[ALOCHONA] Demystifying corruptions in NGOs

Demystifying corruptions in NGOs By Abdullah A Dewan , USA The moral, political, and financial corruption in NGOs is a global infectivity, differing only in degree from country to country. In numerous instances, politicians and NGOs instead of monitoring each others activities are often working for mutual financial solidarity. NGO mischief had reached such a height in Kenya that the government finally dissolved the NGO council in 2005. In Macedonia, tragically, individuals like doctors, dentists, lawyers and professors find that their NGO winnings often trump the compensation offered from their own specialized professions. Indeed, there's little incentive for Macedonians to expose NGO corruption, because they often profit from it. In Bangladesh, as in other developing countries, the behavior of politicians and many NGOs reveal a common trait--one that's contemptuous and troublesome. Addressing the June 26 convention of NGOs titled, 'Institutional Good Governance of NGOs', attended by over 400 NGO representatives, TIB Chairman Professor Muzaffer Ahmad and CTG Adviser Rasheda Chowdhury presented a scornful report about the NGOs in Bangladesh. They reminded them of their lack of transparency, accountability and practice of good governance. The concerns are that many NGOs have been operating more like family businesses (as in Macedonia)--some of which even procure funds for the same project from multiple foreign donors. Prof. Muzaffer reminded them that their high interest micro-credit loans are deteriorating poverty among the poor instead of alleviating it and in many cases, transformed many previous poor progressively even more vulnerable to poverty. Instead of making them financially self-reliant micro-credit made the poor perpetual borrowers while NGO owners are bulking their personal bank accounts with unaccountable money. While challenging these NGOs, the TIB chairman elucidated the numerous failings or willful dereliction of their obligations. He reminded the NGOs that they did little or nothing: • Against eviction of indigenous people from their ancestral lands; • To deter encroachment on rivers and 'khash' lands; • To reverse pollution of rivers, and lakes and other water ways through industrial waste; • To modernize the field of agriculture for betterment of the farmers; • To reverse poverty deterioration brought about by high interest loans to the impoverished. These failings defy the relevance and the very existence of many NGOs in Bangladesh. Naturally one would wonder why the government has allowed the mushroom growth NGOs and let them operate as they wish--unregulated and devoid of transparency and accountability. The answer became obvious when the TIB Chairman implicated that many NGOs have been serving the partisan political interest of the party in power. Here comes the common trait of both politicians and NGO owners as noted earlier. Politicians exploit and deceive the same people, whose interest they were elected to serve. NGOs also deceive the same people for whom they exist and draw funds from foreign donors. While NGOs have emerged to recompense for potential shortfalls of both government and businesses, it is, nonetheless, illusory to ascribe them as perfect institutions. If corruption can be rampant in the market and the public sector, why NGOs should be considered immune to that menace? Any conjecture that people working for NGOs are more ethical and "better" than people engaged in other activities and that they're not driven by vices such as "greed" or "profit motivation" found in business and politics is flawed. Their goals may differ, but their approach to problem solving is inhibited by the same rules of the game as in society at large. In his 1990 book, "Institutions, Institutional Change and, Economic Performance", Nobel Laureate economist Douglass North refers to these rules as institutions and divides them into formal and informal institutions. Professor North argues that formal institutions are coercive and imposed by the state as opposed to informal institutions, which are voluntary codes of conduct within a given society. Corruption arises as a result of deficiencies and/or a lack of efficient enforcement in formal institutions. In the words of the 18th-century philosopher Adam Ferguson, "…where power is already established, where the strong are unwilling to suffer restraint, or the weak unable to find a protection, the defects of law are marks of the most perfect corruption" (An Essay on the History of Civil Society, 1767). The recent indictment of the Proshika chairman Kazi Faruque Ahmed, his son Rubayet Ahmed for misappropriation of huge funds is an example of the failure of "informal institutions" brought about by lack of enforcement of formal institutions. Another NGO that should draw ACC's attention for investigations is Tangail based UBINIG and Prabartana. UBINIG, established in 1984, is run by husband and wife --Farhad Mazhar and Farida Akhtar. UBINIG's 'Nayakrishi Andolon" is essentially a frozen in time primitive method of agriculture. Farad's - inefficient and primordial rural employment program, selective openness of Bangladesh economy in a globally integrated market, and exchange rate determination (in particular currency depreciation) is premised on flawed economic arguments and defies the logic of laissez faire based market economy. But what UBINIG is doing isn't the reason it should be investigated. UBINIG's managing director Farhad Mazhar's political connection, business practices, and possible tax evasion is questionable. • What was his connection with former Prime Minister Khaleda Zia? • What was the purpose of his accompanying Khaleda Zia to her China trip? • What kind of activities he was associated with Tareque Rahman as Tareque's de facto adviser? • More importantly, does he pay taxes from running business under the name Prabartana (since its formation in 1989)? • Who pays for Farhad's frequent foreign trips? Most NGOs are run as non-profit entities. But under the cover of an NGO, Prabartana sells shares, apparels, and agricultural produces which are produced on Farhad's agricultutal estate (like a state within a state) following the methods of Nayakrishi Andolon. There is also a ready to eat food cafeteria which operates like any other business. So it's a legitimate question to ask if Prabartana and any other NGOs engaged in production and sales, pay taxes from its profits like all other businesses. If not, then obviously these businesses enjoy an undue tax subsidy from the government-- an unfair and non-competitive business advantage compared to other businesses selling similar and substitute products. Don't forget, enjoying a tax subsidy may equivalently be interpreted as if Prabartana collects taxes from the people to run its business and boost profits. A 2003 United Nation study titled "The 21st Century NGO" found that many NGOs that receive tax payers' money through political channels are inclined to rent seeking behavior and often involve in corruption. Farhad Mazhar considers Nayakrishi Andolon his legacy and in the process has been exploiting the poor farmers to lead a life style he couldn't afford otherwise. Shouldn't he stop further experimentation since Nayakrishi Andolon has remained nothing more than an expanded experiment even after nearly 25 years of its existence? -------------- Dr. Abdullah A. Dewan is Professor of Economics at Eastern Michigan University   adewan@emich.edu   http://newsfrombangladesh.net/view.php?hidRecord=208891

__._,_.___

[Disclaimer: ALOCHONA Management is not liable for information contained in this message. The author takes full responsibility.]
To unsubscribe/subscribe, send request to alochona-owner@egroups.com

Your email settings: Individual Email|Traditional
Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch to Fully Featured
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe

__,_._,___