International Support for NGOs in Bangladesh: Some Unintended Consequences

Abstract

Based on the experience of donors in Bangladesh over the past 10 years, we can conclude that efforts to strengthen civil society and thereby democratization by providing resources to NGOs in the developing world are likely to have some unintended and negative results. From the pluralist perspective, the “Civil Society Empowerment” initiative is likely to increase antagonism and noncooperation between NGOs and mainline civil society actors, while from a radical point of view, support for NGOs is likely to undermine their willingness to serve as social mobilizers. Suggested remedies are offered to mitigate these dual tendencies.

Full text

International Support for NGOs in Bangladesh:
Some Unintended Consequences
KENDALL STILES
*
Loyola University, Chicago, Illinois, USA
Summary. — Based on the experience of donors in Bangladesh over the past 10 years, we can
conclude that efforts to strengthen civil society and thereby democratization by providing resources
to NGOs in the developing world are likely to have some unintended and negative results. From the
pluralist perspective, the ‘‘Civil Society Empowerment’’ initiative is likely to increase antagonism
and noncooperation between NGOs and mainline civil society actors, while from a radical point of
view, support for NGOs is likely to undermine their willingness to serve as social mobilizers.
Suggested remedies are offered to mitigate these dual tendencies. Ó2002 Elsevier Science Ltd. All
rights reserved.
Key words — NGO, Bangladesh, civil society, democratization, foreign aid
1. INTRODUCTION
The ‘‘Civil Society Empowerment’’ initiative
is well underway among donor agencies in
many parts of the world. It is seen as a key
element in the promotion of human rights,
democracy and grassroots development (Stiles,
1998; Van Rooy, 1997). It consists of support-
ing both development and democracy by work-
ing around government institutions, which are
widely considered corrupt, unresponsive and/
or inept, and providing resources directly to
nongovernmental actors. These nongovernmen-
tal actors, such as professional associations,
chambers of commerce, farmer cooperatives,
mothers’ clubs, religious organizations and so
forth make up civil society, the strength of
which is expected to correlate with democrati-
zation, both formal and substantive (Ndwega,
1994; White, 1994). This premise is based in
turn on the liberal/pluralist conceptions of
society’s relationship to the state, where civil
society associations serve to aggregate and ar-
ticulate mass opinion and preferences (Dahl,
1971). This civil society becomes not only the
source of sound policy and highly-trained ex-
perts to provide government with ideas and
staff, but it also serves a crucial watchdog func-
tion by holding the government accountable to
the people. Alexis deToqueville, Adam Smith,
James Ferguson and other classical liberal
thinkers characterize civil society as an active
and vocal force able to challenge state policies,
but which supports the interests of all in soci-
ety, particularly the propertied class (Pearce,
1997, p. 270). The business community is a
central player in the classical conception of civil
society. The role of the state is primarily as
guarantor of contracts and ‘‘referee’’ of dis-
putes. The focus in this approach to civil soci-
ety is on ‘‘first generation’’ human rights such
as freedom of assembly, speech and thought.
This type of civil society is entirely supportive
of private property and free market competi-
tion and is therefore a relatively conservative
force in the West today.
In general, the approach has shown great
promise. For example, it has already helped
reintegrate the FMLN guerrillas into Sal-
vadoran society, strengthened fledgling de-
mocracies in Eastern Europe, and accelerated
the provision of emergency relief (Fowler,
1992; Padron, 1987). It has contributed to the
World Development Vol. 30, No. 5, pp. 835–846, 2002
Ó2002 Elsevier Science Ltd. All rights reserved
Printed in Great Britain
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*
I would like to thank the Council for the International
Exchange of Scholars for supporting this research
through a Fulbright Senior Scholar fellowship. The fel-
lowship duration was December 1998–May 1999. I
would also like to thank my host institutions, the
Grameen Trust’s Programme for Research on Poverty
Alleviation and the Government and Politics Depart-
ment at Jahangirnagar University in Bangladesh. The
complete study on which this article is based will appear
in book form with Preager Publishers in 2002. Final
revision accepted: 3 January 2002.
