This IPS Terraviva article shows how the increased number of foreign funding restrictions and “philanthropic protectionism” laws are shrinking the “space” for NGO work. Whereas previously NGOs had the freedom to create large scale projects, such as Nobel Prize winner Muhammad Yunus’ Grameen Bank, NGOs today are unable to start new initiatives without facing severe government restrictions. This is particularly troubling as foreign funding has become increasingly hard to secure due to the global financial crisis. While it is important to regulate NGO actions, laws should not prevent humanitarian assistance from being delivered and should not be allowed to be used as a political mechanism to suppress opposition voices.
By Kanya D’Almeida and Lily Hough
Buy now, pay later. That's the power Muhammad Yunus gave to the world's poor.
What started as Yunus's own small business loans to Bangladeshi villagers grew into the Grameen Bank, the world's first microcredit venture, which now has lent over 8.26 billion dollars to 7.93 million borrowers - 97 percent of whom are women – and won Yunus the Nobel Peace Prize in 2006 for transforming the international NGO community.
"How did it happen? Civil society took the initiative," he told a consortium of international development and aid organisations gathered for the 2011 InterAction Forum here Friday. "[The people] saw that there was no limit for them anymore. A person who felt, I cannot take care of myself, suddenly found out… I am in the driver seat of my own life, nobody can control me anymore. That feeling unleashes everything."
"And we had a free space," Yunus added. "As long as the space is available, there is no problem."
Today, Yunus and his fellow panelists agreed, that space is shrinking.
Yunus, once the world's banker to the poor, arrived in Washington suddenly unemployed. Accused by Bangladesh's prime minister of "sucking blood from the poor", Yunus was forced by the government to resign from Grameen – a move the panelists said is indicative of a new challenge civil society faces to carve out a space to operate against the backdrop of an emerging trend of stifling governments.
"We're seeing an increasing number of restrictions on foreign funding and what we call the rise of philanthropic protectionism," said Doug Rutzen, president and CEO of the International Center for Not-Profit Law.
"We're seeing the squeezing of space surrounding advocacy," he added.
One needed to look no further than Friday's newspapers for evidence. The U.S. embassy in Cairo made headlines by issuing a strong defence of U.S. aid to Egypt after Egypt's State Security prosecutors probed foreign funding of civil society groups, using a Mubarak-era law that allows foreign funding only to registered NGOs.
Experts say Mubarak's policies restricted the work of NGOs, which were not granted legal status -and thus, the right to foreign funding - without state security permission.
Other reports circulated Friday said that USAID would suspend humanitarian assistance to the Gaza Strip over allegations that the Palestinian Hamas group was overstepping its boundaries and interfering with international NGOs.
Meanwhile, the U.S. ratchets up sanctions against Syria, as President Bashar Assad's brutal crackdown on civilian protests rages on unabated.
"The challenge is very existential, it's not just about activists being assassinated," said Ingrid Srinath, secretary general for CIVICUS. "It's about the social contract being renegotiated. It's been renegotiated by stealth."
A global financial crisis, Srinath said, has also put a new set of forces into play, as donors pull their resources inward to a more domestic focus.
That certainly seems to be the case in the U.S., where here in Washington lawmakers have begun to review the entire policy of providing financial assistance to other countries amidst budget constraints and debt woes.
"We haven't yet as a sector grappled with the scale of the threat that we are facing. The optimistic scenario right now is paralysis," Srinath said. "The pessimistic scenario is anarchy."
Investing in common solutions
"The theme for the conference is investing in common solutions and I think there has been - over the last five years - a huge shift in our sector in terms of understanding that it's not enough to parachute in and do your own project well," executive vice president of InterAction Lindsay Coates told IPS. "It's much more about how you can engage with others, define holistic solutions."
Ken Wollack, president of National Democratic Institute (NDI), echoed Coates's call for collaboration.
"We shouldn't have the romantic notion that civil society is the wellspring of democracy. It's important, it's critical, but it's not everything," Wollack said. "Civil society has to interact, and it's not only the government and government institutions that help them interact. We have to remember the intermediary institutions."
Those institutions, according to Wollack, are parliaments, parties, and politicians.
"If those fail, the entire democratic system will fail," Wollack added.
While Yunus suggested it may be time for the NGO community to ask what it might be doing wrong, Wollack suggested a different challenge.
"I don't think people are doing anything wrong, there are always going to be natural tensions," Wollack said. "The question is how you build institutions that can manage these natural tensions. That's what the challenge is."
"All we have to do is focus our attention only on one thing - solving the problem," Yunus added. "Human creativity is so enormous, so limitless, if you put that creativity into action, none of the problems that we see now in the world can survive."
