Factors that frustrate effective rise of NGOs in Bangladesh
Sunday, 21 September 2008
Shahiduzzaman Khan
A foreign specialist on NGO affairs gave a broad hint in the recent past that large non-government organisations (NGOs) in Bangladesh are running parallel to the government and are sometimes dictating terms. The sizes of some NGOs are so big that they need no help either from the government side or from other NGOs operating in the country. This is not a healthy sign, he observed.
Yet what the Regulatory Reforms Commission (RRC) felt about the NGOs in Bangladesh was that they must go through massive reforms to meet their desired objectives to help the poor people of the society. RRC Chairman Akbar Ali Khan lamented that a section of NGOs have moved away from their original mission of empowering the poor people with social benefit. They have engaged themselves in activities like money-making, he said.
There is no denying that the micro-credit was not the only remedy for poverty alleviation. An overall economic development is by far the best way to eliminate poverty from the country. Indeed the NGOs had started their activities to change the fate of poor people, but now their activities are timidly focused to multi-faceted business functionaries.
In fact, country's NGOs have been suffering from weak monitoring mechanism, non-enforcement of existing regulations and an apparent state of impunity, that are contributing to enable some of these voluntary organisations to indulge in corrupt practices and misuse foreign donations meant for social development. In addition, external influence, mainly from former bureaucrats and ex-NGO Affairs Bureau officials, many of whom are employed by a section of NGOs and paid high salaries, and subsequent inaction against alleged offences have created an atmosphere of impunity in the NGO sector.
There have been widespread allegations of mishandling of foreign funds by many NGOs. The allegations gained ground after the publication of a report by the Bangladesh chapter of the Berlin-based corruption watchdog, Transparency International, which has unearthed corruption in about 20 NGOs. The TIB, however, did not make public the list of the NGOs that were surveyed on a random basis. One official of the bureau said they receive numerous allegations of irregularities and misuse of funds, but they cannot investigate those allegations because of pressure both from the top brass within the bureau and influential persons outside.
Shortage of manpower, lack of accountability of the field administration to the bureau, and an unholy nexus between a section of officials and the NGO executives are being cited as the major reasons for misappropriation of funds. One NGO Affairs Bureau director cited shortage of manpower as the cause. He said the bureau, with a handful of officials, has to oversee the activities of more than 3,000 voluntary organisations that are implementing various projects across the country.
The NGO response to the man-made and natural disasters that afflicted Bangladesh in the first half of the seventies was initially limited to relief and rehabilitation. From the mid-seventies, there was a realisation that such an approach was at best a stop-gap solution, and not a very effective one at that. Hence, NGOs changed their strategy and started experimenting with integrated community development programs, borrowing significantly from the Comilla model. It was thought that the overall development of the community would lead to the development of poorer groups, but what had not been accounted for were structural constraints within rural societies that restricted benefits reaching the poor.
The poor's disadvantage of income differentials and inability to accumulate wealth, coupled with the forced grouping, created dependency on richer groups who exploited the inherent power relations for their own gains. NGOs recognised that there needed to be specific focus on transforming the capacity of the poor if they were to challenge these structural inequalities and started targeting their development efforts only to the poorest groups.
Even though NGOs continue to be viewed with suspicion, partly due to their own actions, they have at times been able to counter these pressures quite effectively. The government has also valued their collaboration in a number of areas such as family planning and health, education, and more recently micro-credit. The present day tension can also be attributed to an ever-growing discord between the fundamentalist lobby and the predominantly secular NGO community. The secular nature of the NGO sector is particularly significant considering Bangladesh's portrayal of itself as a moderate Muslim multi-party democracy in a post 9/11 world order. There are instances of the government's representatives highlighting the success of micro-credit or the gender parity in primary enrollment -- achievements that may not have been possible if NGOs had not focused their attention to working with women and children.
Successful social models, unlike their business counterparts, do not often spread rapidly once developed. NGOs were recognised for their localised innovations and good practices, but going to scale was not their forte. By the 1990s, however, this did not hold true anymore for a group of organisations in Bangladesh that were impressive by any standard, based on the sheer number of people they directly reached. For example, it is estimated that micro-credit reaches around 60 per cent of poor households, with 15 million active borrowers being serviced by MFIs. The sector is dominated by three NGOs and one specialised bank that account for over 85 per cent of active borrowers and over 90 per cent of the total outstanding loan portfolio. In the field of education, NGO primary schools with around 2.1 million students account for approximately 10 per cent of currently enrolled students.
