The Arab World in Crisis: How Should Donors & Investors Respond?

Read this post in Arabic on the Microfinance Gateway >>

At the Sanabel conference in Dubai in October, it was impossible to ignore reminders of the crises enveloping the Arab World. While there are signs of some progress at the political levels, the reality on the ground in many countries remains stark.

The war in Gaza over the summer, for example, witnessed over 2,000 Palestinian lives lost, mostly civilians and hundreds of them children. Thousands of homes were destroyed; roads were obliterated; power plants were completely destroyed.

But the crisis goes well beyond Gaza. Some countries like Lebanon and Jordan are now hosting unprecedented numbers of Iraqi and Syrian refugees. Lebanon has an estimated 1.5 million while Jordan has over 600,000. These numbers are staggering for countries whose populations are only 5 million and 8.2 million, respectively. Iraq and Syria are both still in the midst of war. Yemen and Libya are both in political limbo, with frequent outbreaks of violence. Egypt’s new government appears to be stabilizing the country, but the Sinai remains a hot zone of unrest, and terrorism is a growing reality in the country. Only Tunisia and Morocco seem to be on potentially positive paths.

Photo Credit: Scott Wallace / World Bank

In light of this situation, immediately after the Sanabel conference, many donors and investors focusing on financial inclusion in the region gathered to discuss how they should respond or adapt their approaches. Should they support refugees in their places of temporary asylum? Should they help them integrate and start new lives? Can they leverage the MFIs that they have been supporting for many years to help them respond in their home countries or possibly in the receiving countries? Who should get the direct aid–the individual refugees, the communities affected by the crises, or the institutions delivering the assistance? Can they use emergency response funding to stimulate financial inclusion down the line by distributing aid via mobile or card channels?

The answers to these questions are complicated and cannot be answered in a single blog post. Over the next few weeks, several contributors will share additional insights into how they are coping and what lessons they have learned. In addition, there are several resources already available on this topic of post-crisis microfinance:

• The SEEP Network has spent many years developing the Minimum Economic Recovery Standards. The standards articulate the minimum level of technical and other assistance necessary to promote the recovery of economies and livelihoods affected by crisis. They are structured similarly to the Sphere Handbook, the set of humanitarian standards widely accepted by those working in the humanitarian field, and are considered an accompanying set of standards to them.
  
  Fourteen years ago, UNHCR and the International Labour Organization (ILO) had the foresight to develop training materials on this topic. UNCHR staff and their partners have significantly improved the way they offer economic recovery assistance to refugees. Most recently, UNCHR staff has been tackling the hardest communities to address—urban refugees.
• The Microfinance Gateway produced a succinct set of information and links to additional resources on this topic. Most recently, the Gateway has showcased an interview with Oxus about their experience in post-crisis environments.
• The Foundation for Development Cooperation’s (FDC) work after the Asian tsunami focused on natural disasters, but it still resonates and has many relevant lessons for what is happening in the Arab World today. In addition to training materials on preparedness, rapid response, and livelihood restoration, FDC also gathered a great set of briefs that highlight examples of how cash assistance programs can be used in coordination with microfinance to help restore livelihoods, as well as how savings, insurance, and microleasing can be used for risk mitigation and recovery.
• International Alert, a peace building organization, developed great materials on using market development strategies to respond after conflict.

Over the next few weeks, some of the organizations referenced here will offer additional insights on how donors can respond after a crisis.

Additional Resources:

• CGAP: brief on microfinance and tsunami
• CGAP: brief on microfinance and conflict
• CGAP: blog on mobile money and disasters
• CGAP blog on Pakistan floods

Read this post in Arabic on the Microfinance Gateway >>