835

consolidation of democracy in Former Soviet
Republics and in Latin America (Hipsher,
1998, p. 157; Vergara, 1989, p. 2; Zuniga, 1989,
p. 197). It has also helped support pro-trade
and pro-investment policies in Mexico, Poland
and elsewhere. The results have been so encour-
aging that most donors, including the multi-
laterals, have adopted some form of ‘‘political
conditionality’’ in their aid (Farrington, Bebb-
ington, Wellard, & Lewis, 1993, p. 10; George
& Sabelli, 1994, p. 142; World Bank, 1989,
p. 60).
In most developing countries, however,
the civil society empowerment strategy has
been focused almost entirely on the agencies
known as NGOs—nongovernmental organiza-
tions. This stems largely from the fact that in
places where grassroots democracy has yet to
take hold and where the private sector is still at
the ‘‘robber-baron’’ phase of maturation, there
is so much corruption and nepotism that ex-
ternal donors do not trust the integrity or ca-
pacity of organizations normally associated
with ‘‘civil society.’’ NGOs, by virtue of their
relatively independent character, their non-
profit status, and their links to poor commu-
nities that they have generally served well, offer
donors a relatively safe and convenient means
of avoiding both the public and private sector
and all their dangers. NGOs are treated as an
entry point to a burgeoning civil society which
donors will help shape.
Based on a a five-month study of NGOs and
civil society institutions in Bangladesh, I con-
clude that engagement by external donors of
indigenous NGOs runs the risk of creating rifts
and tensions that will be counterproductive to
this scheme. The research consists of interviews
(lasting an average of one hour each) con-
ducted in 1999 with 45 NGO officials, 30 donor
agencies officials, and 21 academics and civil
society leaders.
2. DONORS AND NGOS
How has this result come about? Much stems
from the style of engagement most donors use
when interfacing with NGOs. Historically, do-
nors moved very tentatively in their work with
NGOs. Multilateral donors, in particular, were
required to obtain state approval prior to work-
ing with NGOs. UNICEF helped establish a
large committee staffed by representatives of
state and NGO agencies in order to carry out
its collaborative efforts first with the Grameen
Bank (technically not an NGO, but analogous
in its operation) and later BRAC and others
(Wong, 1995, p. 17). Other official donors
waited for the results of international NGOs’
efforts, most of which centered on emergency
relief following the 1971 war of independence
and the various natural disasters that soon
followed (the Ford Foundation was the first to
engage an NGO—the Grameen Bank in the
early 1980s—in a nonemergency context).
International NGOs (INGOs) had much to
do with the creation of the NGO community in
Bangladesh, although they have withdrawn in
recent years from the scene in a variety of ways
and now play a secondary role. In some cases,
the INGOs continue to work, but their efforts
have remained largely stagnant in an ever-
expanding NGO environment (this is particu-
larly the case with the various OXFAM agen-
cies and CARE—Holloway, 1998, p. 185;
Tvedt, 1998, p. 72). INGOs tended to be the
first to support local NGOs as partners, and to
a large extent created the NGO community we
see today (INGOs founded ADAB, for exam-
ple—Timm, 1994, p. 55). INGOs such as Ca-
ritas, CUSO, PACT-PRIP (later named simply
PRIP Trust) and MIDAS have been ‘‘indige-
nized’’ and are no longer considered interna-
tional agencies but are wholly local with
Bangladeshis serving as directors, board mem-
bers and staff. Still others are shifting from
project implementers to project clearing houses,
shifting implementation to local NGOs even
as they gradually reduce funding (in favor of
locally-generated resources). Other NGOs have
simply left the scene, such as the Ford Foun-
dation which relocated its South Asian office to
Indonesia after playing a pivotal role in helping
the Grameen Bank get its start in the 1980s
(Ross, 1999). Finally, most INGOs have simply
scaled back their activities. In some cases this
was forced upon them when official donors
stopped working through INGOs and instead
engaged their former NGO partners directly.
More typically, donor fatigue had its effect on
contribution-driven INGOs that were forced to
shrink their activities to match their budgets.
One of the few exceptions is The Asia Foun-
dation which is funneling millions in USAID
funding to selected rights-oriented NGOs (Cas-
per, 1999; Emmert, 1999).
