Blockchain Tech and Disaster Relief | Carthago

The historic precedent of disaster recovery has been critiqued as exploitative and inefficient, Blockchain offers possible solutions

Learning Objectives

●Introduce Disaster Capitalism

●Understand the economic history of Haiti and recognize its need for innovative solutions

●Introduce the use of Blockchain as a possible solution

Abstract

The last century has seen the global rate of death due to natural disasters decline tenfold with a drop from around 520,000 in the 1920s to 45,000 in the 2010s. Much of this improvement has been a product of the ever-increasing rate of globalization that has seen global supply chains span all corners of the world. As the international community has grown in its interdependency with one another, both disaster preparedness and response have seen significant improvements. That being said, the earthquake of Haiti in 2010 demonstrates the need for innovative solutions to bring increased security to the communities receiving aid. As this globalization previously mentioned continues to grow, many scholars of global economics have detailed a distinct connection between imperialistic practices of primitive accumulation with disaster response in a term referred to as “Disaster Capitalism.” This imperialistic practice can be seen with powerful governments or agencies that parade grand tales of selfless aid while in reality pushing economic trade deals that cripple the agency of local economies. Blockchain technology provides an alternative for areas affected by disaster to receive intended aid in a significantly more transparent and equitable nature when juxtaposed with traditional centralized institutions.

The Institutional Problem Of Disaster Capitalism

The 2010 Earthquake in Haiti is one remembered by countless Americans as a time of American selflessness taking center stage to the world as a shining beacon of prosperity and opportunity. Musical pieces like “We are the World”(2022) assembled swaths of celebrities to provide their expertise on international disasters to further incentivize the eventual 13.5 billion dollars that were committed to the Haitian economy (Helm, 2020). This theatrical display of American ideals inspired great levels of financial commitment across the world with hopes of seeing an independent and powerful Haiti rise from the ashes better than it was before. A decade has since passed and with it, many Haitians report the only improvement personally being able to speak to is the removal of rubble from the streets (Knox, 2015). While this is perplexing at first glance, the darker reality is uncovered when looking into the economics behind the ‘development’ plans in place. ”USAID has spent about $1.5 billion since the earthquake… Less than a penny of every dollar goes directly to a Haitian organization (Knox, 2015).” Immediately following the devastating earthquake in 2010, the Clinton foundation took undertook a campaign to “Build Back Better” the Haitian economy. Claiming to bring increased industry as well as rebuilding the communities that faced upheaval from the earthquake, the foundation promised to bring resiliency to the Haitian Economy. With USAid and the Clinton Foundation working hand and hand, an in-depth analysis of economic distribution reveals underhanded motivations of disempowering local economies, increasing their dependency on international organizations, and thus further entrenching local communities and economies in cyclical poverty. Of the 90 thousand houses promised to be rebuilt, USAID has stated that it will only be able to carry out the construction of as low as 3,200 of the houses at costs close to double the initial offer (Cassata, 2013). Furthermore, an incredible 170 million dollars has been put towards a powerplant that has seen significant impediment due to lack of ability to meet unrealistic timeframes. This mismanagement of major infrastructural projects left Haiti with a factory in which required hundreds of millions of dollars to fix which it’s unlikely Haitian investors are interested in fronting the bill (Baptiste, 2014). What’s important for citizens of developed countries to realize is not only deceit of the Haitian people but the American people as well. Between 2010 and 2013, USAid pulled together a collective 651 million dollars in taxpayer revenue to disenfranchise and disempower communities in their most vulnerable state immediately following a devastating natural disaster (Staff, 2013). The U.S Government Accountability Office reports costs of 33,000 for each housing unit built compared to the international aid agency Mission for Hope which can build a house for 1/5th the price (Mission of Hope, 2022). Where Mission for Hope hires local contractors as a way to both save costs and empower local communities, USAid “had to fly in, rent hotels and cars, and spend USAID allowances for food and cost-of-living expenses”. Furthermore, “Danger pay” was implemented to which international workers would be paid 50% more for their efforts (Knox, 2015). Finally, the historical precedent for major building projects consists of a competitive bidding process in which companies advertise their expertise and ability to tackle the job. What was found upon deeper inspection of this process was it was the farthest thing from a competitive open process with a strong correlation being discovered between cooperations that donated to the Clinton campaign and being chosen for projects in Haiti. Clayton Homes, a construction company owned by Warren Buffet who generously donated to the Clinton campaign, was given a contract to construct “hurricane-proof shelters” for those affected by the disaster. This project ended in disaster with shelters being “structurally unsafe, with high levels of formaldehyde and insulation coming out of the walls. There were problems with mold and fumes. The stifling heat inside made Haitians sick and many of them abandoned the trailers because they were ill-constructed and unusable (O’Connor, 2016).” USAID’s “Build Back Better” upon deeper inspection of the economic distribution is critiqued as being a manipulative and exploitative reach to profit off Haitians in their most vulnerable time. Haitian mining representative, Samuel Neusner, speaks on this deciet “Neither Bill Clinton nor the brother of Hillary Clinton are individuals who share the interest of the Haitian people, They are part of the elite class who are operating to exploit the Haitian people(Dinesh D’Souza, 2016).” With only 1 percent of aid put towards Haiti actually making its way to local groups, on claims of spreading prosperity, USAid further entrenched local communities into cyclical poverty through the Clinton foundation preoccupation with valuing the interests of generous campaign donors over the wants and needs of the Haitian people. The practice of disaster capitalism has acted in the last century as an avenue for powerful industrialized nations to foster continued imperialistic practices under the veil of humanitarianism.

