Aid & development, explained.
Pooled funds are generally seen to be better suited to alleviating humanitarian challenges than fragmented individual donor approaches (DFAT/Timothy Tobing)
Flexibility is essential when responding to a crisis – especially those far from home.
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Pooled funds give Australia’s new humanitarian strategy a boostPooled funds give Australia’s new humanitarian strategy a boost
Australia has a new humanitarian strategy. And while there’s not a lot to represent a serious policy shift from the previous version released in 2016, it does have a few important differences.
The previous strategy, released under the Coalition government, had emphasised disasters and climate risks. Its release coincided with the “Grand Bargain”, a landmark agreement between major donors and humanitarian organisations that aimed to close the financing gap and improve effectiveness of humanitarian action.
Reflecting the mood of the moment, the new version is slightly more tilted to dangers associated with international humanitarian law and conflict.
But the most tangible shift is an intention to increase the flexibility of Australia’s humanitarian funding by supporting pooled funds.
A focus on multi-donor pooled funds is smart. Pooled funds have grown in popularity following the 2016 Grand Bargain (although they’ve been around since 1997) and are generally seen to be better suited to alleviating humanitarian challenges than fragmented individual donor approaches. The UN’s Office for the Coordination of Humanitarian Affairs (OCHA) manages several country-based pooled funds, and has begun to roll out regional versions as well.
The idea is that a single fund, without earmarks, is the best way to provide humanitarian support that is both predictable and flexible – a hard balance. Pooled funds are also much more successful than other actors in allocating funds to local and national organisations, in line with Australia’s focus.
A $5 million Australian contribution to OCHA’s new regional Asia-Pacific fund backs up the new emphasis on pooled funds. While need is outstripping the capacity to respond – a point Foreign Minister Penny Wong and International Development Minister Pat Conroy themselves acknowledge in the strategy’s forewords – the contribution marks an important step. Such an amount won’t stretch far when considering the $3 billion damage bill from Vietnam’s recent Typhoon Yagi. Yet Australia also provided $3 million in emergency assistance to Vietnam, including $2 million over 12 months through the Australia Humanitarian Partnership. Similar assistance in future might be channelled through OCHA’s regional fund once it is properly stood up.
It makes more sense for Australia to support the established regional pooled funds for Latin America and Africa, or the country-based versions which cover much of the Middle East … compared to its much steadier involvement closer to home.
However, most Australian support should instead be directed to pooled funds outside the Indo-Pacific region. Australia already has established relationships and mechanisms to effectively deliver humanitarian relief in the neighbourhood. But when crises erupt further afield, where Australia has less of a solidified presence, pooled funds would ensure that Australia doesn’t unnecessarily add to coordination burdens and strain logistics networks.
With that in mind, it’s somewhat counter-intuitive that Australia’s only cash contribution with this new strategy is to the fledgling Asia-Pacific pooled fund. It makes more sense for Australia to support the established regional pooled funds for Latin America and Africa, or the country-based versions which cover much of the Middle East. Australia’s spending in those regions, compared to its much steadier involvement closer to home, could be characterised as erratic and inconsistent.
For example, announcements of $1 million each for the Libya floods and Morocco earthquake in September 2023 arguably would have contributed to aid fragmentation; small amounts allocated to countries where Australia has a very light footprint. That is not to discount the quality and integrity of Australian humanitarian assistance, merely to note that pooled funds exist for precisely this purpose, to minimise transaction costs and friction for support from donors who don’t maintain a large presence in the disaster zone.
Sadly, it’s not likely to be long before this fresh commitment to flexible funding is put to the test. For the new strategy to be worthwhile, forthcoming humanitarian support from Australia should be directed through pooled funds, especially for crises occurring outside the immediate region. That will also ensure Australia is closer to keeping its end of the Grand Bargain.
About the author
Grace Stanhope
Grace Stanhope is a former Research Fellow in the Indo-Pacific Development Centre at the Lowy Institute, working on the Southeast Asia Aid Map. Her work focused on tracking and analysing foreign aid and development finance flows to Southeast Asia.
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