Support by official donors to NGOs has
swelled dramatically in the past 10 years (see
Table 1). Although total aid to Bangladesh has
remained relatively flat (see Table 2), in part
due to frustration with low performance by
WORLD DEVELOPMENT836

state agencies (donors estimate that nearly half
of all aid to the government is lost due to
‘‘slippage’’), aid levels to NGOs ballooned from
roughly $150 million in 1990 to nearly $450
million in 1995 the peak year in the decade.
Initially, almost all the assistance went to
a relatively small number of NGOs: BRAC,
Grameen Bank, Proshika, ASA and RDRS
(Rangpur Dinajpur Rural Service, operating in
the northwest). For example, Grameen received
$2.3 million from Norway in 1987 and $8.4
million in 1992, while Sweden gave $6.3 million
in 1987 and $7.5 million in 1992. Grameen re-
ceived another $7.8 million from other sources
(from Grameen annual reports). BRAC’s first
large infusions came in the early 1990s, as it
brought in an impressive $13.5 million from six
bilateral donors in 1992 and $27.7 million in
1997. Most generous were the Nordic states,
Canada, the European Commission, and the
United Kingdom. Eventually, once the perfor-
mance of the NGOs was established, the World
Bank entered the arena with a $50 million grant
to create a revolving fund (PKSF) to support
micro-credit operations (CDF, 1998). It also
plans a major grant to support human rights
agencies (Ahmed, 1999a). In recent years,
donors have diversified their targets of aid to
include mid-sized NGOs. Some cynically be-
lieve this is due to the fact that the large NGOs
no longer comply with their wishes (Khun,
1999).
Brian Proskorniak of CIDA’s Dhaka office
said:
Donors understand that the development needs of
Bangladesh are immense and that the NGOs are very
good in identifying, responding and prioritizing the
needs in line with donor expectations. Thus donors
feel that they have a high rate of return on their invest-
ment in Bangladesh, a positive factor in a competitive
world (ADAB, 1994, p. 90).
Tasneem Siddiqui states:
Now the question is why the international financial in-
stitutions have begun to pursue such policies towards
NGOs in Bangladesh? Answer to this question is that
the World Bank and the Asian Development Bank
policies towards the NGOs is not unique to Bangla-
desh. It is, in effect, part of implementation of their
world-wide strategies regarding NGOs... Gradually,
over the years, World Bank officials endorsed NGOs
as potentially more effective channel through which
poverty oriented development programs could be op-
erated and external resources routed to the rural poor
Table 1. Flow of grants to NGOs (1990–98 in US$ thousands)
Active NGOs New projects
approved
Funds
approved
Funds
released
Average funds
released/NGO
Local Foreign Total
1990–91a395 99 494 464 158,542 106,602 215
1991–92 523 111 634 549 287,109 121,638 192
1992–93 600 125 725 626 399,864 195,706 326
1993–94 683 124 807 581 315,024 171,009 212
1994–95 790 129 919 579 440,687 209,505 228
1995–96 882 132 1,014 702 366,810 259,302 256
1996–97 997 135 1,132 746 246,497 250,143 221
1997–98 1,096 143 1,239 705 188,390 206,867 167
1998–99b1,149 145 1,294 1,192 221,366 224,004 173
Source: NGO Affairs Bureau.
a
FY begins in July.
b
Estimates.
Table 2. Total aid to Bangladesh by type (1988–96 in US$ millions)
Aid type 1988a1989 1990 1991 1992 1993 1994 1995 1996
Project aid 830 904 1,165 1,056 984 1,182 990 1,269 1,076
Non-project 590 537 457 408 386 372 451 333 229
Food aid 301 227 187 268 241 121 118 137 138
Total 1,640 1,668 1,809 1,732 1,611 1,675 1,559 1,739 1,443
Source: BBS 1997.
a
FYs begin in July.
NGOs IN BANGLADESH 837

by bypassing the state bureaucracy (Siddiqui, 1996,
pp. 120–121).
