World

The cost of living: COVID-19 Humanitarian cash transfers to prevent hunger and hardship

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Executive Summary

The World is likely experiencing the worst economic downturn since the Great Depression with advanced and developing countries suffering severe economic impacts and devastating consequences. Contractions in economic activity in response to COVID-19 will have a disproportionate impact on hunger in countries affected by fragility, conflict and displacement. This report finds that even in a bestcase scenario outlook for economic recovery, contractions in Gross Domestic Product (GDP) will stagnate the already limited progress made towards the global Sustainable Development Goal of Zero Hunger. We estimate 54 million additional people in developing countries will be hungry in 2020 as a result of economic downturn. This includes millions already on the brink, pushing them deeper into hardship and brutally halting their hope of recovery from conflict and crisis.

Even with an optimistic economic outlook of a recovery in 2021, we estimate that the COVID-19 shock to the economy could effectively suspend progress towards Zero Hunger by 3 years. These represent critical early years, particularly for child development, when a shortage of food can have devastating, lifelong effects on development and potential. This will have ramifications across the Sustainable Development Goals.

As things stand, the chances of reversing this grim trajectory are slim. We find people are already out of work, skipping meals, suffering food shortages and facing high food prices. Women and girls, already suffering a spike in violence, are overrepresented in the hardest hit sectors of the labour force. With few remaining options they are in increased danger of exploitation, child labour or early and forced marriage.

Countries already enduring protracted conflict and crisis, with limited health and welfare systems, will struggle to find the much-needed resources and capacity to respond. And countries hosting high numbers of refugees, with an expanded need, have fewer COVID-19 social safety nets: only four out of 10i high refugee hosting countries currently have labour market measures in place and refugees are at particular risk of exclusion from government programmes.

Global action to limit the impact of COVID-19 on global poverty is failing the most marginalised in fragile contexts who are in danger of falling through the weak national social safety nets.

The International Rescue Committee (IRC) is calling for an urgent boost in humanitarian cash transfers.
We estimate that US$1.7 billion in additional funding is required in 2020 to prevent more people going hungry in countries affected by fragility, conflict and displacement – US$760 million of this is required to respond in high refugee hosting developing countries alone.

These estimates complement other calculations of the cost of responding to the COVID-19 crisis, including the estimate made by the United Nations Office for the Coordination of Humanitarian Affairs, by quantifying the urgent need for humanitarian cash. We estimate the number of additional people at risk of hunger because of economic downturn and calculate the cost of providing a 6 month cash transfer covering the basic cost of living to those at risk in countries affected by fragility, conflict and displacement. It represents the priority ‘humanitarian cash boost’ required immediately to prevent a spike in hunger in 2020.

We cannot afford to delay or depend on fragile countries with limited resource and capacity to respond. Nor can we expect developing countries already shouldering the disproportionate responsibility of hosting refugees to be resourced and equipped to meet the drastically expanded need.

Without this short-term humanitarian boost we will pay the long-term price of hunger and poverty, with a domino effect across all of the Sustainable Development Goals. The expectation that fragile and conflict affected governments will be equipped to expand welfare as has happened in wealthier countries is unrealistic. Countries battling conflict and displacement require immediate assistance with support from humanitarian frontline responders.

Humanitarian cash transfers are a proven, cost efficient tool, delivered directly to people in need to make their own choices. IRC research shows that cash transfers can support health costs – vital now to protecting people from the pandemic – and reduce risks of spiralling debts and negative coping.

This analysis illustrates the scale of immediate need and the urgent need for action. Humanitarian organisations on the frontline, with extensive experience of delivering humanitarian cash, stand ready to fill humanitarian gaps in government responses.

This report outlines the vital economic measures the IRC is already taking to safely distribute humanitarian cash and adapt programming to fuel markets people rely on for food and livelihoods. It highlights the essential work underway to help those suffering the triple threat of COVID-19, hunger and poverty to safely adapt their livelihoods to a new economy and way of working, building resilience in the face of an uncertain future.

There is a narrow window for collective action. In the short term, it is imperative that humanitarian actors are resourced and mobilised to meet the immediate expanded need. In the longer term, reforms are needed to unlock economic opportunities for the most marginalised who will require long term, flexible support to adapt and rebuild their lives as part of more inclusive, resilient and sustainable economies.

Recommendations

• Mobilise $1.7 billion in 2020 to limit the threat of hunger in countries affected by fragility, conflict and displacement. There is a vital role for bilateral donors, the private sector, international financial institutions and G20 countries in particular to play in both mobilising this additional, immediate funding and resourcing long term, economic recovery.

• Make sure humanitarian cash transfers and public services reach the most marginalised humanitarian and displaced populations and respond to their needs and preferences.

• Reach those at risk of exclusion with humanitarian cash and other essential services by improving coordination and collaboration between national governments, front line humanitarian responders, multilaterals, NGOs and the private sector to rapidly respond.

• Rebuild more resilient, sustainable and inclusive economies with independent, climate resilient seed and food systems.