Why NGOs need reforms?
Thursday, 8 November 2007
Shahiduzzaman Khan
The chairman of the Regulatory Reforms Commission, Akbar Ali Khan, said this week that non-governmental organisations (NGOs) must go through massive reforms to benefit the poor. A former adviser to the caretaker government, Akbar was critical of the NGOs for moving away from its original mission of empowering poor people into money-making.
According to a report published in the FE this week, Akbar said micro-credit is not the only remedy for poverty alleviation. An overall economic development is a must to eliminate poverty from the country. Indeed, the NGOs had started their activities to change the fate of poor people but now they are leaning all the more toward business activity, he noted.
In fact, country's NGOs have been blamed to go through weak monitoring mechanism, non-enforcement of existing regulations and an apparent state of impunity. All these are contributing to enable some NGOs to indulge in irregular practices and misuse foreign donations meant for social development. In addition, external influence, mainly from former bureaucrats and former NGO Affairs Bureau officials, many of whom are employed by a section of voluntary organisations 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 (TI), 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 misuses 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. Due to shortage of manpower, the NGO Affairs Bureau is unable to take actions against these NGOs.
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. As such, the NGOs changed their strategy and started experimenting with integrated community development programmes, 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.
Even though the NGOs continue to be viewed with suspicion, partly due to their own actions, they have at times been able to counter outside 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 examples 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 the NGOs had not focused their attention to working with women and children.
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. As such, larger institutions have been built establishing commercial ventures to tap the markets and use the derived profits for their social programmes. 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.
Micro-credit activities of Bangladeshi NGOs have been recognised as a model for other countries but there are criticisms too. 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 loans from different organisations at a time and become unable to return the amount. They are being pressurised by the NGOs.
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 the donors to select suitable NGOs. In most cases the papers supplied by the NGOs fail to provide enough information on activities. Information inconsistencies, duplication, misinformation etc., make the task difficult for donors. In fact, the donors do not have that much manpower to handle a large number of applications. As a short cut way to avoid problems the donors provide funds to big NGOs. These NGOs take the responsibility to channel funds to small ones.
It is true that existence of NGOs could not bring down the number of poverty driven people in the country to a minimum level. Yet the role of these organisations can never be ignored. The NGOs have done enough in some specific fields such as employment generation, people's awareness on human rights, health and family planning and nutrition issues, education etc. The NGOs have significantly enhanced the capacity and participation of women in income generation activities.
The chairman of the Regulatory Reforms Commission, Akbar Ali Khan, said this week that non-governmental organisations (NGOs) must go through massive reforms to benefit the poor. A former adviser to the caretaker government, Akbar was critical of the NGOs for moving away from its original mission of empowering poor people into money-making.
According to a report published in the FE this week, Akbar said micro-credit is not the only remedy for poverty alleviation. An overall economic development is a must to eliminate poverty from the country. Indeed, the NGOs had started their activities to change the fate of poor people but now they are leaning all the more toward business activity, he noted.
In fact, country's NGOs have been blamed to go through weak monitoring mechanism, non-enforcement of existing regulations and an apparent state of impunity. All these are contributing to enable some NGOs to indulge in irregular practices and misuse foreign donations meant for social development. In addition, external influence, mainly from former bureaucrats and former NGO Affairs Bureau officials, many of whom are employed by a section of voluntary organisations 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 (TI), 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 misuses 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. Due to shortage of manpower, the NGO Affairs Bureau is unable to take actions against these NGOs.
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. As such, the NGOs changed their strategy and started experimenting with integrated community development programmes, 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.
Even though the NGOs continue to be viewed with suspicion, partly due to their own actions, they have at times been able to counter outside 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 examples 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 the NGOs had not focused their attention to working with women and children.
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. As such, larger institutions have been built establishing commercial ventures to tap the markets and use the derived profits for their social programmes. 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.
Micro-credit activities of Bangladeshi NGOs have been recognised as a model for other countries but there are criticisms too. 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 loans from different organisations at a time and become unable to return the amount. They are being pressurised by the NGOs.
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 the donors to select suitable NGOs. In most cases the papers supplied by the NGOs fail to provide enough information on activities. Information inconsistencies, duplication, misinformation etc., make the task difficult for donors. In fact, the donors do not have that much manpower to handle a large number of applications. As a short cut way to avoid problems the donors provide funds to big NGOs. These NGOs take the responsibility to channel funds to small ones.
It is true that existence of NGOs could not bring down the number of poverty driven people in the country to a minimum level. Yet the role of these organisations can never be ignored. The NGOs have done enough in some specific fields such as employment generation, people's awareness on human rights, health and family planning and nutrition issues, education etc. The NGOs have significantly enhanced the capacity and participation of women in income generation activities.