Donors coordinate their assistance to Ban-
gladesh through a variety of mechanisms. At
the global level, development agency directors
hold annual meetings in consultation with the
Bangladeshi government—usually in Paris—in
the capacity of the Bangladesh Aid Group
(formally known as the Bangladesh Develop-
ment Partners Forum organized by the World
Bank in 1975) to lay out overall aid targets with
a minimum of coordination. Locally, donors
meet regularly in ‘‘local consultative groups’’
(LCG) under the chairmanship of the World
Bank office, with country directors meeting at
the highest level and subordinates meeting on
topical committees (Kemp, 1999). These LCGs
play an important policy-making role, particu-
larly for Europeans and ‘‘like-minded’’ donors
(the LCG on NGO activity allows NGO par-
ticipation but meets infrequently and with little
effect). Dutch policy has been very influential at
the global level (Pereira, 1997). The European
Commission has a separate office that makes
usually failed attempts at coordinating donor
policies of the European Union members in
country (Khun, 1999).
With respect to each NGO recipient, aid
comes through ad-hoc project grants, longer-
term program grants, and ultimately long-term
institutional funding via consortia. With pro-
ject grants, donors are looking for a minimum
commitment to the receiving agency and max-
imum control over processes and outcomes.
Donors demand a formal proposal from the
agency, crafted in terms of the ‘‘logical frame-
work’’—a format that stresses cost accounting
and measurable performance criteria—against
which subsequent expenditures and activities
are compared. These grants typically last no
more than one year and entail repeated visits,
both at headquarters and on site, by donor
representatives. Needless to say, few Banglade-
shi NGOs are equipped to handle this change in
operations and are typically forced to hire ac-
countants, bookkeepers and even ghost grant
writers (an important sideline for many Ban-
gladeshi academics).
Program grants are more stable, but still
fail to provide the principal need of all NGOs:
coverage of operating costs. The aim of all
NGOs is to bring multiple donors into a con-
sortium where grants are given for five-year
intervals and cover everything from specific
project costs to general overhead expenses.
Proshika was the first to succeed at this effort
and has been able to focus on programmatic
expansion as a result (Kemp, 1999). BRAC and
Grameen also have these arrangements, which
they have been able to employ to their advan-
tage. BRAC, for example, does not keep co-
herent accounts for each division, instead
borrowing from one to cover expenses in the
other, with the result that donors have no idea
where the money is really going. ASA, BRAC
and Grameen hope to eventually replace do-
nors entirely by generating sufficient revenue
through micro-credit and other business oper-
ations, but in the meantime it is difficult to sort
out whether any given set of funds comes from
the donors or other NGOs.
Even for the powerful NGOs, however, do-
nors have been able to establish parameters and
conditions for continued support. For one
thing, NGOs must complete extensive studies
and draft detailed proposals prior to receiving
funds (Proshika’s five-year plan in 1999 was
1,000 pages long). Moreover, donors are known
to simply suspend payments for reasons that
often seem arbitrary to the NGO (GSS was cut
off in this fashion in 1997–98 with the result that
it essentially went bankrupt in mid-1999).
With the introduction of large-scale donor
support in the 1990s, mobilization and ‘‘anti-
hegemonic’’ programs became less and less
common (Feldman, 1999). They instead became
gradually more concerned about financial sus-
tainability and professionalism (often at the
donors’ insistence, since donors want to avoid a
long-term commitment). As payrolls grew into
the tens of thousands and the number of clients
swelled into the millions, the major NGOs be-
came primarily concerned with keeping the
funds flowing. This has affected some of their
programmatic choices at the village level.
Micro-credit, once an initiative to empower the
poor, has come to be seen as a means of em-
powering the organization. With the creation of
PKSF and individual support from numerous
bilateral donors, hundreds of millions of dol-
lars have flowed into micro-credit programs.
