Last Updated 2nd October 2023. The next update to the Index is expected in August 2023.
The Humanitarian Recession Index is a way to understand which humanitarian sectors are moving backwards in terms of funding. A ‘real recession’ is defined as two consecutive years of a growing funding gap for a sector.
We’ve chosen to create an index around this concept of a ‘humanitarian recession’ to give us a simple way to understand the direction of humanitarian funding. Economists have words that help distil large complex things into easy-to-understand concepts for the layperson, such as inflation, interest rates, and unemployment. One of those words is ‘recession’.
A recession is an incredibly useful word to understand if the economy is either going in the right direction (growing), or going in the wrong direction (shrinking). And if we know when we are in a recession, we’re able to take mitigating actions.
The aim of this index is to do a similar thing: create a framework and language around the direction of a sector, and therefore inform the actions of people who can make a difference to turn things around.
The Index helps us understand which sectors are failing to keep up with the scale of humanitarian needs, and therefore can help us advocate for sectors which are falling behind.
For more details on methodology see the Sources and Methodology section below. However, one of the key details is that we are not looking at the overall amount of funding a sector has received this year compared to last year. Funding and growth is not an outcome. Enough funding to meet humanitarian needs is the outcome.
That’s why the index tells us which sectors are sliding back relative to needs. It might be okay if a sector has received less money this year compared to last year, if the needs this year are smaller.
Therefore, a ‘real recession’ here is where a sector has had two years of a growing funding gap. A sector is ‘in danger’ of a recession if it has had one year of a growing funding gap (i.e. it only needs another year and then it’s in recession). And a sector has experienced ‘growth’ if it has closed the funding gap.
Which humanitarian sectors are in a real recession?
Only 2 out of 16 humanitarian sectors were in a ‘humanitarian recession’ in 2023. This is in stark contrast to the 10 out of 16 sectors that were in recession last year, and another 3 which were ‘in danger’ of a recession.
14 out of 16 humanitarian sectors experienced growth last year, in other words, they closed their funding gap in percentage terms.
Most sectors experienced growth due to the wider humanitarian uplift: funding to response plans in 2022 reached $29.7bn. This is a huge increase on 2021 when response plans only received $20.0bn. Therefore, for most sectors, funding increased faster than needs. This still means that there are huge funding gaps, but they did close in percentage terms on the whole in 2022.
9 of 16 humanitarian sectors still receive less than one third of funding needed: these are Early Recovery (13.5%), Camp Coordination and Management (17.1%), GBV (19.7%), Emergency Telecommunications (24.8%), Child Protection (26.2%), Education (29.7%), Protection (30.5%), Shelter and NFI (32.1%), and WASH (32.9%). Bear in mind as well that 7 out of these 9 sectors actually closed their funding gaps in 2022 and experienced growth.
Funding to the GBV sector continues to decline relative to needs: the GBV funding gap widened again in 2022. In 2020, the sector received 33% of what was needed. This then dropped to 29% in 2021, and again to 20% in 2022, putting the sector into a humanitarian recession. At the same time, funding to the sector has increased from $112m in 2020 to $190m in 2022. This is a simple story of what is needed increasing faster than increases in funding.
Three sectors closed their funding gap for the second year in a row: Coordination and Support Services, Logistics, and Nutrition all closed their funding gap again in 2022. This can be explained, at least in part, due to a lower increase in funding required to these sectors. If we compare how much sectors needed in 2022 compared to 2018, the average sector needed 126% more funding*. However, Logistics only needed 43% more funding in 2022, Coordination needed 76% more, and Nutrition needed 81% more.
This is still quite a bit more, but the challenge for these sectors to keep up with funding requirements is relatively easier when compared to, say, Education, which needed 237% more in 2022 compared to 2018.
2022 Index
Which humanitarian sectors are in a real recession?
Of the 16 humanitarian sectors we analysed, 10 are currently in recession. That means 10 out of 16 sectors have experienced two years of a growing funding gap.
Another 3 sectors are in danger of a recession – that is, they’ve had one year of a growing funding gap.
A quarter of all sectors have been in a recession for more than one year. Health stands out as a sector that has been in a real recession for three years – meaning a growing funding gap for four consecutive years. Child Protection, WASH and Education have been in recession for two years. All of these sectors received less than a third of what they asked for in 2021.
Another quarter of sectors received more than half of what they asked for. Obviously half is not as good as receiving all the funding required, but it’s better than most sectors. Interestingly two of these sectors are ‘enablers’ of humanitarian delivery: Coordination and support services and Logistics. The other two have different stories. Emergency Telecommunications often finds it easier to get closer to what is required as it is such a small sector (requirement of $14m in 2021). Nutrition on the other hand is the 2nd largest humanitarian sector just behind Food Security.
More recessions are due to growing funding gaps, which are due to ever-increasing humanitarian requirements. As we’ve dived into here, requirements are increasing at an average of 13% year-on-year. Back in 2016, total humanitarian requirements stood at $20bn. Fast-forward five years and this now stands at $38bn. Is it any wonder that sectors are experiencing growing funding gaps as supply just cannot keep up with demand.
2021 Index
We’ve published an updated 2021 Humanitarian Recession Index. The original index was published in a story last year. However, the index has been updated here to include up-to-date data.
Sources and Methodology
In 2021, we published a one-off story that created the framework for this index. We’ve decided to update this information on a yearly basis here.
Classification
A real humanitarian recession is defined by need. Only funding going to a response plan that is included in the Global Humanitarian Overview is included here, as these plans have defined needs, and we can compare this to the funding required.
‘Growth’ happens when growth in funding is greater than growth in funding required. In other words, closing the funding gap.
A real humanitarian recession happens when the growth in funding required is greater than growth in funding for two consecutive years. In other words, two years of a growing funding gap.
Data Source
Data for the index comes OCHA’s Financial Tracking Service (FTS) which is the most comprehensive source of humanitarian funding data: 2016, 2017, 2018, 2019, 2020, 2021, and 2022.
* Calculations exclude Agriculture as no funding requirement. The calculations also exclude Child Protection and GBV as they are also relatively ‘nascent’ sectors in terms of funding requirements in 2018.
