Engagement and Facilitation with the Private Sector in Disaster Affected

Markets

Tim Stewart & Kanchan GurungSamarth-NMDP

How far have we come?

• Cash is now a recognized relief and recovery instrument

• We have a multitude of analytical tools

• The recognition and rhetoric of avoidance of undermining markets & early recovery is present

It’s been 10 years since Aceh…

But… • Capacity is low among responding agencies – especially

humanitarian agencies • Pressure to deliver quickly and visibly are high (donors,

government, agencies)• Fall-back to the comfort zone of assessment and direct

delivery

If we agree that we want to avoid undermining markets, and that cash is a valuable recovery tool:

What do we need to do differently?

1. Setting the intention – acknowledging the role of markets in recovery

2. Using a sound diagnostic process to assess impacted markets – evidence base

3. Facilitation with legitimate market players to recover

How to avoid it

RULES

SUPPORTING FUNCTIONS

• Transport & comms interrupted

• Finance is risk-averse

• Information & power asymmetry: vested

interests

• Donors, INGOs & international community

• Trust & trust reinforcing mechanisms

undermined

• Risk aversion

• Informality increases

CORE MARKETSupply Demand

Regulations

Trust & risk perception

Inputs & Services Finance

Transport Information

Rule of law

INGOs/Donors/UN

Ethnicity, caste,

gender

Fragility affected market

Our interactions and actions with market

players either build or undermine markets

Building or undermining?

RULES

SUPPORTING FUNCTIONS

CORE MARKETSupply Demand

Regulations

Trust & risk perception

Inputs & Services Finance

Transport Information

Rule of law

INGOs/Donors/UN

Ethnicity, caste,

gender

Cash Transfers

If we are providing cash, who will affected people buy inputs and

services from?

If we are doing and paying for these

things, who will be there to do and pay for

them in future?

If we are not strengthening

legitimate institutions, how to we expect

them to function in future?

Building or undermining?

Systemic intervention

Recovery of livelihoods

System recovery & resilience Restored access to inputs & marketsImproved networks & relationships

Focus on market system

recovery

Reduced vulnerability

Systemic intervention

Poverty reduction(Jobs & Income)

Improved growth and access

System change e.g. increased

access to inputs

Setting the IntentionDevelopment Recovery

Direct interventions

ignore the system

Focus of intervention

Systemic constraints

Specific market system

The poor and their context

Symptoms

Causes

Why?

Feasibility

CORE

• To fix a problem, one must first understand it• In an emergency, the diagnostic process is rapid, & less rigorous• But still essential & can involve market players too

Diagnostic Process

Samarth is not a relief agency! But:• Had an experienced, motivated and capable

team for market analysis & facilitation• Had well established linkages and networks

with private and public sector

Samarth Early Diagnosis & Engagement

What Samarth Did• Selected Vegetables, Dairy and Inputs to focus on

(obvious impact and role in recovery)• Identified key business membership organizations to

work with– Vegetables: FEVEN (veg traders)– Dairy: CDCAN (dairy cooperatives)– Inputs: PEAN (input wholesalers & retailers)

• Supported them with logistics and analytical capacity• Presented findings to international community • Brokered relationships

Outcomes • BMOs used research as an advocacy piece for

government & NGOs• Some uptake of recommended interventions

among NGOs• But the recovery and response options pursued

were direct, & mainly ignored & potentially undermined the private sector…

How could it have been done differently?

What is facilitation?

“the art of affecting change in the behaviour and performance of market players such that it is sustained and continues to

adapt and respond to external influences”

“an action that is external to a market system but seeks to bring about change within it, in order to achieve the public benefit objective of

systemic change”

“any activity that makes tasks for others easy”

“the temporary actions of a facilitator to bring about system-level changes and develop market systems for

the benefit of the poor”

E.g. Agricultural Inputs Objective: enable farmers to plant staple and cash crops in the monsoon

Instead of:• Buying seeds and inputs • Conducting household surveys• Distributing inputs directly to householdsTry:• Engaging with PEAN• Assisting them to understand the affect on input retailers (addressing capacity

issues)• Assisting them in gap analysis for things they don’t normally stock (e.g. seed

storage bags)• Building relationships with the CASH recovery community• Fronting capital for re-stocking retailers (soft loan)

This maintains legitimate relationships between farmers and input retailers.

E.g. Livestock FeedObjective: safeguard productive assets (cows and buffalo)

Instead of:• Buying livestock feed (urea molasses & concentrates)• Conducting household surveys • And distributing it to affected smallholdersTry:• Engaging with CDCAN• Assisting them to understand the affect on supply-chain for milk (addressing

capacity issues)• Developing a distribution mechanism via empty milk trucks through dairy

cooperatives to farmers (phasing out subsidy over time as milk supply returns)

• Building better management information systems to monitor (and manage milk supply in future)

This maintains legitimate market relationships, and offers the potential for improved feed supply in future

Finally…• Understand when you are facilitating, & when

you are not: ask who else could or should be doing this?

• Recognise the facilitation capacity you already have, and cultivate it

• Develop and invest in relationships and networks with market players

Thanks!

Reports are available on www.samarth-nepal.com