Refugees: The Next Wave of Disruptors
How The Right Tools Can Reframe A Crisis
Conventional financial tools aren’t beneficial to the world’s most vulnerable -refugees in particular. Traditional banking systems are expensive and often exclude low income and undocumented customers. By providing alternative banking and payment solutions, everyone is given the opportunity to participate in the formal economy. Refugees are transplanted workers who have the potential to be major contributors. Those who fled to Europe endured untold hardships. They were extorted by criminals. They were physically threatened and often assaulted by thuggish security guards and unwelcoming locals. All were subjected to the dehumanizing experience of being rammed into trucks like cattle and stuffed onto dangerously overcrowded, unsafe boats that were unequipped with latrines. Almost all of the women were raped during the journey and many arrived several months pregnant. Thousands died along the way.
Those that managed to survive the nightmare often arrive to their new homeland as recipients of hostile treatment and prejudice -including suspicion, blacklisting and xenophobia. Despite the trauma they have suffered, refugees continue to press forward with strength and courage. They are not afraid of difficult obstacles and they WILL recover and rebuild, as long as they are not held back. The current international aid system is set up in a way that creates dependency. Refugees are by definition mobile and they bring mobile technology with them. The majority of the Syrian refugees have cell phones. A mobile solution is key. By providing assistance to refugees in a way that maximizes the path to independence, we can accelerate their social, economic, and cultural assimilation with dignity.
Studies show a net positive impact of migrants on the economy.
It has been known for years that immigrants boost wages in host countries. Using a mathematical model of the world economy, the World Bank said in a 2006 report that if 14.2 million workers moved from poor to rich countries between 2001 and 2025, raising the rich countries’ labor force by 3 per cent, the world’s yearly wages would grow by $772 billion by 2025.
The incredible resolve of the refugees and their ability to do much with very little can best be seen in the Syrian refugee camp, Domiz, located in Iraq. Camp residents have ingeniously set up shops along the road selling clothing, phones, and food at competitive prices. Despite food vouchers only being valid at markets outside of the camp, a few residents got together and started a bakery that has become the social hub of the camp. Iraqis from neighboring cities travel to this bakery to purchase bread because it’s so good. The bakery employs about 20 refugees and they sell close to 24k loaves of bread everyday.
“Refugee Republic” allows you to explore and experience something of everyday life in Camp Domiz through beautiful hand-drawn maps, photographs, and short video impressions.
“The greatest trick the devil ever pulled was convincing
the world he did not exist.”
One of the most under-researched and rarely discussed topics is corruption within humanitarian agencies. Aid flows through unmonitored channels without a clear picture of what it’s being spent on or who it’s being sent to. Tracking humanitarian funding from donors and agencies to crisis-affected individuals is virtually impossible. Funding moves through numerous transactions, each of which is characterized by varying lengths and complexity, and data on funding campaigns becomes extremely sparse after moving past the first level (such as, for example, UN agencies or the International Red Cross). Illicit financial flows cost developing countries US $1.26 trillion per year. Failure to adapt to changes in technology by clinging to inefficient, outdated benefit distribution methods is expensive and wasteful. The way in which assistance moves from one actor to another has a direct impact on the likelihood of corruption. Corruption within humanitarian relief agencies comes at the highest price of all -the loss of lives.
It’s surprising that even less research has been done on the experience of the end-user -the beneficiary receiving humanitarian assistance. Without end-user dialogue, how can we effectively measure the success of a program? 97 million people were affected by conflicts and natural disasters in 2013.
Humanitarian agencies have been overwhelmed by the extraordinary scale of crises and needs. Several top tier agencies, such as the World Food Program, have sent out “requests for information” soliciting outside solutions to help improve the efficiency of voucher distribution.
At present, there are few existing mechanisms through which to deploy financial aid during sudden on-set disasters, or to assist with protracted crises. Moreover, when a diverse range of actors — states, nongovernmental organizations (“NGOs”), and disjointed individual efforts — approach a crisis from different angles, relief efforts often wind up slow, fragmented, and prone to losses from corruption and mismanagement. A common platform that delivers uniform, timely and transparent financial access can quickly and efficiently connect crisis-affected people, communities, and bring the otherwise disjointed attempts to deliver aid into a common, auditable system.
A massive opportunity exists to make a lasting impact and to drive change.
