A Project of the American Enterprise Institute and the Federalist Society

Dubai Courts The International Aid Industry


The plushest of new homes for the international aid industry

THERE were mixed feelings at a humanitarian trade fair held recently in Dubai. On the one hand, sellers of everything from blankets to body armour were delighted to be in on a booming business. On the other, business depended on other people's misfortunes. So, although company directors insisted that their products alleviated suffering in hellish spots (which they mostly do), they were also banking on a rapid growth in misery and disaster, particularly in Africa.

The trade fair was the largest of its kind ever. Not only that, but it was held in Dubai rather than Geneva, long closer to home for the international army of NGOs. The emirate hopes to offset its materialist image by making itself a global hub for the aid industry. Boosters, hoping to lure NGOs with the city's tax-free status, low-cost housing for aid-workers and hotels where they and foreign correspondents can hunker down on their way to emergencies, promise that a "humanitarian city" will be available in Dubai by 2008. Geography is certainly on their side: Dubai is close to disaster-prone bits of Africa and Asia.

That a city mainly associated with luxury tourism is pitching for NGO custom, and NGOs are listening, also shows how quickly the aid business is changing. Traditional headquarters for aid agencies, such as Oxford and Bordeaux, now seem a long way, perhaps too far, from their client base. NGOs are also moving closer to Dubai's business-oriented thinking. People at the fair traced the more hard-nosed approach back to a decade ago, when NGOs started hiring procurement officers with industry experience. Logisticians, who work out how to store and move aid, became more professional.

The change has important consequences. Shoestring aid operations, those with plenty of heart but not much common sense, are no longer welcome in disaster areas. Similarly, middlemen are in decline. A famine or an earthquake used to be a boon for traders. Now, NGOs buy directly from specialised manufacturers. Chancel International, an Egyptian-based supplier to the Red Cross and others, can ship tens of thousands of cooking kits, for instance, within hours of an order. Over the course of an extended emergency, in Darfur, for instance, it might supply several million items.

The question is whether a more business-like approach may also affect the way NGOs choose their projects. An increasing number of heretics would like to see a venture-capital examination of projects. That is not a solution in itself, they admit, but it is more likely to get a better deal for increasingly limited funds, particularly in Africa. They also want to see more MBAs hired by NGOs. A new base in Dubai, with lower costs, may help their cause.

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