Thought provoking news on various levels – although given the extent of the crisis with economic migrants and refugees in Europe and the many political angles involved, the concern must be that SIBs here are being seen as a desperate panacea as opposed to a total solution and the SIB industry needs to be careful how it progresses. There is huge potential but marked with enormous pitfalls.
Countries Look to Investors, Taxes as Potential Ways to Address Refugee Crisis (subscription)
Gabriele Steinhauser – Wall Street Journal
The global refugee crisis is stretching the budgets of governments and international organizations, prompting a search for novel ways to raise money from private investors or special levies on goods such as fuel, plane tickets or even concerts.
With 125 million people across the globe now depending on humanitarian aid due to war or natural disasters—a 12-fold increase since the start of the century—there is a $15 billion funding gap, according to a United Nations report released over the weekend. Filling this gap and ensuring humane living conditions in the most-affected regions will be crucial for reducing the flow of refugees and migrants into European Union members and other rich countries.
Some local governments, including in the U.K. and Belgium, and international institutions are already experimenting with social impact bonds, in which private investors support a social project, such as back-to-work programs, in return for a share of the public savings if the project is successful.
Belgium is currently working with the International Red Cross to develop a social impact bond to fund physical rehabilitation programs for disabled people that will be launched here Thursday.
Brussels Times
The private sector has to be more involved in the financing of humanitarian aid projects, pleaded on Thursday the Belgian minister, Alexander De Croo while standing alongside the International Red Cross at the Economic Forum in Davos.
“The financial situation for public money is what it is at the moment, however there is still very sizable amount of capital in saving accounts. We have to activate this money while NGOs and other actors are determined to ensure more quality”, explained Mr De Croo.
On Thursday the Belgian Minister will launch “humanitarian impact obligations”, an initiative taken in collaboration with The International Red Cross President Peter Maurer. The model will take the format of “social impact bonds”.