How do you get communities living on remote islands in the middle of the Pacific back on their feet after a major disaster? The use of blockchain technology by local businesses might be the answer.
Vanuatu rarely makes the headlines, and when it does, it’s often in relation to its vulnerability to climate change as a Small Island Developing State (SIDS) and its elevated risk of natural hazards, from volcanic eruptions to cyclones and tsunamis. The country faced a historic cyber-attack on public services last month. In May, its parliament declared a climate emergency, and at COP27, Vanuatu led a group of 17 countries who drafted a UN resolution asking the International Court of Justice advisory opinion about the harm induced by climate change.
Despite the enormous challenges, the grit and innovative spirit of the people of Vanuatu is remarkable: the country has committed to one of the world’s most ambitious climate plans, aiming to generate 100% renewable electricity by 2030. It’s one of the members of the unique OCHA/UNDP supported Connecting Business initiative, which transforms the way businesses engage in emergencies. The Vanuatu Resilience Business Council, CBi Member Network in the country, is leading private sector engagement in disaster risk management. In partnership with Oxfam, VBRC piloted a blockchain-powered cash transfer programme to help communities recover better from the combined impact of the COVID-19 pandemic and a devastating category-5 cyclone that hit the country in 2020.
The programme provided mobile cash transfers to families, allowing them to choose the recovery items they needed and purchase them by using a simple tap-and-pay card system. Local suppliers across Vanuatu’s dozens of islands, equipped with smart phones, were selected, and trained by VBRC. That may seem simple – and it is – but it’s also a significant shift from the way traditional aid has been organized.
According to Oxfam, “[this solution] is saving costs of distributing aid, reducing delivery times, and bringing more transparency and accountability to the process. It offers an opportunity to improve how aid is delivered without compromising the dignity of the beneficiaries.”
Targeted communities received support in a more dignified way. They were able to use the funds as appropriate for their specific needs – whether that meant food or shelter or a combination thereof. The use of local suppliers was key, too, as they were already in place and integrated into the community. Getting more sales in the aftermath of a disaster supports their recovery as well.
Implemented in 2020-2021, this “Unblocked Cash Programme” involved 19 partners and 345 small businesses across three provinces of Vanuatu. The training provided to suppliers ranged from gender and good business behaviour norms to electronic payments via a smartphone application. With an economy often based primarily on cash transactions, only 37% of the population in Vanuatu have access to formal banking systems. As such, several the vendors had never used a smartphone before, so the training extended to additional financial literacy support.
The report published by VBRC, with support from CBi, on “The Unblocked Cash Experience in Vanuatu: Private Sector Implementing a Cash Transfer System for Humanitarian Response” presents lessons learned and good practices from this pilot experience. It gives insights on what worked and what could have been done differently from vendor selection and training to gender considerations.
With this pilot programme that benefitted thousands of families in Vanuatu, the potential is there for replication and scaling-up, improving the offering based on lessons learned and making disaster resilience and recovery faster, better, and more dignified.
“This programme is just one example of the power of the private sector when it brings its skillset, innovative mindset, and access to a partnership with humanitarian actors,” says Glen Craig, VBRC's Chairperson. “We were really happy with the results and look forward to seeing such solutions be taken to the next level – by us in Vanuatu, but hopefully also by others worldwide who can learn from our experience.”