The successful expansion of micro-finance, in particular, fuelled both the increase in expenditure as well as the decrease in donor dependency of developmental organisations. Access to finances that were not controlled by donors or other agencies allowed the NGOs greater freedom. Hence, one witnessed the larger institutions establishing commercial ventures to tap the markets and use the derived profits for their social programs. This strategy was of course not without its detractors. Businesses complained of the lack of a level playing field and accused NGOs of using their non-profit status to avoid taxation. There are some factors that deny the effective rise of NGOs in Bangladesh. Poor governance is one of those factors. An ideal organisation should have an executive committee consists of people from different sectors who are able to contribute for the organisation at policy level.
Micro-credit activities of Bangladeshi NGOs have been recognised as model for other countries but there are criticisms. Some NGOs become dependent on micro-finance activities for sustainability. These NGOs initiate activities on a large scale not justifying their capacity in context of manpower, logistics etc. to handle. High interest rate is also a cause for criticism. There are competitions among micro-credit support providers and it is difficult for the small NGOs to achieve success in the field. Sometimes, beneficiaries take loan from different organisations at a time and become unable to return the amount. They are being pressurised by the NGOs.
Different departments of the government such as LGED, DSS, DNFE, WAD, YDD etc. include NGOs for implementation of projects. This is a good initiative indeed for sustainability of local NGOs. But it is alleged that fair judgment in selection of NGOs not ensured and NGOs receive fund in exchange of money or because of their political linkage. Good NGOs don't receive fund. At present some of the NGOs under different ministries have been listed because of financial misappropriation, poor quality of work or political linkage with the past government.
It seems that donors have become very much cautious about giving funds to new NGOs. Because of the demand from a large number of NGOs it has been very difficult for donors to select suitable NGOs. In most cases the papers supplied by the NGOs don't provide enough information on activities. Information inconsistencies, duplication, misinformation etc. make the task difficult for donors. In fact, the donors don't have that much manpower to handle a large number of applications. Donors are puzzled with applications. As a short cut way to avoid problems the donors provide funds to big NGOs. In this case, the big NGOs take the responsibility to channel funds to others.
It is true that existence of NGOs didn't bring down the number of poverty driven people in the country to a minimum level, yet the role of NGOs in Bangladesh can never be under-estimated. The NGOs had done enough in some specific fields such as employment generation; people's awareness on human rights, health & family planning and nutrition issues, education etc. NGOs have significantly enhanced the capacity and participation of women in income generation activities.
..................................................................
szkhan@thefinancialexpress-bd.com
A foreign specialist on NGO affairs gave a broad hint in the recent past that large non-government organisations (NGOs) in Bangladesh are running parallel to the government and are sometimes dictating terms. The sizes of some NGOs are so big that they need no help either from the government side or from other NGOs operating in the country. This is not a healthy sign, he observed.
Yet what the Regulatory Reforms Commission (RRC) felt about the NGOs in Bangladesh was that they must go through massive reforms to meet their desired objectives to help the poor people of the society. RRC Chairman Akbar Ali Khan lamented that a section of NGOs have moved away from their original mission of empowering the poor people with social benefit. They have engaged themselves in activities like money-making, he said.
There is no denying that the micro-credit was not the only remedy for poverty alleviation. An overall economic development is by far the best way to eliminate poverty from the country. Indeed the NGOs had started their activities to change the fate of poor people, but now their activities are timidly focused to multi-faceted business functionaries.
In fact, country's NGOs have been suffering from weak monitoring mechanism, non-enforcement of existing regulations and an apparent state of impunity, that are contributing to enable some of these voluntary organisations to indulge in corrupt practices and misuse foreign donations meant for social development. In addition, external influence, mainly from former bureaucrats and ex-NGO Affairs Bureau officials, many of whom are employed by a section of NGOs and paid high salaries, and subsequent inaction against alleged offences have created an atmosphere of impunity in the NGO sector.
There have been widespread allegations of mishandling of foreign funds by many NGOs. The allegations gained ground after the publication of a report by the Bangladesh chapter of the Berlin-based corruption watchdog, Transparency International, which has unearthed corruption in about 20 NGOs. The TIB, however, did not make public the list of the NGOs that were surveyed on a random basis. One official of the bureau said they receive numerous allegations of irregularities and misuse of funds, but they cannot investigate those allegations because of pressure both from the top brass within the bureau and influential persons outside.
Shortage of manpower, lack of accountability of the field administration to the bureau, and an unholy nexus between a section of officials and the NGO executives are being cited as the major reasons for misappropriation of funds. One NGO Affairs Bureau director cited shortage of manpower as the cause. He said the bureau, with a handful of officials, has to oversee the activities of more than 3,000 voluntary organisations that are implementing various projects across the country.
