From reactive to proactive: how blockchain is revolutionizing the delivery of anticipatory aid
In recent years, the frequency and intensity of natural disasters, man-made crises, and extreme weather events have escalated at a dramatic rate. This alarming trend underscores the need to reevaluate how we deliver humanitarian aid, ensuring it gets to survivors and vulnerable communities as quickly as possible. Traditional response mechanisms, which are typically reactive in nature, are struggling to support the increased need for emergency aid, calling into question the need for new approaches to delivering aid. This is where anticipatory aid comes in, which aims to pre-emptively provide emergency aid to vulnerable communities, before the disaster or extreme weather event even happens.
In this article, we break down the difference between traditional aid models and anticipatory aid, and the role blockchain can play in improving how anticipatory aid is delivered, ensuring the mechanisms are in place to support vulnerable communities who are most at risk.
Traditional Aid Models vs. Anticipatory Aid
The humanitarian aid landscape has relied on reactive mechanisms, which distribute aid to survivors after the crisis has occurred. These conventional frameworks, while vital, often face significant logistical and bureaucratic challenges, delaying relief efforts and complicating the delivery of aid in post-disaster scenarios. Following disasters, humanitarian actors such as NGOs and governments may face myriad challenges impacting their ability to deliver aid, including a lack of communications infrastructure and logistical networks, the breakdown of the overall security situation, intense media attention, and more.
As a result of these complexities, reactive aid models may run into delays, cost overruns, and inefficiencies, all impacting the ability to get aid to those in need as quickly as possible. The need for effective coordination among various actors, including local governments, humanitarian organizations, and private sectors, becomes critical to overcome the inefficiencies inherent in post-disaster relief. However, coordination challenges, especially following large-scale disasters like the Turkey-Syria earthquakes, highlight the difficulties in resource allocation and operational execution among diverse actors. This lack of coordination can lead to redundant efforts and the inefficient use of resources, impeding the ability to deliver aid effectively.
In contrast, anticipatory aid (also known as anticipatory action) advocates for a more proactive approach, utilizing predictive analytics and early warning systems to prepare for and mitigate the impact of potential crises. This forward-looking approach aims to mobilize resources and aid before a disaster strikes, thus reducing the immediate and long-term impacts on affected populations. The shift towards anticipatory aid is grounded in the premise that pre-emptive measures can significantly reduce the human and economic toll of disasters, resulting in saved lives, while preventing displacement, loss of livelihood, and preserving human dignity. In fact, one study by the UN Food and Agriculture Organization (FAO) found that every dollar invested in anticipatory aid can result in seven dollars in benefits and avoided losses for impacted families.
By investing in early warning systems, predictive analytics, and community preparedness, the humanitarian sector can transition towards a more proactive, efficient, and impactful aid delivery model. This shift is not without its challenges, including the need for accurate disaster prediction and securing pre-emptive funding. However, the increasing severity and frequency of natural disasters globally underline the critical need for a proactive approach in humanitarian aid.
Blockchain and Anticipatory Aid
While anticipatory aid has been around for a while, the emergence of blockchain technology stands to disrupt how anticipatory aid is delivered, providing new tools to improve the early warning systems, the delivery of funds to vulnerable communities, and the auditing and reporting of anticipatory aid efforts.
Blockchain Oracles and Disaster Forecasting
Blockchain oracles, which connect off-chain data (such as weather forecasts) and blockchains, can play a pivotal role in forecasting disasters or extreme weather events. By integrating real-time data from various sources, such as satellite imagery, weather stations, and IoT sensors, blockchain oracles can enhance the accuracy of predictive models. This integration enables the timely and automatic activation of aid protocols, ensuring that resources are mobilized before a disaster strikes.
A great example demonstrating the potential of blockchain oracles is Etherisc, a decentralized insurance protocol that makes use of Chainlink oracles to monitor meteorological data and yield data for smallholder farmers. In the event of extreme weather and crop loss, funds are automatically paid out to smallholder farmers without them even needing to submit a claim, helping to create a more efficient and cost-effective process for paying out funds. Although this example is reactive, it demonstrates the potential of blockchain-based oracles to revolutionize disaster forecasting efforts.
