There was an Ebola outbreak in Uganda last month. As usual, almost nobody took notice. What a luxury it is to be unperturbed by such an event! Having worked closely with the Ministry of Health in Uganda, the country’s ability to regularly contain an epic threat to public health is truly admirable. The teams on the ground have consistently prevented the deadly virus from boarding the next flight from Kampala to Brussels – or any other part of the world for that matter.

When it comes to public health emergencies, no one is safe until everyone is safe. From the painful experience of the Covid-19 pandemic, we know that national borders mean little to contagion spreading in distant regions. In other words, every person in the rich world directly benefits from Uganda’s robust pandemic response. If its funding by USAID (the United States Agency for International Development) is discontinued, as the new American administration intends, this protection, created by what American surgeon and writer Atul Gawande calls the “global immune system”, will soon fall apart.

Facts and figures

This is part of the new normal in the humanitarian sector, which concerns all of us – whether or not we actively support aid work as private citizens or big multinational corporations. At INSEAD’s Humanitarian Research Group, we work closely with NGOs and international stakeholders to improve operations, which consume up to 80 percent of their budgets. These budgets are directly impacted by the US’ withdrawal from international humanitarian cooperation, with huge ramifications resulting from these recent and still unfolding events. 

While the US administration has decided to shut down its international aid programme, USAID, claiming it to be “corrupt”, the informed public should be wary of emotions without weighing the evidence. For example, in spite of the misconception that the widespread use of “contractors” in humanitarian projects must be wasteful and corrupt, there is a structural reason for this division of labour. Beyond the borders of typically peaceful HQs, field operations in sometimes remote and even potentially dangerous locales are best taken on by local partner NGOs with in-depth and timely knowledge of conditions on the ground.

The shutdown of the epidemic monitoring and containment function is but one of the many changes unleashed by the throttling of US funding, which represents 42 percent of total institutional donations to the world’s humanitarian economy. This comes at a time when other large donors such as Germany, France and Sweden are also slashing their humanitarian budgets. As the need for humanitarian aid increases, there will be no way to fill the financial gap left by the US’ withdrawal. The USAID budget accounts for just 0.6 percent of annual US government spending, but its withdrawal can exert a disproportionate impact on countries outside America.

Expect far-reaching changes

In the face of domestic crises including unemployment, homelessness and substance abuse, the “charity begins at home” approach appears sensible. However, with a greater understanding of the financial flows in the humanitarian economy, we argue that while money that goes into international aid is an altruistic spend, it is much more than just charity. Humanitarian budgets are also long-term investments in the security, health and wealth of all nations, rich and poor.

Humanitarian professionals predict that, as a consequence of this brutal decision, agonising choices will become routine. For example, aid workers will have to triage starving populations to ration food or life-saving supplies. The humanitarian response will be reduced to averting the imminent death of a malnourished child, rather than nursing them back to health. After hundreds of years of progress, the conditions experienced in the Napoleonic wars, which inspired the manifesto by Henri Dunant, the founder of the Red Cross, will effectively return.

When donor funding is slashed, the pressure to cut costs will increase, with both positive and negative consequences. On the one hand, crises could drive innovation and adaptation. The sharing of resources and assets – which is long overdue – may take off, furthering the professionalisation of the humanitarian sector that has already been underway.  

However, should the cost pressure exceed a threshold, the collaboration required for efficient operations will fall victim to the competition for funds. Like any industry faced with limited liquidity, interrupted payments – even if only for the 90 days – can force smaller players to fold. 

The global immune system

The lesson from the Covid-19 pandemic is clear: When it comes to infectious diseases, no one is safe until everyone is safe. Just as we are beginning to forget the anxiety and dread felt during the pandemic, most of the world’s population has long forgotten the terror and devastation in the 1980s caused by AIDS – a modern plague that did not discriminate between the rich and poor. In the past 50 years, joint investments towards the treatment of HIV have all but eliminated the dreaded virus once deemed a death sentence. Now that USAID’s substantial investments in HIV treatment may be discontinued, we might expect a resurgence of the disease, with unpredictable consequences for our lives. 

Why “unpredictable”? Without proper monitoring, preparedness, response and treatment systems, an epidemic outbreak in Wuhan or Arua could soon spread uncontrollably and overwhelm local – and eventually, global – health systems. Seen from this perspective, each of us is a “beneficiary” of humanitarian aid. It is therefore in our interest that disease control centres work closely with aid recipients to quantify and distribute the resources necessary to fight and prevent the next pandemic.

It is the very characteristics of our modern world – tight connections and flows of people, resources and information – which have made nations rich, that also make public health a global concern. Health and wealth are enabled by the same global structures. For these reasons, humanitarian donations are not “just charity”, but an investment in securing global health. 

Development, stability and growth

The strong economic development of institutions is a prerequisite to achieve a peaceful and prosperous world. The practical consequences of poverty alleviation include the creation of new markets, stable trading partners and the reduction of environmental degradation. It’s hard to imagine that Germany and South Korea were once net recipients of US developmental aid. They show that soft power can pay dividends to donor countries in the long run, and that humanitarian actions have a strategic effect that unfolds over time. 

Yet, the world’s biggest humanitarian donor has decided that with its military and economic might, this soft power is unnecessary. With the absorption of USAID into the State Department, future donations will be aligned with political objectives instead of based on objective needs assessments. The needy will have to “qualify” for food, shelter and medical care by demonstrating the “desired” ideological, political – and possibly sexual – orientations. This not only violates the core humanitarian standard statutes meant to protect against corruption, but can result in an increase in the corrupt redirection of funds, both inside and outside the US. 

A united front

As current political developments cause ongoing humanitarian projects to come under pressure, be cancelled or scaled down, INSEAD’s Humanitarian Research Group will continue to transfer its knowledge to the sector, which must do more with even less in the coming years. 

As perhaps the oldest and most influential research group in the field of health and humanitarian operations, the group has been providing humanitarian stakeholders with field-informed and evidence-based scientific solutions. With our partners, we have been addressing challenges including disease surveillance and diagnostics, reducing drug shortages, predicting and preventing child labour and severe malnutrition, ways to improve operational efficiencies and the impact of donor funding structures, among others. 

Recent developments will no doubt affect the group’s operational budget, and ultimately jeopardise the positive impact that INSEAD’s world-class research has on the non-profit sector. Given INSEAD’s commitment to “business as a force for good”, it’s more vital than ever that tomorrow’s global business leaders exert a positive impact on the world they want to live in. 

We join the chorus of experts who assert that, similar to trade and military engagement, isolationism of humanitarian aid will not make any country “great”. In the long run, strengthening global systems will be more effective than defending a walled fortress.