Responding to forced displacement in a fracturing world: How can we think differently?

Earlier this week, the United Nations High Commissioner for Refugees (UNHCR) announced that it had discontinued approximately 3,500 permanent, and hundreds of temporary, positions in an attempt to lower its staffing costs by nearly a third. This drastic decision was driven by major financing deficits resulting from recent reductions in the aid budgets of traditional donors, with further cuts forthcoming. Other humanitarian agencies are also finding themselves in the same boat.

These developments are even more concerning at a time when the world is witnessing a surge in forcibly displaced populations (FDPs), with numbers almost doubling over the last decade. Refugees, comprising around a third of the FDPs, have also doubled during the same period. 

These evolving dynamics underscore the urgency for a reimagined approach that prioritises efficiency and collaboration, long-term planning, and adaptation of innovative tools.

Understanding the scale of forced displacement

By the end of 2024, FDPs were recorded to be more than 123 million. FDPs include refugees, internally displaced people, asylum seekers, and people in need of international protection. Forced displacement has been on the rise over the years, driven by war, persecution, violence, and human rights abuses. 

In 2024, a majority of the displaced populations did not cross borders, similar to the trends observed in previous years (Figure 1). Around two-thirds of those who fled across national boundaries found sanctuary in neighbouring countries.

Figure 1. Worldwide trends in forced displacement 

Which countries bear the burden of displacement? 

Just over a quarter of refugees (this includes people in refugee-like situations who encounter similar risks as refugees but for whom refugee status has not been ascertained) and other people in need of international protection were hosted by high-income countries, with a disproportionate burden falling on low- and middle-income countries. By the end of 2024, 36 countries were hosting 57 protracted situations (defined as those where more than 25,000 refugees from the same country of origin have been in exile in a given low- or middle-income host country for at least five consecutive years). 

Nearly seven in ten refugees and other people in need of international protection under the UNHCR mandate originated from just five countries – Venezuela, the Syrian Arab Republic, Afghanistan, Ukraine and South Sudan (Palestinian refugees are documented separately under the United Nations Relief and Works Agency for Palestine Refugees). More than one-third were hosted in five countries – Islamic Republic of Iran, Turkiye, Colombia, Germany and Uganda. A marginal decline of 1% was observed in 2024,  primarily due to fewer cases of people in a refugee-like situation from Afghanistan and Ukraine reported and a decrease in the number of Syrian refugees (Figure 2).

Figure 2: Number of people displaced across borders

Refugees and host communities have limited coping strategies against shocks. For instance, in a UNHCR survey of refugees and host communities in South Sudan in 2023, only less than 10% of households affected by shocks (primary flooding) reported receiving support from the government and non-governmental organisations (NGOs), with the remaining either left without a coping strategy or forced to reduce consumption and borrow money. The support that low- and middle-income hosting countries receive is therefore critical to help provide humanitarian services to displaced populations.

Adapting to a changing humanitarian aid landscape

OECD's Development Assistance Committee (DAC), comprising 33 of the largest donors, has committed to the long-term (non-binding) objective of allocating 0.7% of their Gross National Income towards Overseas Development Aid (ODA). However, they have fallen far short of the target, hovering around 0.3% on average for more than two decades. The share of this ODA allocated towards humanitarian aid has been around 10-12% on average for the last decade.

Overall ODA declined for the first time in five years in 2024, and there have been indications from major donors that the downward spiral will continue into the foreseeable future. While there may be various underlying factors behind these cuts, they are most likely driven by macroeconomic and fiscal constraints and local political dynamics in traditional donor countries. 

But humanitarian aid had already peaked in 2022 and started declining thereafter (Figure 3). The humanitarian sector has generally depended on a few donors, with the largest six contributing almost 70% towards humanitarian assistance until last year. This over-reliance has now been put to the test as the United States drastically slashed its support from an average of 40% over the years to 15% this year (however, it remains the largest contributor). 

Figure 3: Trends in the volume of humanitarian funding 

This does not bode well for humanitarian actors. The immediate liquidity crunch has led to mass downsizing, halting of programmes and office closures across humanitarian agencies, and has been particularly challenging for local NGOs.