Haiti, The Republic Of NGOs’

Currently, within the borders of Haiti operate around 10 thousand non-governmental organizations (Baptiste, 2015). Many of these organizations operate on their own unique technological infrastructure having independent motivations and aspirations between not only each other but the local communities as well. Following the 2010 disaster, the Haitian government was entrusted with less than 1% of the funds sent as emergency relief with the large majority of funds finding its way into the hands of international NGOs (Haiti: Where Is the Money?, 2012). With the continual financial support from these foreign NGOs along with the blatant disregard for truly Haitian infrastructure, modern-day Haiti has up to 80% of its public services provided by NGOs (Staff Reports, 2020). Having a limited understanding of local cultures and traditional practices, many of these NGOs have proven to be ineffective in generating Haitian financial independence. Similar to the Clinton Foundation, many NGOs are intensely critiqued by Haitian locals due to the standard of many NGOs refusing to empower and employ locally. Instead hiring highly paid staff from overseas that must be accommodated for all forms of travel and stay.

A Nation Founded on Debt

Following the Haitian war of independence against its french colonizers. A slave rebellion was recognized as a serious threat by the founding fathers of the young United States who had invested interests in keeping the incredibly profitable slave trade vibrant in the global economy. An oppressed slave population made war with Napoleon Bonapart, leading what was believed to be one of the world’s strongest militaries at the time, and won. With colonial powers founded on the profits of the slave trade, Both the United States and France cooperated in the stunting of this young nation’s development. In the year 1825, more than a quarter-century since the rebellion, the French crown sent an armada of warships to Haiti to demand reparations for the loss of property experienced by slaveowners. Facing the two options of either agreeing to pay the French crown 150 million francs (a price 10 times the amount of what the United States paid France for the Louisianna purchase 20 years before) or face re-enslavement of their people, Haitian leadership was backed into a corner and forced to submit. Furthermore, due to the threat of the Haitian slave revolt inspiring rebellions across the new world, Colonial influence led to an economic embargo of Haiti. This embargo placed on top of a nation 150 million francs in debt meant the Haitian government taking out crippling loans from french banks further entrenching themselves in a cycle of debt and poverty. From the signing of this contract to the year 1947 when the United States officially left Haiti, as much as 40 percent of the nation’s national income was siphoned to both the United States and France to service debt repayment (Rosalsky, 2021). To restate, The United States (a nation that had outlawed slavery at this point for most of a century) and France in the 1940s were siphoning nearly half the income of the island of Haiti to reparations for a slave rebellion that happened over a century before. Since the age of exploration, powerful nations have exploited the local economies of countless underdeveloped nations with Haiti being a striking example. As the centuries have progressed, so has the evolution of western imperialistic influence. Where the 19th century had a more cut and dry approach with kings sending floating armadas to small island nations, the 21st century sees the same result through deceitful politicians claiming positions of humanitarianism while in reality making decisions based on profitability. Future efforts of disaster relief must learn from the mistakes of the past and look for solutions that empower local communities rather than decimate their economic independence. The decentralized nature of blockchain offers possible new and innovative solutions to this dilemma.

