Friday, October 17, 2008

From Neo-Colonialism to NGO-Colonialism?

Throughout Africa and the rest of the developing world thousands of Non-Governmental Organizations are engaged in assisting the impoverished, the downtrodden, and the unfortunate. While their specific objectives might vary, their broad goal is to simply “help.” Medicines San Frontiers provides medical care, Save the Children is focused on, well, saving children, and the International Rescue Committee is focused on refugee work. Hundreds more are building schools, assisting with agriculture, clean water, good governance, the environment, and the latest trend, gender issues.

Add to the list of these private organizations are a host of United Nations sponsored endeavors – the UN Development Program, the World Food Program, and the UN High Commissioner for Refugees. Governments are involved as well – US Agency for International Development (US AID) and the British Department for International Development (DFID.) The largest, and oldest player in the field is of course the World Bank and its various regional subsidiaries.

Over the past sixty-three years western governments alone have spent $1.2 trillion seeking economic growth in the developing world. Private NGO’s have contributed billions of dollars more.

So the question must be asked – has it done any good?

Certainly, at the individual human level refugees have been fed and housed, starvation averted, children vaccinated and rape victims counseled.

But at a macro level the answer is a resounding no. The net effect of the trillions of dollars and billions of man hours spent helping Africa and the rest of the developing world prosper has been negligible and possibly negative. The road to poverty appears to be paved with aid dollars.

No country in the developing world which has received any significant amount of aid has reformed its public policies, or launched itself into sustained economic growth. Taken as a group, it can be argued that a country’s economic development is inversely proportional to the amount of aid it receives.

How can this be? Legions of people have worked so hard to help, and yet it has been for naught?

The first reason is that foreign aid, whether in the form of World Bank financing or direct action through various NGOs on the ground, alleviates the host nation of responsibility for that function, whether it be a humanitarian crisis, vaccinating children, building schools, economic development or saving the endangered mountain gorilla or primeval forest. The presence of so many aid workers in a region thus removes the onus of good governance from the people in charge. It is no longer their problem – and thus they become less accountable to the people they are theoretically supposed to serve.

The second reason is that the presence of so many NGO’s and UN personnel coupled with their vast budgets creates distorting effects on the economy. The large influx of rich westerners with their fat expat salaries and hardship pay creates an artificial boom economy in the region leading to inflation throughout all sectors of the economy. Food prices rise, rents rise, consumer goods become more expensive. For the local small business owner recruiting and retaining qualified personnel becomes more expensive as the NGO’s pay scale doesn’t reflect the local reality.

While some would argue that the influx of cash is good for the economy – its in fact an artificial cash injection which creates a dependency of the host government on the NGO community – a form of NGO colonialism. The artificial economic boom thus relieves any pressure the host government would have had to reform regressive economic policies. Host governments no longer have to reform their stagnant state run economies or liberalize trade or create a competitive business environment; which are painful in the short run but key to long term economic growth. This in turn means governments don’t have to address other issues like endemic corruption or the mismanagement of public funds.

All of the economic reforms do come with a cost – a political cost. Reforming state owned companies means layoffs of redundant workers and the end of cronyism. Liberalizing trade means the end of corruption and protection of a few powerful businessmen. Indeed, good economic policy can be threatening to ones political career. If there are large amounts of artificial cash swimming around the country then the exigency to act disappears – and everyone is the worse off for it.

In the end, governments become dependent on the presence and actions of the NGO’s in order to maintain the status quo – the lack of political reform, poor public policy and poor economic choices. The NGO’s, for all their good intentions, become complicit in this; at best, shrouding the truth in a bright eyed and bushy-tailed naïveté, and at worse, proselytizing their moral superiority to the world.

But there is a much darker side to this as well. In order to operate and to perpetuate their activities NGO’s are dependent upon a continuing stream of donations. In countries in crisis or emerging from crisis, NGO’s have a financial incentive to exaggerate the need for aid – which in turn leads them to exaggerate the conditions in the areas in which they operate. The NGO community at large will overestimate deaths from starvation, numbers of refugees, or those killed by conflict. The best example is the work by the International Refugee Committee in its latest study of those killed by the conflict in the Democratic Republic of Congo’s volatile eastern region. On a recent survey, the IRC estimated 5.4 million people have been killed as a result of the conflict. This is a staggering figure – on par with the Holocaust. The IRC’s analysis is fundamentally flawed however in that they have concluded that virtually all deaths in the region are a result of the conflict – as opposed to simply living in impoverished conditions in sub-Saharan Africa. The IRC fails to demonstrate any credible correlation between these deaths and the conflict itself. Its as if one did an accounting of all deaths in the United States since 2001 and then claimed these were the direct result of the war on terror. Statistical integrity and small details are beside the point, however – the headline grabbing figure of 5.4 million deaths is much better for donations.

What the staffers at the IRC and other NGO’s don’t realize is that these distortions of the truth, while excellent fundraising mechanisms, are in fact detrimental to the cause they wish to serve. By making outlandish statements and barraging media outlets with horror stories, they are in fact hindering direct foreign investment into the region. Investment which would otherwise bring stability, economic growth, jobs and higher standards of living to those people.

All of this, is of course, lost on the legions of young, well meaning westerners running around the developing world trying to do their best to help humankind.

1 comment:

Alexander Pheng said...

This is an eloquent description of the same phenomenon that we are trying to call attention to, although we'd say the actual good done by NGOs is less than meets the eye. (They certainly do provide short-term benefits in healthcare. As for their building schools, we think that has hurt education.)

What, then, to do about it? Mann's article points to one small but simple step. This is colonialism, let's call it that, and encourage others to.

Alexander Pheng