One of the biggest concerns citizens and governments providing aid to developing nations, natural disaster hit zones and crisis situations have is the legitimate use of the donated funds. Corruption is a huge problem in international aid with some estimates arguing that less than 25% of every dollar donated actually gets used for its intended purpose.
Blockchain Could Deter Corruption
With blockchain, it becomes almost impossible to cheat the system. For a short explanatory video on how blockchain works go here. Essentially it is a lager system that is agreed upon by all in the blockchain network, any attempt to vary that system and the rest of the network rejects it. This means a transparent system, easily audited and all nodes no where the “money” or whatever value is assigned, goes. No closed bookkeeping in the blockchain.
So if an aid relief organisation such as UNOCHA or Medicins Sans Frontiers or Oxfam, or a government, donates funds (or even equipment or food) it can be tracked to the end use. With smartphones and scanners at the end point of where aid is delivered, corruption can be significantly mitigated.
The Economics & Politics of Blockchain Implementation
Implementing a blockchain system on this scale is not cheap, but conceding the cost of misplaced funds, food and equipment, it would likely be a lower overall cost. Initial costs would be set up of the system, ongoing management would be cost-effective. Aid value delivered could be increased to over 90%.
Political will is another story. Implementing it into developing nations and across their government and aid organisation infrastructure requires consent of the government receiving the aid. That’s a sticky wicket. In countries where democracy is non-existent or fragile at best, leaders can eject aid organisations at any time and sometimes do. How receptive would they be to a blockchain solution that avoids corruption and croneyism? It’s not an easy solution.
It will take time and if a fast, highly mobile and flexible/agile blockchain system can be developed, it could be deployed quickly in some situations. Some governments will welcome such a solution, others will prefer not to. But those governments that deny blockchain solutions for aid delivery will also look very suspect; not that they care.
Blockchain Takes Courage
A number of banks are researching the use of blockchain as are some financial services companies and corporations. But implementing blockchain solutions can be a challenge for many organisations. It is still seen largely as a novel and new technology by mainstream organisations. It takes courage to implement a blockchain solution.
Aid organisations aren’t known to be on the early adopter side of new technologies and blockchain is still in the early stages of the adoption curve.
What do you think? Is there a possibility for blockchain to help global aid delivery?