Even the peasant wing of the Communist Party
of Bangladesh has become an NGO offering
micro-credit (Holloway, 1998). It is unclear,
however, whether this has translated into a
substantial gain for the borrowers in terms
of their socio-political empowerment. Many
complain that the weekly meetings of borrow-
ers have devolved into mere discussions about
how payments will be made. The rather heavy-
handed approach to payment collection has
WORLD DEVELOPMENT838

aroused concerns among many intellectuals in
Bangladesh that NGOs have come to resemble
feudal zamindars more than modern devel-
opment agencies (author interviews with Ban-
gladeshi academics). After 15 years, few
borrowers have been able to move out of pov-
erty, although a growing number of women
have become active in local politics. It is also
clear that managing these programs has ab-
sorbed a tremendous proportion of most NGOs’
energy, to the exclusion of more traditional de-
velopment and mobilization activities. Many
donors have soured on the centrality of micro-
credit in Bangladesh even as the approach has
picked up speed elsewhere. While these activities
have generally been at least minimally profit-
able, they have brought about a fairly dramatic
transformation in the make-up of the organi-
zation, creating a need for a more and more
professional staff. Where new recruits were orig-
inally prized for their passion to alleviate pov-
erty, they are now sought out for their technical
expertise. The NGO sector has become one of
the principal job markets in the country, par-
ticularly for professional women.
3. NGOS AND CIVIL SOCIETY ACTORS
The preceding material is perhaps enough to
cast doubt on the effectiveness of external
support for NGOs as a means of empowering
the poor. A less well-understood aspect of
donor-driven NGO expansion is the effect this
has on the broader institutions of civil society,
as defined both by leftists and liberals. By gen-
erating tension and conflict within civil society,
it is likely that, even by pluralist standards, the
NGO initiatives will produce counterintuitive
and largely negative outcomes.
In Bangladesh, the growth of the NGO
community has generally not coincided with
the strengthening of civil society. Quite the
contrary. NGOs have in many cases developed
adversarial relations with civil society actors—
especially the business community, the labor
movement, and the islamic right-wing. This
stems in part from the natural rivalry that one
would expect from one segment of society se-
curing privileged access to external resources.
But it also stems from suspicion on the part of
the NGOs relative to the rest of society—sus-
picion that is reinforced by donor attitudes and
priorities.
A key feature of Bangladeshi civil society is
its lack of autonomy from political forces—a
condition not anticipated by pluralist views of
civil society (Ahmed, 1998). Simply put, the
major political parties provide an arena for elite
competition via patronage distribution. They
differ only with respect to personalities rather
than platform (Rahman, 1999a). This means
loyalty is paramount and is routinely enforced
with violence as well as the penetration of any
agency in society that might rival party influ-
ence. It is well known that voter intimidation
and vote-buying are widespread in both rural
and urban settings. This is expressed in its most
extreme form in the hartal (national strike)
whereby opposition parties attempt to bring all
business activity to a halt (enforced by thugs) in
order to pressure the ruling party to resign.
The degree of penetration of civil society by
politicians is extreme. As we discuss below,
labor unions, professional associations, uni-
versity groupings, chambers of commerce and,
of course, newspapers are identified primarily
for their political affiliation (see Table 3). Ad-
vancement in most professions is based in large
part upon aligning oneself to the political lean-
ing of one’s superior or joining the relevant
association or coalition. Even NGOs have been
the target of partisan co-optation, which some
believe has been successful (Huq, 1999). Almost
Table 3. Political affiliations of selected Bangladeshi civil society institutions
Party Trade union Chambers of commerce Student groups Newspapers
BNP Bangladesh Jatiyatabadi
Sramik Dal
Metropolitan Chamber of
Commercea
Chatro Dal DINKAL
AWAMI Jatiya Sramik League Dhaka Chamber of
Commercea
Chatro League ITTEFAQ
Jatiya Jatiya Sramik Party – Chatro Samaj JANATA
Jamaat – – Chatro Shiber SANGRAM
INQUILAB
Sources: Various interviews and personal observations.
a
Affiliation is implicit.
NGOs IN BANGLADESH 839

no one is thought to be ‘‘above politics’’ and no
opinions are viewed separate from the political
affiliation of the speaker.
