BCG partners with the WFP on refugee food security innovations in Jordan

07 June 2018 5 min. read

The UN’s World Food Programme has welcomed a review team from The Boston Consulting Group to its Jordan office according to the WFP’s latest country brief, with BCG a long-term partner and supporter of the agency’s ‘choice’ model of assistance payments.

When it comes to the ongoing plight of Syrian refugees in Jordan and the strain on an already resource-strapped host community, the figures tell the simple story; a total country population of 9.5 million, of which 2.9 million are non-citizens and refugees; over an eighth of Jordanian households already facing food insecurity and close to a sixth below the poverty line, and; unemployment now pushing toward 20 percent.

Simply, Jordan is a relatively poor nation with scant agricultural land, no energy resources and scarce water supply – ill-equipped to bear the bulk of what the UN High Commissioner for Refugees Filippo Grandi and other experts and commentators have described as the biggest humanitarian and refugee crisis of our time. Understandably then, the UN’s World Food Programme (WFP) relief effort is also considered the global organisation’s most complex operation worldwide.BCG partners with the WFP on refugee food security innovations in JordanAdding to the complexities of the response to this modern catastrophe are considerations for the benefits of modern technology in aid delivery. In 2016, the WFP launched a pilot biometric payment system for food assistance in Jordanian refugee camps, involving iris-scanning technology, with the intention to circumvent hard cash and electronic vouchers to provide greater efficiency, security and assurance.

Since then, the agency has deployed blockchain technology to support its initiatives, cutting down on transfer fees among a raft of other benefits such as greater oversight and the reduction of fraud. Robert Opp, WFP’s Director of Innovation and Change Management, said; “There are a number of potential uses of blockchain that could dramatically change the way we reach people in terms of our efficiency, effectiveness and security… We feel this is a starting point.”

Yet, the roll-out of blockchain technology has, in effect, supported a return to an old-fashioned basic; cash. In 2016, the WFP made upwards of $880 million in cash transfers, and cash-based assistance now accounts for about 25 percent of the agency’s aid delivery worldwide – allowing for, among other benefits, greater autonomy for its displaced recipients. While this is certainly a worthwhile outcome, the WFP’s primary mandate is in relieving hunger – so the question remained; does cash-based assistance provide greater food security in Jordan?

Entering the frame here, (or rejoining the stage considering the firm has been a WFP pro-bono partner since 2003) is The Boston Consulting Group, commissioned by the WFP to conduct a comprehensive study in Lebanon and Jordan on which is the most effective method for achieving higher levels of food security for refugees between electronic food vouchers and unrestricted cash. The results were unequivocal.Cash outperforms vouchers for food security for refugees in JordanIn the plainest of terms, from the authors of the in depth evaluation; “Syrian refugees in Jordan and Lebanon who received unrestricted cash had similar or better food security than those who received food vouchers. And cash did not cause harm in terms of unintended use of the assistance, effects on family dynamics, or other negative consequences that critics often raise.”

The most basic premise as to the effect of cash over food vouchers on enhancing food security, and realised in the study results, is that the flexibility of unrestricted cash improves purchasing power, allowing for greater bargain-hunting (yielding savings of up to 18%) as well as better budgetary management. Without any of the predicted downsides, cash-based assistance is a clearly better option – at least in the specific context of Jordan – and that’s without taking into account the host of peripheral advantages.

In addition to providing greater levels of food security, the cash-based system, among other benefits, also led to more frequent shopping, and thus the purchase of fresher produce – improving a range of health and nutritional indicators – along with helping to stimulate a price-competitive market economy (such as with the buzzing ‘Champs-Elysees’ market which has sprung in the Zaatari refugee camp of Jordan – its 3000 informal stalls catering to some 80,000 camp residents) as well as provide a macroeconomic boost through the multiplier effect.

This, of course, is not to mention the sense of dignity and empowerment that can be felt for individuals who have had their lives uprooted through the trust and independence of cash-based systems. As such then, with regard to autonomy, why not offer recipients the choice of personally preferred methods of assistance? This indeed was the ultimate conclusion of the BCG assessment, and the WFP has since rolled-out its ‘choice’ modality, offering beneficiaries the option of withdrawable cash transfers, food vouchers, or both.

Funding shortfalls

In its latest brief for Jordan, the WFP has stated that the programme has now extended to 188,000 participants with plans for further expansion, as well as indicating that BCG is back in the country office to provide a comprehensive overview of the payment ecosystem in Jordan to identify potential improvements in WFP service delivery – which will ‘inform decision-making with regards to WFP’s cash-based transfers activities moving forward.”

Unfortunately, the agency has also reported a ‘cash’ problem of its own, with a projected funding shortfall of over $100 million in the coming six months as confirmed donor contributions dry up. Without the additional funding, the WFP reports, it will “be forced to either significantly reduce or completely cut the assistance provided to vulnerable populations.” Some less disheartening numbers which tell another story; in April, 494,519 Syrian refugees were assisted by the WFP through cash-based transfers, while 401,108 Jordanian and Syrian children received school meals thanks to the WFP and the support of its donors.