Smart Contracts and Automated Aid Delivery
Stablecoins, cryptocurrencies that are designed to be pegged to a certain currency such as the US Dollar, can facilitate the instant transfer of funds to affected communities. Unlike traditional banking systems, which can be slow and encumbered by cross-border transaction complexities, stablecoins allow for rapid, borderless, and secure transactions. This capability ensures that financial aid reaches those in need swiftly, enabling them to take necessary actions in anticipation of a disaster.
Many organizations have already experimented with stablecoins as a way to deliver emergency aid, including the UNHCR, who partnered with stellar to deliver aid via the USDC stablecoin to Ukrainian’s impacted by the war. By leveraging the Stellar Aid assist platform, it allowed aid to be delivered instantly and directly to those in need, which can be accessed via their smartphone, while ensuring full traceability. Partnerships were also formed with local off-ramps, ensuring that participants did not need a bank account to receive funds.
In the words of Oleksandr Bornyakov, Deputy Minister of Digital Transformation of Ukraine on IT industry Development:
“Today, we can see how blockchain technology allows us to scale humanitarian efforts in a way that wasn’t possible before. For fleeing Ukrainians, and primarily for those whose banks are inaccessible, this pilot project providing humanitarian assistance using a digital wallet, will serve as a possible lifeline for survival. The project itself is a vivid example of how blockchain has the potential to transform and revolutionize the way humanitarian funds are allocated. The use of blockchain technology allows humanitarian organizations such as UNHCR to be more transparent and accountable and ensure that the most vulnerable people will have access to funds provided in their name.”
On-Chain Data for Transparency and Accountability
All transactions recorded on a blockchain are immutable and traceable, providing a transparent audit trail for the delivery of anticipatory aid. After all, the delivery of humanitarian aid can be extremely complex, involving numerous actors and recipients, and can often involve corruption and the loss of humanitarian funds. By creating a clear, transparent, and auditable trail of transactions, it can help ensure that the funds are actually going to those who need it most, while making it much harder for bad actors to nefariously divert funds. At the same time, it opens the door for NGOs to transparently share their data with the community, helping improve coordination and donor trust.
A great example of the power of blockchain for real-time data sharing and reporting can be seen in ImpactMarket’s Global Dashboard. ImpactMarket is a Web3 project that delivers on-chain microcredit and universal basic income (UBI) to the last mile. They maintain a global dashboard that makes it easy to see where funds have gone, including a breakdown of demographics and disbursements by region. and disbursements by region.
Project Example: Anticipatory Cash Transfers in Kenya
A prime example highlighting the role blockchain can play in anticipatory aid is Mercy Corps Ventures’ anticipatory cash transfer pilot project in Kenya. For this project, Mercy Corps partnered with Fortune Credit, Shamba Network, and DIVA Technologies to test the use of smart contracts to automate the delivery of anticipatory aid.
The pilot project focused on two pastoralist communities in Kenya who are particularly vulnerable to the impacts of climate change, especially considering the recent multi-year drought in the Horn of Africa. The result has been the loss of over 7 million livestock and has put millions of individuals at risk of starvation.
This pilot is centered around a smart contract, which holds donated funds intended for pastoralists, which automatically disburses funds when certain pasture conditions are met. They make use of an indicator called Normalized Difference Vegetation Index (NDVI) to assess pasture conditions, with vegetation data being collected by satellite and fed into an oracle developed by Shamba Network.
Source: Mercy Corps Ventures, 2023
The hypothesis behind the pilot project is that, by making use of blockchain tools like oracles and smart contracts, it will result in the more efficient delivery of humanitarian aid, reducing both the time and cost to get the aid into the hands of pastoralists, while improving their livelihoods by giving them the financial means to better protect their livestock, families, and communities, leading to more climate resilient communities.
We had the honor of interviewing Timothy Asiiwme, Innovation Project Manager at Mercy Corps Ventures, on the Crypto Altruism podcast where we discussed this pilot project.
Conclusion
The shift towards anticipatory aid, amplified by the capabilities of blockchain and Web3 technologies, represents a transformative leap in humanitarian assistance. By adopting a proactive approach, leveraging predictive analytics, and harnessing the efficiency of smart contracts, blockchain oracles, and stablecoins, we can significantly reduce the human and economic costs of disasters. The integration of blockchain into anticipatory aid not only brings immediate benefits to vulnerable communities but also sets a new standard for the humanitarian sector at large. In embracing this shift, we pave the way for a more resilient, transparent, and responsive aid system, capable of better meeting the challenges of an increasingly unpredictable world.
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