Finding order in Chaos

With thousands of independent organizations flooding into nations following a disaster, this means countless lines of communication, supply chains, donations, and volunteers that organizations must attempt to keep track of while attempting minimal overlap and confusion with other independent agencies. Recognizing an incredible need for interoperability between organizations, Chainyard, a blockchain development company, partnered with the Miracle Relief Collaboration League for that reason. To understand how blockchain networks bring in this increased interoperability, its important to understand how the technology works. To state simply, blockchain allows for ownership on the internet that can be tracked. If John is looking to send Mary a Microsoft word document, he can only send her a copy of that document, he is incapable of truly giving her ownership. This is due to the fact that the Internet as we know it today which I will refer to as Web2, provides users with the ability to read and write, but not own. Blockchain, or Web3, allows users to have this ability. Furthermore, utilizing a distributed ledger in which all changes made to the network are present to all within the network. Blockchain presents unprecedented capability for supply chains to be tracked and distributed in a transparent and immutable nature.

Challenges of Relief Addressed with Blockchain Technology

Distributed ledger technology or DLT for short is central to the understanding of how the implementation of blockchain technology will foster radical change in disaster relief. Where centralized models see a consolidation of data and influence into the hands of a few, blockchain’s decentralized distributed ledger provides both transparency and accessibility. The following infographic demonstrates this understanding.

The first and most area that this brings improvement in terms of disaster relief is donations and the transparency behind them. Haiti details this example greatly with the billions of dollars put towards recovery was a one-way transaction in which doners saw little implementation of the money they donated due to it getting lost in a convoluted supply chain. By increasing the public integrity and transparency of where donations are being distributed, doners are given increased satisfaction by being able to see where their money was put towards. Furthermore, with immense numbers of aid agencies on the ground during a disaster, efforts for relief have often been duplicated leading to waste or even in some cases fraud was rampant. One such example saw a contractor try and profit off the tragedy that was Hurricane Katrina in 2005 by billing relief agencies for 66 ambulances when in reality, the contractor only provided 27 (Needs, 2017). And finally the last challenge the Mirrical foundation league went about solving for disaster relief management is the challenge of adequately and accurately recording the activities associated with relief efforts, this means being able to do things like tracking the hours of volunteers or auditing the flow of capital into efforts. Robert Bowman, one of the team members at Chainyard says as follows “Rarely does a location struck by a natural disaster lack parties willing to donate aid, in the form of food, medicine, shelter and other essential supplies. The problem is one of logistics. Effective emergency response to a natural disaster requires rapid, coordinated action among multiple parties (Joseph, 2020).”

Results of the Pilot Program

As it currently stands, blockchain networks require increased scalability if they are to see full integration as an alternative to traditional systems used in disaster relief. Just as the internet took time to develop into lightning-fast speed that we currently see today, the same can be said for the technology behind blockchain. At its core blockchain is a network, These networks as platforms to do business and communicate with one another, and current technological advancements within the industry limits. With experts within the industry expecting global scalability to be reached in the next decade (Geroni, 2021), projects like Chainyard’s collaboration with the Miracle Relief Collaboration League present pilot programs in which the use-value of blockchain can be observed and tested without stressing the network technological limitations. The following graphic is a sample screen from the application.

This interface would act as the distributed ledger to all available parties where cooperating aid agencies can achieve greater levels of interoperability. Chainyard reports success in being able to record and request help from a smartphone anywhere at any time, success in registration of all stakeholders, success in recording donations as well as the management of volunteer activities, and finally succeeded in the verification of assistance to impacted communities.

