It is expected that 132 million people across the world will need humanitarian assistance this year.

While natural disasters continue to be the key driver, conflict remains the main cause of humanitarian needs.

The number is quite startling - according to the United Nations, one in every 70 people worldwide is caught up in a crisis; this as conflicts tend to get drawn out, leaving more people vulnerable to hunger, sickness and abuse.

Understanding the economics behind a an armed conflict, disaster or terrorism can help improve the humanitarian response on the ground

Already, it is expected that 2019’s humanitarian funding need is expected to hit USD21.9 billion. But as more money is needed to help the world’s most vulnerable, what is the most efficient way of raising, and distributing the fund, as the humanitarian system is still largely reliant on a traditional, donor-driven funding model?

Dr. Gilles Carbonnier, professor of Development Economics at The Graduate Institute Geneva, thinks there is a better way to do it.

In a field of study called Humanitarian Economics, he argues by understanding the economics behind a an armed conflict, disaster or terrorism can help improve the humanitarian response on the ground.

"Humanitarian economics looks at how these new financial instruments held by banks, insurance (companies), and the capital markets can contribute to improving prevention, and invest in prevention (mechanisms) in order to reduce the impact of disasters", said the economist during a chat with AWANI Review recently.

Carbonnier is also the vice-president of International Committee of the Red Cross (ICRC).

"The discipline derived from development economics and household economics to better understand the root cause of the crisis and to better response crisis which will be critical to sustainable development goals.”

He said among best example of the application of Humanitarian Economics can be seen at the war-torn city of Aleppo in Syria, where ICRC has provided funding to set up bakeries that serve not only as a much-need source of food, the bakeries also help support the local economy, in a small but meaningful way.

"The project had created demand for flour and other ingredients from other cities and regions too, attracting farmers to come back to their farms and restarting agriculture sectors in the region," he says.

"They also moved from in-kind assistance to cash assistance, a move which have restored economic activities in Allepo and (regions) beyond, which helped to revive the local economy.”

Watch the full interview with Dr. Carbonnier below: