Danish Ambassador to the UN: Unrestricted funding is essential for refugee responses

In 2015, new refugee crises erupted in amongst other places Burundi, Nigeria, Ukraine and Yemen. The need for humanitarian assistance was acute and there was no time to wait for aid organisations to appeal to donor countries. As a measure of initial crisis response, the UN Refugee Agency, UNHCR, used […]

By: Ambassador Carsten Staur, Permanent Representative of Denmark to the United Nations in Geneva. Translation into English by UNHCR Northern Europe. | 24.11.2017

Ethiopia. South Sudanese people seek refuge. © UNHCR/Catianne Tijerina

In 2015, new refugee crises erupted in amongst other places Burundi, Nigeria, Ukraine and Yemen. The need for humanitarian assistance was acute and there was no time to wait for aid organisations to appeal to donor countries. As a measure of initial crisis response, the UN Refugee Agency, UNHCR, used the supply of unearmarked contributions, which are contributions that have not been set aside by the donor countries for specific operations or regions.

The supply of unrestricted financial funds contained the Danish contribution of DKK 160 million, which the Refugee Agency received at the beginning of February. A large part of the contribution was originally used to finance the South Sudan regional refugee response, to assist both internally displaced persons and refugees fleeing to the four neighbouring countries.

 “Unearmarked Danish financial assistance is very valuable to UNHCR. One Danish Krone is not just one Danish Krone. The funds are used and redeployed multiple times, thereby enabling uninterrupted implementation of emergency operations”, says Carsten Staur.

As earmarked contributions were made for situations and crises by other donor countries, the Danish funding was subsequently withdrawn from South Sudan and allocated to Burundi, where the regional appeal was launched in May 2015 and then revised in August and October.

Flexible funding

The Burundi operation was complicated and involved many different efforts – both in terms of child protection and combatting sexual violence, as well as more traditional efforts such as the establishment of camps and the registration of refugees.

The usage of unearmarked Danish funds in Burundi allowed for the implementation programmes as fully as possible, so it was the need of the refugees and not the ‘favourite projects’ of donor countries that governed the execution of the operation.

Some of the funds were then withdrawn once again, as they were replaced by earmarked contributions from other donors, and thereafter allocated to the Ethiopia programme to help many unaccompanied children who arrived in Ethiopia from Eritrea. Danish funds were also used to finance efforts in Ethiopia to prevent ‘trafficking’ and human smuggling, one of UNHCR’s main priorities in the Horn of Africa.

The unearmarked contributions provides UNHCR with operational flexibility. The donations make up UNHCR’s supply of unrestricted funds and are allocated when the need arises and can be used again and again throughout the year. Ultimately, these contributions will probably either be reserved as support to one of the highly prioritised but underfinanced refugee responses, which UNHCR has many of, especially in Africa, or to partially financing one of the global responses or programmes, which also have difficulties to attract sufficient funds as they are not allocated to a specific country. Programmes that, e.g. strengthen the health efforts among refugees or secure drinking water or sanitation.

The Grand Bargain

At the humanitarian top meeting in Istanbul in May 2016, aid organisations and big donor countries reached an agreement – the Grand Bargain – which should ensure a more efficient use of humanitarian aid. The organisations should be more transparent, avoid overlap, ensure better and joint needs based assessments as a basis for action and focus more on assistance in form of cash/debit, which gives the people in need more independence and more opportunities in relation to addressing the individual needs of a refugee family.

Moreover, it was agreed that donor countries should also reduce and harmonise the reporting requirements they impose on organisations – which costs them a lot of administrative resources. They should especially move towards a more flexible funding approach – including ‘unearmarked’ or ‘soft earmarked’ contributions, which the organisations can use for the needs that will erupt throughout the year – instead of limiting themselves to the donor country’s preferences.

Many donor countries have in recent years gone into the opposite direction and increased the amount of ‘hard earmarked contributions’ which only can be spent on pre-defined activities. The arguments in favour of this approach have been that it is difficult to report on unrestricted contributions, which cannot easily be traced all the way to individuals in need, implying that it is missing a ‘narrative focus’ with depictions that can clearly explain the impact of the funds.

Funding to UNHCR in 2015

UNHCR received in 2015 nearly USD 3.4 billion from donors to international refugee responses – a lot of money, but still only half of UNHCR’s budget and what the organisation would need.

Of the total contribution in 2015, only 15 percent was not earmarked, totalling USD 514 million. Nearly two-thirds (63 percent) was hard earmarked and almost a quarter (22 percent) was soft earmarked.

In Denmark’s case, almost 40 percent of the total contribution in 2015 was non-earmarked (USD 28 million of the total Danish contribution of USD 73.1 million). The rest was predominantly soft earmarked contributions. Denmark is clearly amongst UNHCR’s best donors in this area.

Non-earmarked Danish development assistance is very valuable to UNHCR. One Danish Krone is not just one Danish Krone. The funds are used and redeployed multiple times, thereby enabling uninterrupted implementation of emergency operations.

Original article published at http://www.altinget.dk/udvikling/artikel/152355- (23 November 2016)