$1 Trillion NGO Industry

By Farooq Sulehria

The NGO sector is growing globally. Statistics indicate a 400 percent increase in the number of international NGOs. From a couple of hundred in the 1960s, the number had reached 50,000 by 1993 worldwide. In 2001, the last year for which complete figures are mostly available, the size of the “non-firm, non-government” sector was estimated at 1.4 million organisations, with revenues of nearly $680 billion and an estimated 11.7 million employees. Over 15 percent of development aid is channelled through NGOs. A UN report says that the global non-profit sector with its more than $1 trillion turnover could rank as the world’s eighth largest economy.

The growing NGO influence is evident in many ways. On one hand, the overall global flow of funding through NGOs increased from $200 billion in 1970 to $2,600 billion in 1997. On the other hand, the buzzword ‘civil society’ has been appropriated by the NGOs.Understandably, there has been a twenty-fold increase in citations of NGOs in the Wall Street Journal and the Financial Times in the last few years.

Many international NGOs (or INGOs in NGO lingo) have organised themselves like multinationals. The Oxfam family had a turnover of $504 million in 1999 and worked in 117 countries, World Vision had $600 million and worked in 92 countries, Save had $368 million and worked in 121 countries. Seven of the largest NGOs had a combined income of $2.5 billion in 1999. NGOs are now invited to bid for aid projects in the UK. They compete both with government and private sectors.

It is hard to define an NGO, but according to the UN definition: “Any non-profit, voluntary citizens’ group which is organised on a local, national or international level. Task-oriented and driven by people with a common interest, NGOs perform a variety of services and humanitarian functions, bring citizens’ concern to governments, monitor policies and encourage political participation at the community level. They provide analysis and expertise, serve as early warning mechanisms and help monitor and implement international agreements. Some are organised around specific issues, such as human rights, the environment or health”.

One may cite various reasons for the phenomenal growth that the NGO sector has registered in the last two decades. According to researcher Tina Wallace, this process needs to be understood in terms of the way in which development aid conditionality has moved in the 1990s “from the strictly economic sphere into every aspect of social and political life”.

Another scholar, Jonathan Goodhand, thinks: “The end of Cold War removed the rationale for nurturing a complex web of political allegiance through military and development aid. This opened the space for aid donors to make funding decisions based primarily on development criteria such as needs, effectiveness and impact. NGOs gave them the flexibility to do so”. One may also cite the changed ideological milieu in the 1990s that contributed to the rise of the NGO sector. The disillusionment released by the disappearance of former Soviet Union undermined the internationalism and socialism. Millions of well-intentioned youth were no more interested in radical political mega-projects. However, they were ready to dedicate themselves to noble causes preached by NGOs: child labour, human rights, climate, women rights etc. No doubt, certain INGOs have campaigned for cancellation of third world debt, opposed the WTO and been pivotal in organising the World Social Forum. However, the character of an NGO is determined by its funding. The Doctors sans Frontiers, for instance, has built itself good reputation owing to the fact that it depends on private donations for roughly 90 percent of its funding.

Despite various trends in the NGO sector, as a phenomenon, therefore, it remains a reformist attempt that does not challenge the status quo. Even if it is an attempt at giving a human face to capitalism, the NGO sector has hardly served the purpose. To cite an extreme example: certain NGOs dealing with female issues in the USA lent support to the occupation of Afghanistan. It was not a coincidence that the former US Secretary of State Colin Powell grumbled back in 2001, that western NGOs are considered “a force multiplier for us, such an important part of our combat team”.

Most importantly, NGOs are not accountable to anybody accept their donors. As a result, there is widespread corruption. On one hand, the (I)NGO executives and board members live and behave like multinationals’ CEOs, while their western staff draws salaries (these huge salaries constitute a violation of the human rights in themselves). Their junior partners in the Southern hemisphere, on the other hand, do not merely emulate them but lavishly pocket the money. Multi-donor evaluation, for instance, in Darfur could not locate one third of 170 NGOs and $120 million of funding went unaccounted for. This is just tip of the iceberg. The iceberg itself is often carefully concealed by the NGO bureaucracy.

This op-ed appeared first in The News, Islamabad, on December 20, 2011 and is being reproduced here with permission of the author.


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