Enable is a start-up venture positioning to be the first provider of emergency financial infrastructure.
We believe that providing the right tools is of greater benefit than continuous handouts. Our goal is to deliver customized, digital financial services to the end-users of humanitarian assistance. For those caught in the middle of a crisis, quick and easy access to financial aid is one of the most important steps to getting back on your feet. Real, lasting humanitarian aid is not about giving a fish, or even about teaching to fish — it’s about providing means for refugees to build their own fishing boats, allowing them to control their destinies and shed dependence upon relief as quickly as possible. The European Union is struggling with the disruption caused by tens of thousands of immigrants fleeing war and oppression. Enable will help make that disruption an asset by facilitating independence and self-direction, allowing the refugees to pull themselves up through hard work and grab hold of the economic ladder.
International relief and development organizations regularly disperse high volume, low value payments to millions of recipients. In emerging countries, this often involves the time consuming burden of distributing physical cash. By providing cost-effective solutions beyond stopgap measures to humanitarian agencies, funding can be disbursed quickly, fairly, and in a transparent manner. Reporting tools that are built into the platform can provide critical financial information that is needed during an emergency.
Today’s solutions are brought to you by Distributed Ledger Technology and Cryptocurrencies.
Cryptocurrencies and distributed ledger technology have made it possible to develop mobile applications that can give users a single, easily-accessible and secure location within which to store multiple assets such as e-vouchers, tokens, multiple currencies, and even identification. For refugees, this solution is long overdue!
A general lack of cohesion exists among the handful of available, designated international aid organizations. They essentially work against each other by offering multiple sources of assistance, employing disparate payout mechanisms, and making information difficult to find. Refugees report being exploited and confused when attempting to access services. Compounding these difficulties are distance and transportation costs to voucher distribution centers which are a challenge for financially insecure families. Allegations of profiteering, and female exploitation have been raised. Food and supply distributions are handed out unevenly and unfairly. There have been reports of street leaders selecting the beneficiaries. Widows have been particularly vulnerable in these situations. By having aid deployed digitally, not only are transaction costs reduced, but the aid is delivered instantly, equitably, and in a transparent manner.
The Enable app will allow users to save, spend, distribute, and receive money. Local merchants can also use this same mobile application to receive and disburse payments. For merchants that are already accepting physical vouchers, the benefits are even greater! Manual paperwork and delayed payments will no longer be an issue.
By utilizing distributed ledger technology and focusing on interoperability, it is possible to build a globally accessible, currency-agnostic platform that all responders — individuals, organizations, states and NGOs — can “plug in” to; a platform that will, furthermore, convert aid into digital assets that can be distributed instantly to mobile wallets and in a way that is fair, transparent, and accessible to all.
Permanently recorded transactions would allow data to be analyzed. This information could be used to identify which programs were effective, determine what resources will be required following the emergency, and help anticipate what resources will be needed for future crises.
The catalyst for worldwide financial inclusion?
By implementing a national, open loop system, digital aid has the potential to be the catalyst for worldwide financial inclusion. Crisis and poverty are inextricably linked: 93% of people in extreme poverty live in places that are politically unstable, environmentally vulnerable, or both. Protracted crises readily develop into self-perpetuating, vicious cycles. Thus, bridging the gap between emergency humanitarian aid and longer-term development aid is essential to overcoming disasters in the short-run and getting back on the path to self-sufficiency, economic growth and dignity in the medium- to long-run.
For example: utilizing digital aid to undertake local purchases of agricultural produce can help maximize the potential of humanitarian food assistance; simultaneously, it may ground efforts for achieving long term food security. Furthermore, the proposed infrastructure could — with unhindered, sound and timely funding — easily be integrated into broader social protection and safety net systems. Governments are the largest generator of payments. Global government payment flows were estimated at over US$40 Trillion in 2009. A shift to digital payments would likely provide entry into the broader banking system and capital markets for the hundreds of millions of the world’s unbanked populations. Financial inclusion is critical to reducing poverty, increasing mobility, and building capital.
The Last Mile
Albert Einstein was once asked how he would spend his time if he was given one hour to solve a problem. He replied that he’d spend 55 minutes defining the problem and 5 minutes solving it. Without giving a voice to the end-users of aid, we will never have all of the information necessary to make sure that scarce monetary resources are being used effectively or that those most in need of assistance are actually being helped.