In this context, the place of NGOs seems at
times alien and anachronistic. They are apoli-
tical, professional, accountable to foreigners,
and often very large and wealthy relative to
other civil society actors. They naturally arouse
the suspicion of the many elites. Political par-
ties distrust them since they will not offer their
loyalty; radicals have historically opposed them
because they are so eager to work with hege-
monic actors; conservatives are threatened by
them because their progressivism disturbs the
social status quo, and the private sectors sees
in them a market rival—particularly as they in-
vest increasing sums in low-cost production
for fund-raising purposes. On the other hand,
NGOs deserve to be viewed as civil society ac-
tors in that they provide services beyond the
purview of the state, they advocate for the poor
and facilitate their mobilization, promote free-
dom in politics and the market, and help to
hold the state more accountable. Perhaps most
disturbing is the fact that NGOs are often di-
vided among themselves on their proper role.
Donors have almost compelled them to accept
an apolitical, pro-market approach:
taking with [them] many NGOs who felt unable to re-
sist the opportunities offered for influence and re-
sources. In the process, the differences with the other
models have gradually emerged and deeply divided
not only the NGO community itself, but often NGOs
from popular organizations, and national NGOs from
international donor NGOs (Pearce, 1997, p. 270).
The outcome of all this is a strong tendency
for NGOs to simply divorce themselves from
civil society in practice while at the same time
taking on its mantle in principle. NGOs have
been accused of ‘‘monopolizing’’ civil society,
diverting attention from other associations
(Kamal, 1999). Others charge them with sub-
verting civil society with inauthentic, foreign-
funded mobilization to the detriment of genuine
grassroots activism (Adhikari, 1999; Rahman,
1999a). In this way, Bangladeshi NGOs are
typical of professional development organiza-
tions elsewhere in the world (Trivedi & Ach-
arya, 1996, pp. 58–59).
In recent years NGO leaders and donors
have begun to see benefits from closer NGO-
civil society relations, which are being broached
on a case-by-case basis. As put by Mahbubul
Karim of Proshika: ‘‘During the early days,
the NGOs did not realize the importance of
working together with rest of the civil society.
Now it has been recognized by the NGOs that
they are not an isolated part of the society’’
(ADAB, 1994, p. 50). Further:
Until recently, there existed a substantial gap between
NGOs and other groups and institutions in Banglade-
shi civil society, with many NGOs preferring to re-
main aloof. Perhaps they were under the impression
that these groups and institutions had nothing to do
with development. In retrospect, this was a great mis-
take on the part of the NGOs and has helped create
confusion and suspicion of their activities (Karim,
1996, p. 137).
The European Community has specifically
urged NGOs to work more closely with the
rest of civil society (EC, 1999, p. 6). Several do-
nors are now directly supporting labor unions,
journalist associations, independent research
institutes and other non-NGO civil society ac-
tors.
NGOs have also taken steps that have re-
sulted in the alienation of key elements of the
civil society. I will consider in turn the business
community, labor unions, and isalmicists.
NGOs, by engaging in business activities in
response to donors’ emphasis on ‘‘sustainabi-
lity,’’ have begun to encounter resistance from
the business community. This is particularly
problematic since by the donors’ definition of
civil society, the private sector is an essential
player. The business sector in Bangladesh is still
very primitive, in that it resembles the ‘‘robber-
baron’’ stage of capitalist development. Large
loans are taken and never repaid, worker safety
regulations are routinely ignored, tax liabilities
skirted and government regulators bribed (The
Independent, March 24, 1999). Donors all
agree that the private sector needs a great deal
of development and maturation in order to be a
progressive force in society. While this day may
be rather distant, it is nonetheless a central
target of donors. After all, for all its faults, the
private sector generally is pro-Western and
modern (author interview with official of pri-
vate Bangladeshi agency). They are largely
secular, pro-development, supportive of tech-
nological innovation and tolerant of a larger
role for women in society. In many ways their
priorities mirror those of the NGO sector and
they are potential allies on several key issues.
From another point of view, the NGO sector
might look forward to a day when the business
community develops a deeper social consci-
ousness and begins to provide support to non-
WORLD DEVELOPMENT840

profit organizations as is commonly seen in the
West (Pati, 1999). If the relationship is poi-
soned at an early stage, this development will
likely never occur. This said, there are many
progressives in the NGO sector who see the
business community as part of the problem
with Bangladesh and not part of the solution.