Conclusion

Case studies like Haiti detail the story of a nation that was founded on mountains of exploitation and manipulation. This exploitation evolved through the years and with the disasters like the 2010 earthquake ravaging the local communities of Haiti, organizations like USAid carried out egregious mismanagement of donated funds that for many locals, left their communities with less economic agency than before these development agencies arrived. This mismanagement of funds was made possible largely due to the veil that’s placed over the direction of money after it is donated. Blockchain solutions like Chainyard’s collaboration with the Miracle Relief Collaboration League detail a small-scale success for increased transparency and accountability in the agencies that are coming to the aid of communities in their most vulnerable state.

References

Baptiste, N. (2014, January 24). Haiti: Billions in Aid, Pennies in Progress Since Earthquake — FPIF. Foreign Policy in Focus. https://fpif.org/23183/

Baptiste, N. (2015, July 10). Are Foreign NGOs Rebuilding Haiti Or Just Cashing In? — FPIF. Foreign Policy in Focus. https://fpif.org/are-foreign-ngos-rebuilding-haiti-or-just-cashing-in/

Cassata, D. (2013). Report finds USAID spending on aid and housing in Haiti is 30% of what was promised | The Canada-Haiti Information Project. Canada-Haiti.ca. https://canada-haiti.ca/content/report-finds-usaid-spending-aid-and-housing-haiti-30-what-was-promised

Dinesh D’Souza. (2016, July 18). How the Clinton Foundation Got Rich off Poor Haitians. National Review; National Review. https://www.nationalreview.com/2016/07/hillarys-america-secret-history-democratic-party-dinesh-dsouza-clinton-foundation/

Geroni, D. (2021, September 30). Blockchain Scalability Problem — Why is it Difficult to Scale Blockchain. 101 Blockchains; 101 Blockchains. https://101blockchains.com/blockchain-scalability-challenges/

Haiti: Where is the Money? (2012, February 26). The Arkansas Journal of Social Change and Public Service. https://ualr.edu/socialchange/2012/02/26/haiti-where-is-the-money/

Helm, V. (2020, January 20). Haiti 10 years later: What happened to the billions pledged to help the people of Haiti? Global News; Global News. https://globalnews.ca/news/6421625/haiti-10-years-later-billions-pledged

Joseph. (2020, April 14). Improving Disaster Relief Efforts with Blockchain Technology — Hyperledger Foundation. Hyperledger Foundation. https://www.hyperledger.org/blog/2020/04/14/improving-disaster-relief-efforts-with-blockchain-technolog

Knox, R. (2015, January 12). 5 Years After Haiti’s Earthquake, Where Did The $13.5 Billion Go? NPR.org. https://www.npr.org/sections/goatsandsoda/2015/01/12/376138864/5-years-after-haiti-s-earthquake-why-aren-t-things-better

Mission of Hope — Mission of Hope. (2022). Missionofhope.com. https://missionofhope.com/

Needs, R. (2017, September 6). Disaster Relief Needs Oversight to Stop Waste and Fraud. Project on Government Oversight. https://www.pogo.org/analysis/2017/09/disaster-relief-needs-oversight-to-stop-waste-and-fraud/

‌O’Connor, L. (2016, October 12). Report: Clinton Foundation donors got rich off Haiti relief efforts while Haitians live in squalor. Hotair.com; HotAir. https://hotair.com/larry-oconnor/2016/10/12/report-clinton-foundation-donors-got-rich-haiti-relief-efforts-haitians-live-squalor-n238474

Rosalsky, G. (2021, October 5). “The Greatest Heist In History”: How Haiti Was Forced To Pay Reparations For Freedom. NPR.org. https://www.npr.org/sections/money/2021/10/05/1042518732/-the-greatest-heist-in-history-how-haiti-was-forced-to-pay-reparations-for-freed

Staff, R. (2013, June 25). U.S. program to build houses in Haiti falls short, report finds. U.S. https://www.reuters.com/article/us-usa-haiti-earthquake/u-s-program-to-build-houses-in-haiti-falls-short-report-finds-idUSBRE95O1GV20130625

Staff Reports. (2020, December 12). Lessons From Ineffective NGOs in Haiti. BORGEN; BORGEN. https://www.borgenmagazine.com/ngos-in-haiti/

‌“We Are The World” — Charity Single for Haiti Earthquake. — Barbra Streisand. (2022). Barbra Streisand. https://www.barbrastreisand.com/tv_film/we-are-world-charity-single-haiti-earthquake/

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