in Development
In February, Tropical Cyclone Winston hit Fiji, resulting in loss of life, disruption to business supply chains and damage to properties. The estimated cost to the Fijian economy was US$470 million. Imagine the even greater impact to the Philippines, which is visited by an average of 20 typhoons every year, five of which are destructive.
The challenges the world is facing right now are overwhelming. More than 130 million people are in need of humanitarian assistance in the world today. Some 60 million people have been forcibly displaced. UN-coordinated plans to provide life-saving aid and protection to the most vulnerable people require nearly US$21 billion each year.
The potential involvement and impact of the private sector and philanthropic foundations is significant. On average, the private sector accounts for 60 percent of GDP, 80 percent of capital flows and 90 percent of jobs in developing countries. Philanthropic giving amounts to an annual US$60 billion from OECD countries to the global south.
It’s a sound business argument: stable economic markets, healthy and secure employers, consumers who can purchase products and services, and good governance and strong institutions. Conflicts and disasters are costly to the whole society. According to the Global Peace Index, violence costs the world 13.4 percent of its GDP. Between 1970 and 2013, over US$2.8 trillion in economic losses were reported globally from natural disasters, according to UNESCAP.
Private sector networks, individual companies and philanthropic actors are already supporting humanitarian action and development in many countries. But we have not had a system fully equipped to channel the necessary resources, skills and expertise to address the humanitarian and development needs. There is potential for much more.
In Fiji, we are helping the private sector to take stock of all the assets it has and catalogue them. That way, if another cyclone happens, they will be able to say “This company has trucks, that company has fuel, that company has this…” And they will be able to deploy these resources in a coordinated matter, very quickly and to greater impact.
More than 900 companies around the world have voiced a desire to engage in humanitarian action in a more systemic, strategic and coordinated manner. What they needed was an initiative that would transform the way the private sector engages before, during and after crises.
In response to this call, the United Nations Office for Disaster Risk Reduction, the United Nations Office for the Coordination of Humanitarian Affairs, and UNDP have established the global Connecting Business Initiative.
The initiative has been well received. Companies, governments and philanthropic organizations connected through the SDG Philanthropy Platform are voicing their support.
At the same time, governments and international actors need to continue to support the involvement of the private and philanthropic sectors by creating conditions and regulations that allow these actors to best use their key skills and resources. This means incentivizing impact and socially responsible investment, providing information and promoting good practices, educating consumers and making finance available.
We have no other option than to try to enable the private sector, UN agencies, governments and civil society to work better together. If disasters and conflict keep wiping out our development gains and taking us back to square one, we will never achieve the Sustainable Development Goals, and there is no 'Plan B' for people and the planet.