The crux of the complaint being lodged by
private businesses, both large and small, is that
NGOs have an unfair advantage in business by
virtue of a whole panoply of formal and in-
formal subsidies and protections. To begin,
NGOs are tax exempt, particularly with respect
to land purchases. Thus when a large NGO
purchases land for dairy farms or pisciculture,
they automatically experience a savings of tens
of thousands of dollars relative to private
competitors. Furthermore, while businesses are
legally obligated to pay taxes in advance,
NGOs businesses are exempt from paying taxes
on profits since by definition no profits are
made. NGOs are also exempt from workplace
regulations and their workers therefore do not
organize into trade unions. Such is not the case
in the private sector where workers routinely
organize into competing unions on the same
shop floor and work stoppages occur as a result
of rivalries between worker organizations
(Jamil, 1999; Rahman, 1999b).
Other complaints relate to the cost of capital
and production. In some cases, NGOs are able
to secure loans at well below market rates. But
even when they do not, because NGOs are built
to a large extent on foreign capital which came
in the form of grants, current activities are in-
directly subsidized. Even if new activities are
undertaken with fresh private funding, the ex-
pertise to manage the operation, the organiza-
tional capacity to bring it about, and the
networks and social connections to bring the
product to market are largely founded on cheap
capital (Anam, 1999; Khan, 1999). Private firms
also take note of the tendency for embattled
NGOs to seek out donors to intercede on their
behalf with government officials, usually with
considerable success (Hashemi, 1996, p. 168).
Most troubling with regard to this emerging
issue is the fact that there are virtually no
channels of communication between the NGO
community and the private sector (Anam,
1999). Although they compete with each other
for the same contracts, NGOs and businesses
do not form joint associations, do not orches-
trate joint ventures and are generally not aware
of each other’s actions or intentions. The ex-
ception is the Grameen Bank, which considers
itself a for-profit firm and has joined chambers
of commerce. The business community, while
giving lip-service to the roles of NGOs in de-
velopment, is gradually organizing itself to
oppose their most essential income-earning ac-
tivities. It is likely that within a few years this
movement will coalesce into a full-blown anti-
NGO lobby.
Another group which has come to distrust
NGOs, in part because of policies urged by
donors, is the labor movement. Like the private
sector, the labor movement in Bangladesh
leaves much to be desired, to be sure. It is
generally neither democratic nor accountable,
in that the rank and file are excluded from all
key decisions, including when to strike. The
political parties have deeply insinuated them-
selves into the major trade unions, to the point
that the latter are defined in the press by their
party loyalty. But as political parties in Bang-
ladesh have few democratic features themselves,
this does little to promote democratic mass
movements. Instead union members became
entangled in promoting the priorities of this or
that party by supporting its hartals, attending
its rallies and intimidating opposition candi-
dates and voters at election time. In return, they
are rewarded with patronage jobs in the party
and trade union movement. Union leaders tra-
ditionally print both their trade union positions
and their various party committee memberships
on their business cards—a vivid illustration of
their dual loyalties (Moeller, 1999).
For all its faults, the trade union movement
is still carrying out an essential function of a
free society—one guaranteed by international
law and the constitution. Again, nurturing the
trade union movement is part and parcel of
promoting civil society according to the do-
nors’ conception. Likewise, from the point of
view of even some progressive NGOs, a genu-
ine mass movement cannot succeed without the
participation of workers. But in recent years
NGOs and trade unions have been at logger-
heads. The principal question is whether NGOs
will allow their workers to join unions. Cur-
rently, their tax-exempt status allows them to
dodge the question. But as more and more in-
come-generating enterprises are created and
spun off, the fig-leaf of tax exemption will dis-
appear. The Grameen Bank was recently in lit-
igation to prevent the organization of its work
force—an approach which in itself has alienated
many members of the trade union movement.
One might likewise ask whether NGOs could
be doing more to promote workers’ rights in
NGOs IN BANGLADESH 841

their various advocacy programs. While the
plight of child laborers and young garment
workers has become a focus for many human
rights organizations, the cause of traditional
male factory workers has gone almost unmen-
tioned in the NGO community. While this
ambivalence is natural enough, given the current
state of trade unions, NGOs are doing little to
promote democratic unionism or at least keep
dialogue open for the next generation of unions.