The NGO response to the man-made and natural disasters that afflicted Bangladesh in the first half of the seventies was initially limited to relief and rehabilitation. From the mid-seventies, there was a realisation that such an approach was at best a stop-gap solution, and not a very effective one at that. Hence, NGOs changed their strategy and started experimenting with integrated community development programs, borrowing significantly from the Comilla model. It was thought that the overall development of the community would lead to the development of poorer groups, but what had not been accounted for were structural constraints within rural societies that restricted benefits reaching the poor.
The poor's disadvantage of income differentials and inability to accumulate wealth, coupled with the forced grouping, created dependency on richer groups who exploited the inherent power relations for their own gains. NGOs recognised that there needed to be specific focus on transforming the capacity of the poor if they were to challenge these structural inequalities and started targeting their development efforts only to the poorest groups.
Even though NGOs continue to be viewed with suspicion, partly due to their own actions, they have at times been able to counter these pressures quite effectively. The government has also valued their collaboration in a number of areas such as family planning and health, education, and more recently micro-credit. The present day tension can also be attributed to an ever-growing discord between the fundamentalist lobby and the predominantly secular NGO community. The secular nature of the NGO sector is particularly significant considering Bangladesh's portrayal of itself as a moderate Muslim multi-party democracy in a post 9/11 world order. There are instances of the government's representatives highlighting the success of micro-credit or the gender parity in primary enrollment -- achievements that may not have been possible if NGOs had not focused their attention to working with women and children.
Successful social models, unlike their business counterparts, do not often spread rapidly once developed. NGOs were recognised for their localised innovations and good practices, but going to scale was not their forte. By the 1990s, however, this did not hold true anymore for a group of organisations in Bangladesh that were impressive by any standard, based on the sheer number of people they directly reached. For example, it is estimated that micro-credit reaches around 60 per cent of poor households, with 15 million active borrowers being serviced by MFIs. The sector is dominated by three NGOs and one specialised bank that account for over 85 per cent of active borrowers and over 90 per cent of the total outstanding loan portfolio. In the field of education, NGO primary schools with around 2.1 million students account for approximately 10 per cent of currently enrolled students.
The successful expansion of micro-finance, in particular, fuelled both the increase in expenditure as well as the decrease in donor dependency of developmental organisations. Access to finances that were not controlled by donors or other agencies allowed the NGOs greater freedom. Hence, one witnessed the larger institutions establishing commercial ventures to tap the markets and use the derived profits for their social programs. This strategy was of course not without its detractors. Businesses complained of the lack of a level playing field and accused NGOs of using their non-profit status to avoid taxation. There are some factors that deny the effective rise of NGOs in Bangladesh. Poor governance is one of those factors. An ideal organisation should have an executive committee consists of people from different sectors who are able to contribute for the organisation at policy level.
Micro-credit activities of Bangladeshi NGOs have been recognised as model for other countries but there are criticisms. Some NGOs become dependent on micro-finance activities for sustainability. These NGOs initiate activities on a large scale not justifying their capacity in context of manpower, logistics etc. to handle. High interest rate is also a cause for criticism. There are competitions among micro-credit support providers and it is difficult for the small NGOs to achieve success in the field. Sometimes, beneficiaries take loan from different organisations at a time and become unable to return the amount. They are being pressurised by the NGOs.
Different departments of the government such as LGED, DSS, DNFE, WAD, YDD etc. include NGOs for implementation of projects. This is a good initiative indeed for sustainability of local NGOs. But it is alleged that fair judgment in selection of NGOs not ensured and NGOs receive fund in exchange of money or because of their political linkage. Good NGOs don't receive fund. At present some of the NGOs under different ministries have been listed because of financial misappropriation, poor quality of work or political linkage with the past government.
It seems that donors have become very much cautious about giving funds to new NGOs. Because of the demand from a large number of NGOs it has been very difficult for donors to select suitable NGOs. In most cases the papers supplied by the NGOs don't provide enough information on activities. Information inconsistencies, duplication, misinformation etc. make the task difficult for donors. In fact, the donors don't have that much manpower to handle a large number of applications. Donors are puzzled with applications. As a short cut way to avoid problems the donors provide funds to big NGOs. In this case, the big NGOs take the responsibility to channel funds to others.
It is true that existence of NGOs didn't bring down the number of poverty driven people in the country to a minimum level, yet the role of NGOs in Bangladesh can never be under-estimated. The NGOs had done enough in some specific fields such as employment generation; people's awareness on human rights, health & family planning and nutrition issues, education etc. NGOs have significantly enhanced the capacity and participation of women in income generation activities.
..................................................................
szkhan@thefinancialexpress-bd.com