Engaging the private sector in emergencies

Experience shows that the private sector shouldn't be ignored by the mainstream humanitarian industry in emergencies.

Emergencies such as the earthquake that rocked Nepal in late April 2015 necessitate a rapid humanitarian response to save lives, deliver basic food and household items and restore livelihoods. Surely, emergencies are not the time to be experimenting with new ways of doing things, such as engaging with the private sector? And in any case businesses have little to do with recovery, and no place in an emergency context – best leave it to the humanitarian professionals…

It is perhaps the above received wisdom that leads to the private sector often being ignored by the mainstream humanitarian industry in emergencies. Considerable progress has been made in some areas in the decade since the Asian tsunami, where I was working in the aftermath with a large agency. Back then, we were trialling cash-based recovery which was considered to be tantamount to being irresponsible: how did we know that recipients of cash grants weren’t going to spend it on cigarettes?! We knew that markets were going to be important for recovery, and that they were open for business, but we didn’t have the tools to analyse them. We worked with markets because we knew it was the right thing to do.

A decade later and things have changed markedly. Cash is now a “thing” – and there are toolkits and platforms to support it where the context – and the local politic – allows. There are also several toolkits and trainings to support market analysis in emergencies, such as the EMMA toolkit (emergency market mapping and analysis). Moreover, the rhetoric I heard in the “cluster” coordination meetings organized by the UN was about avoiding undermining markets with the direct delivery of aid, such as agricultural inputs. Unfortunately, while the intentions are good and the toolkits are there to be used, the practice has yet to catch up with the rhetoric.

Samarth is a DFID-funded market development programme, implemented by Adam Smith International, The Springfield Centre and Swiss Contact, working across eight agricultural sectors in Nepal. It is not a humanitarian organisation. After the Nepal earthquake struck, the dust had settled, and the staff were accounted for and wanted to return to work, we considered what the programme team could do to help the recovery effort. It was decided that the focus should be on providing timely analysis of key markets to the wider development community, and introductions to key players who responders could work with in the market to help direct relief to affected communities. Samarth’s established relationships with key private and public sector players and a team well versed in conducting market analysis, would be important. 

The result was a comprehensive rapid analysis of the dairy, vegetable and agricultural inputs markets that were conducted with key industry representative bodies who had immediate access to information and contacts through their networks. With a little support, Samarth was able to build their capacity and work with them to develop comprehensive rapid analysis (based on EMMA) just over a month after the initial quake. 

Some suggested interventions in the dairy and agricultural inputs were strongly advocated at the time. For example, using the main dairy cooperative umbrella group to help assess the feed requirements of rural dairy producers, or using empty dairy tankers to transport feed efficiently and cheaply. Another suggested intervention was to work with the crop input retailers’ body to help re-stock input stores in affected areas with seeds, fertilizer and agrochemicals that could have been purchased by farming households that had been provided with cash and vouchers.

These examples and other such market-led relief interventions went largely ignored, and the aid community fell back on its traditions of conducting household assessments, and delivering items directly to them inefficiently and often too late. On reflection, the lack of uptake of market-led relief and private-sector recovery interventions and facilitation approaches was perhaps predictable. This is partly due to the culture and established working practices of the “aid industry.” Often an emergency such as the Nepal earthquake brings in a set of new development actors that are focussed on relief and are not appraised of the local context. Implementers and donors are also under pressure to act quickly and be seen to be doing so. There is therefore a fall-back on “tried-and-tested” tools that at least have the appearance of yielding quick and tangible results at the community level, and it is often felt that this is not necessarily an environment to be trying new ways of doing things.

My appeal, is for the aid industry to catch up with their rhetoric. Develop and use local networks with the private sector, not when under pressure in an emergency, but as a routine activity. Fostering business networks (such as chambers of commerce and business membership organisations) and their ability to collect and use data, which can be seen as a Disaster Risk Reduction exercise. When the emergency happens, these networks and the information they provide can be rapidly put to use to analyse the situation, deliver aid and facilitate a sustainable recovery process.

Read the report, Using market facilitation for recovery in Nepal, which looks at some of the lessons learnt from post-disaster market systems approaches following the 2015 Nepal earthquake.

Tim Stewart was the agricultural portfolio manager for Samarth and currently works for Palladium as an economic growth practice area specialist.

Kanchan Gurung is the senior sector analyst for the crops in Samarth.