Introduction
Military conflicts are an unpleasant but unchanging reality of the modern world. Civil wars tend to flare up in certain regions, and many aid agencies are aware of problems in specific countries. People who have to face the consequences of armed attacks have often received humanitarian assistance. However, in the case of Somalia, where civilians first received remittances, it is possible to trace a new way of supporting civilians involved in military conflict. The article “Cash is Replacing Other Forms of Aid, Even in Conflict Zones” presents a new picture of providing humanitarian aid.
It is carried out through the movement of funds into the country instead of the standard sets of products and essential items. As a justification for this measure, economists cite statistical data confirming the relevance of the new aid regime and its effectiveness in difficult situations that are complicated by conflicts within the country. The movement of cash flows in states experiencing armed conflict may be a form of assistance to the civilian population as effective as humanitarian aid, provided that preliminary analysis of risk factors has been conducted.
Article Arguments and Their Interpretation
Utility Concept
Based on the facts presented, it would appear that the evidence in favor of using the new approach to helping the civilian population is reliable. The concept of utility, which is the satisfaction of market demand for relevant goods and products, is taken into account when using financial flows as a mechanism to support people. According to the article in question, the funds transferred directly to cell phone-linked accounts have become an effective aid to the civilian population of Somalia, thereby preventing famine. If agencies had not taken this step, it is possible that any humanitarian aid in the form of food or medicine would have been stolen by rebels. Consequently, it is possible to talk about citizens’ satisfaction with the availability of the form of support now being provided to the population.
Nevertheless, based on an evaluation of the material, it can be noted that some agencies did not analyze preliminary risk factors. This is an omission, since in case of the unexpected loss of funds, such as thefts from mobile accounts, humanitarian agencies would lose $35 million. Risk factors such as the threat of inflation or the depreciation of money, the loss of currency in transactions, and other important aspects should have been better assessed. According to Crost, Felter, and Johnston, the evaluation of the financial market in a country in a state of war is an essential activity if money is transferred to the accounts of civilians. Consequently, the officials should have investigated this aspect in more detail in order to secure funds.
Production Theory
With regard to the case of humanitarian assistance to the people of Somalia, it is important to consider the factor of the effectiveness of the measures taken in terms of their impact on the domestic market. According to the text of the article, recipients have the opportunity to choose where they can spend the money, and local stores and merchants derive significant benefits. However, based on the current needs of the population, the unprofitability of certain areas should be mentioned. If a local market has an oversupply of trade services, this will have a negative effect on other industries, such as medicine or agriculture.
Therefore, appropriate planning is desirable so that recipients of financial assistance from humanitarian agencies can allocate money more prudently in order to avoid an oversaturation of the market.
Another of the article’s points that deserves attention is the call for experimenting with the provided funds. The example of the Philippine assistance program, where humanitarian agencies allocated money to promote education and medicine, provides an opportunity to draw attention to the most important areas for investment. In Somalia, where official representatives have offered to provide small business loans, the situation probably does not favor large-scale trade. Therefore, local authorities should pay more attention to the inherent needs of the population.
Conclusion
The preliminary analysis of risk factors is an obligatory measure for the transfer of funds as humanitarian aid to countries whose residents are experiencing civil war. To assess possible threats, it is essential to secure financial transactions to prevent theft. Also, the authorities should allocate resources wisely to avoid the oversaturation of one sector of the economy and the lack of investment in another one. In a state of martial law, local governments should effectively oversee the most important spheres of economic activity.
Bibliography
“Cash is Replacing Other Forms of Aid, Even in Conflict Zones.” The Economist, 2018. Web.
Crost, Benjamin, Joseph H. Felter, and Patrick B. Johnston. “Conditional Cash Transfers, Civil Conflict and Insurgent Influence: Experimental Evidence from the Philippines.” Journal of Development Economics 118 (2016): 171-182.