 The UNHCR staffing cuts announcement was followed by a press release from the UN Office for the Coordination of Humanitarian Affairs (OCHA) sharing a hyper-prioritised funding appeal of USD 29 billion to help 114 million vulnerable people (including refugees) facing extreme humanitarian need – by the half-year mark, only 13% of the original target of USD 44 billion (to support 180 million people) had been met. Their plea was for countries to contribute 1% of what had been used to fund war in the previous year towards humanitarian assistance.

Recommendations to navigate the new reality

It may be too early to predict how the reduced ODA will be allocated or reallocated: some donors may prioritise the urgent needs of the most vulnerable populations through humanitarian financing, while others may decide to shift away from the typical grant-based model and push for investment-oriented approaches. 

There is also pressure to focus more on policy, markets, and systems to play a catalytic role, which may negatively affect the amount going to humanitarian support. Nonetheless, given the scale of the United States’ humanitarian funding cuts, it is unlikely that the gap created will be bridged by other donors stepping up.

At the same time, these developments are being viewed as an opportunity to recalibrate and reform the humanitarian assistance architecture, which has become unsustainable and highly dependent over the years. Some recommendations are proposed below:

1. Prioritising trade-offs: 

Humanitarian actors have already been forced to prioritise. However, emphasis needs to be placed on developing protocols/procedures to ensure that prioritising the urgent needs of the most vulnerable populations is not simply an organisational activity but a sector-wide approach. Oftentimes, the hotspots crowd in excessive attention at the expense of second- and third-tier priorities, leading to inefficiencies. It would be useful for humanitarian actors to align on thematic (food, shelter, water and sanitation, health, education, etc.) and geographical focus that build on their respective comparative advantages. 

2. Enhancing internal structures and incentives

Humanitarian organisations will need to reform themselves, become more nimble at decision-making, and reduce bureaucratic processes that can create costly delays.

3. Shifting mindsets

Humanitarian interventions should have a sharper developmental and peace-building focus to strengthen durable and sustainable solutions (livelihoods, skill-building, access to local economies) for both the refugees and the host communities. 

4. Unlocking innovative financing

Humanitarian activists have long since been advocating for more sustainable and reliable sources of financing and shifting dependence away from government-driven models. For example, the International Federation of Red Cross and Red Crescent Societies (IFRC) designed the Disaster Response Emergency Fund (DREF) as an insurance mechanism that promptly triggers direct funding to local humanitarian actors when faced with catastrophes. 

However, this is an innovation for the sector rather than the norm, and there remains scope for more innovative financing approaches that are fit-for-purpose for humanitarian needs (such as blended financing, diaspora bonds, etc.). The sector will most likely go through a learning curve, and these expectations, along with concerns around mandate creep, will need to be managed. 

5. Strengthening collaboration

Humanitarian actors will need to collaborate amongst themselves to confront the new reality they face. Discussions around how best to reduce duplication within the sector (including possible mergers) are ongoing amidst challenges around mandates and governance. 

Beyond the sector, there is also scope for working with financial and private institutions, especially development financial institutions (DFIs). Recent developments include the International Finance Corporation (IFC)- UNHCR Joint Initiative to enable private sector solutions for refugees and host communities, and the International Rescue Committee’s Advisory Model that provides guidance to investors to improve the social impact of projects.

6. Developing political mileage

Aid remains highly susceptible to domestic political headwinds. Despite the progress made over the decades, the inability to articulate these successes well has led to aid becoming a controversial topic within donor countries. Efforts need to be made to streamline and build political consensus among key stakeholders. 

7. Generating evidence

There is an urgency to generate a better understanding of the key drivers of displacement and rigorously evaluate aid interventions. Leveraging recent technological and digital development (satellite/remote sensing data, artificial intelligence, and machine learning) can support improved supply chains and delivery, and quick and cost-effective impact measurement. However, data privacy and protection of vulnerable populations should be paramount even amidst these efforts.

A call to action for the humanitarian sector

The humanitarian sector is at a crossroads, but there is a unique window of opportunity for key stakeholders to reflect, recalibrate and fundamentally reform and develop a financing architecture that is inclusive, sustainable and resilient in these changing times and into the future.

The authors would like to thank Tewodros Makonnen Gebrewolde for his insightful review.