Economic Recovery in Humanitarian Situations

Economies of regions in crisis often suffer from the supply of free handouts with negative price effects, thus suppressing local production of food or outcompeting local trade. Labour markets are distorted with unskilled labour of displaced populations offering labour below a minimum requirement and skilled labour benefitting from relief agencies’ high wages. Opportunities of qualifying relief recipients to participate in the local economy are rarely utilized. In addition to the lost economic opportunities, this often leads to conflict between the local population on one side and relief providers and beneficiaries on the other side.

Linking Relief, Recovery and [economic] Development (LRRD) may be an overused phrase in humanitarian thinking, yet practical experience shows that with a close look, good listening and some imagination phantasy, much more can be done than keeping victims of disasters alive.

SEEDwork experts have demonstrated that relief items, including food, can be purchased from local or regional sources, thus not only reducing transport cost, but strengthening the recovery of local business. Through vouchers for food or agricultural inputs, recovering farming communities and trade can be supported and the choice of relief items diversified. Production of essential household items like blankets, clothing, kitchenware, combined with training, can enhance relief supply and install sustainable value chains, sometimes with tangible positive effects on income for rural women. Training and local sourcing of building materials, for example, can improve earthquake resistant construction and revive post-earthquake trade and construction business.