ASM Shahidul Haque

A development worker
Email: shahidulhaque72@gmail.com

This is part three of a series of blog “A General Outline of Evolution of NGO and Development Work in Bangladesh”. Read previous parts here.

Initial leaders of local NGOs were believed to be idealist who thought that there will be no need for NGO activities after two to three years of independence when government will be able to deliver all the basic services. Unfortunately that has never happened even after 46 years of independence. The presence of NGOs (development organizations), both local and international (in many forms), gradually increased in number. The number grew from only few around 1972, over 800 local and 200 international registered in 1990 to nearly 2200 local and 400 international (joint and supported) registered around 2004. There are reasons to believe that there will be many more unregistered mostly local NGOs and development organizations working in the country.

Now let us try to understand the underlining causes that helped this phenomenal expansion. The first cause is the demand for such services. In my last two blogs I have tried to explain a little on these issues. The government was not successful in delivery of basic services. There was too much demand for infrastructure development and urgent need for agriculture development and income generation. Foreign aid started to drip in to help improve the situation. OXFAM, NOVIB, Canadian CIDA, Scandinavian countries and Netherlands were the front runners. The mechanism of receiving foreign fund by local NGOs was easy and accountability for using such funds was not strong enough, thus many smart visionary people grabbed this opportunity very quickly. New NGOs were mushrooming and mostly somehow adopting principles and strategies developed under ‘Comilla Model’ at BARD in 1959 for rural development. This model promoted ‘cooperatives’ and ‘rural credit’ ideas for improving economic situation of rural poor.

The second cause is obviously ‘micro-credit’ by NGOs. BRAC adopted savings and credit program for their ‘target groups’ from 1974. It helped in accumulating fund for the organization. In 1976, Dr. Yunus tested his ‘micro-credit’ model with US$ 27 among beneficiaries. By 1983, government had a gazette on ‘Grameen Bank’ that provided legal framework and by 1990 ‘Grameen Bank Model’ was mature and ready to be replicated by others. NGOs grabbed this idea immediately and many of those used it as a tool for amassing huge wealth. Setting NGOs became a very lucrative option for making money.

The third cause is evading tax and generating money from commercial ventures. Smart NGOs in Bangladesh, could identify weakness in market structure in this country. To take this opportunity, as a strategy to create more money from selling products produced by their ‘target groups’ and to take advantages of laps in legal system, they started ‘business’ to make more money. BRAC started ‘Arong’ in 1978 to sell products commercially and showed the path for generating income that was quickly followed by many such development organizations.

Changes in the government in mid-70’s, early 80’s and 90’s also can be related to phenomenal expansion of NGOs in Bangladesh. Corruption and weakness in regulatory framework encouraged money making in the name of development work. Though there was a foreign donation regulation ordinance from 1978, the NGO- Affairs Bureau came into existence only in 1990. Many donors opted to fund NGOs/INGOs, mostly originated from country of origin, siting wide spread inefficiency in governments in 80’s -90’s. ODA fund flow had reached its peak globally in 1990s. In Bangladesh, different NGOs had believed to have received $ 150 million in 1990 and in 1995 it was at peak around $ 450 million. About 15% of foreign aid was given to NGOs, instead of government, in early 1990 by donors and it rose up to 27% by 2004. On the other hand, contribution of foreign aid in national GDP decreased from 6% to 4% at the same period of time.

So, in conclusion, it can be said that, that there are three major underlying causes of rapid growth of NGO and development work in Bangladesh, i) Easy flow of fund, ii) micro-credit, iii) corruption (weakness in monitoring).

(I wish to get reader’s feedback. I also hope to pick another specific topic in my next blog.)