Blockchain in International Humanitarian Aid Distribution
International humanitarian assistance is extremely crucial in times of wars, natural calamities, poverty, famine, floods, earthquake, and other critical situations. Organizations, governments, charities and international agencies fulfill the needs of millions, including the need for food, money, medicine, shelter and more. But providing humanitarian assistance is not always straightforward. Corruption, delays, lack of record-keeping, and fraud are possible, as are problems in determining who receives aid and who doesn't. One way blockchain technology can address some of these challenges is by creating a more open, secure and transparent process.
Blockchain – a digital system that records and stores information. The information is stored digitally in an ordered sequence of “blocks.” If it is recorded properly, it's very difficult to edit it secretly. The same record can also be access by different persons or organizations. This is unlike a conventional database which can be owned by a single entity. I think this feature is useful in international humanitarian aid as there are many organizations that are involved in one aid program.
Corruption is one of the big issues that humanitarian aid faces. Funds and supplies designated for the poor or the displaced can often be misappropriated or used for other purposes before they can benefit the intended recipients. Blockchain can contribute to mitigating this issue by providing transparency on transactions. For instance, if a supply of $1 million is sent by an international organisation for food distribution, blockchain can document when the money was sent, to whom and how the money was used. The funds are tracked by the authorized organizations. While this helps to reduce corruption, it does not eliminate it entirely.
Another benefit of blockchain is that it enhances transparency. Traditional aid systems can have a variety of siloes: governments, banks, charities, suppliers, and aid agencies keep information separate. This may make it hard to determine exactly what happened to the aid. In the case of blockchain, authorized users are able to access a shared record. They are able to observe significant details involving the flow of funds, goods or services. This can help to build trust among donors, humanitarian organisations and communities receiving assistance.
One of the other great benefits is quicker delivery. In times of disaster, someone might need assistance right away. The flow of traditional financial systems can be slow at times, particularly for those who do not have bank accounts, or for payments that cross the international border and multiple organizations. Another way of transferring assistance may be by web-based digital payments using blockchain. For instance, an aid organization can distribute electronic currency to those families that qualify, which can be used to purchase food or other needed supplies from an approved provider. This can help to minimize some of the distribution delays.
Blockchain can also be helpful to those that lack traditional identification documents. Passports, identity cards or other important papers can be lost by refugees and displaced persons when they flee from their homes. An effective digital identity management system can assist humanitarian actors to identify individuals and ensure that vital information is retained. This can facilitate the provision of aid to displaced persons in various places, if planned properly. Such systems ought to respect the privacy of the people, however, and should not put vulnerable people at risk.
The other possibility where blockchain can help is the distribution of physical items. There is more to humanitarian assistance than just funds. Food, medicines, clothes, clean water equipment, tents and other items are also included. Blockchain can track the movement of these items through suppliers, into the warehouse and out to DCs. This can assist organisations to understand the amount of aid acquired, its location and whether it has arrived at the target. This kind of tracking can also minimize the possibility of a counterfeit or stolen medicine impacting the supply chain for medicines.
Blockchain can be even more useful with the help of smart contracts. A smart contract is a computer program that automatically executes an agreement upon the occurrence of certain conditions. For instance, if a supplier is providing food, an aid group could set up a mechanism for paying after a certain amount of food has been transported to the area. This can help to streamline some transactions and avoid excess paperwork. I believe smart contracts will be a useful tool for humanitarian organizations to be able to link financial support with clear delivery conditions.
While these are all the benefits, blockchain isn't a foolproof system. Serious challenges need to be taken into account. There are many people in crisis areas who either do not own a smartphone, have no reliable internet, lack electricity, or have limited digital knowledge and are unable to utilize blockchain systems. Where aid programs are entirely reliant on digital technology, there is the possibility that some of the most vulnerable individuals can be left behind. This means that humanitarian organizations need to be able to offer easy alternatives and ensure that technology is not a new obstacle to access to assistance.
One of the other areas of concern is privacy. Humanitarian agencies work with confidential data on refugees, children, war victims, and the poor and oppressed. When the personal information is exposed in the wrong way onto the blockchain, it can cause significant issues. Blockchain systems must be therefore designed to not store public sensitive personal data. There should be robust security, restricted access and appropriate data protection regulations.
The costs and technical skills are also concerns. To establish and run a blockchain system, one needs skilled people, proper infrastructure and, of course, good planning. However, small humanitarian organizations might not have the funding or technical expertise to develop these systems. There are some solutions that governments and international organizations can develop together to make them affordable.
To summarize, blockchain can be used to enhance the distribution of humanitarian aid across the globe by making it more transparent, less prone to fraud, easier to keep track of, better for digital payments, and more manageable for distribution. Blockchain is not a magic bullet, though. It must be part of a good leadership, humanitarian policies, privacy protection, adequate identification systems, and support for those who are not so technologically advanced. The role of blockchain in humanitarian aid, in my opinion, is not so much the technology itself but its ability to be used to ensure that humanitarian support is provided in a responsible manner to those who need it most. Blockchain has the potential to be a valuable asset in developing a more transparent, efficient, and trustworthy humanitarian aid system, if we design and manage it properly.