There are few exceptions and some trade
unionists have kept their fingers in both the
NGO and independent union movements (Huq,
1999). But generally speaking, the antagonism is
rather strong and appears unlikely to abate.
Finally, there is the question of how to re-
spond to the so-called islamicist threat. Al-
though they are few in number and not
especially militant, Bangladeshi fundamental-
ists have a strong presence in society and poli-
tics, such that many elites, both in rural areas
and the capital, have learned to accommodate
them. NGOs efforts to empower women in
villages do not go unnoticed by those who
stand to lose influence as a result. Many of
these village elites align with conservative mul-
lahs and attempt to plead their cause in terms
of preserving traditional family and cultural
values. Such a strategy is shrewd, since many of
these expressions resonate in the broader Ban-
gladeshi community. By confronting the isla-
micists directly with rallies and litigation, as is
currently done by many major nonprofit orga-
nizations, NGOs sometimes unintentionally
alienate large segments of the public. A large
ADAB-sponsored anti-islamicist demonstra-
tion was held in Brahmanbaria in December
1998 which prompted a violent outburst led by
local imams (Ahmed, 1999b). This began a
round of counterdemonstrations and rallies
over the next months that culminated in an at-
tack against an anti-Islam cultural festival
in March, more protests and finally an islamicist
rally in Dhaka where an imam pronounced a
‘‘fatwah’’ against Qazi Faruque, director of
Proshika. The confrontational strategy has
further precipitated a struggle within ADAB
itself over the best strategy against islamicists.
It is clear that anti-democratic and repressive
organs cannot be considered useful members of
civil society. But to exclude all such organiza-
tions in Bangladesh today would leave a very
small group. Rather, one must anticipate a
brighter day when civil society organizations
are more genuinely democratic and participa-
tory. With the financial and diplomatic support
of foreign donors, NGOs have the capacity to
serve as the social glue to bind these actors
together.
4. NGOS AS SOCIAL MOBILIZERS?
Before concluding, a few words should
be said about an alternative view of civil society
that goes largely ignored by most donors. This
is a view that civil society is best understood as
an oppositional force that aims at up-ending
established hierarchies and power structures,
rather than merely reform them. In such a
framework, NGOs could be the catalysts for
social change precisely by refusing to cooperate
with other elements of civil society. Unfortu-
nately, it becomes clear that even this more
radical view of civil society and NGOs is not
borne out by the evidence in Bangladesh.
Habermas conceives of civil society as an
anti-hegemonic force in society, whose purpose
is to aggregate the interests of power of the
marginalized members of society, described by
Gramsci as the ‘‘Other.’’ To Habermas, it is
impossible for capitalist forces, whether in the
private sector or in the state apparatus, to be
legitimate participants in civil society. Rather,
they are the target of social mobilization (see
Gibbon, 1998; Steinstra, 2001). The social
movement perspective sees the civil society as
oppositional rather than accommodating with
respect to the state and the private sector. This
view portrays civil society as a liberating social
force that challenges the hegemony of the other
sectors. It is inherently politicized and activist
and is at the root of all revolutionary move-
ments (Bosch, 1997, p. 232; Cohen & Arato,
1992; Freire, 1972).
This view of civil society was the foundation
for many NGOs in Bangladesh and elsewhere,
as it was transmitted through the writings of
Paulo Freire and exemplified in the liberation
theology of Central and South America in the
1970s and 1980s (Freire, 1972). NGO leaders in
Bangladesh, ranging from Fazlul Haque Abed
(known simply as Abed), the founder and di-
rector of the Bangladesh Rural Advancement
Committee (BRAC is Bangladesh’s largest
NGO) to Khushi Kabir, the founder and direc-
tor of Nijera Kori (an activist women’s NGO)
to Shafiqul Haque Choudhury, the founder
and director of the Association for Social Ad-
vancement (ASA has the most profitable mico-
credit program in the country), trace the
beginning of their work to the simple idea of
WORLD DEVELOPMENT842

organizing the poor with the aim of empower-
ing them—at the expense of the rural and ur-
ban elite.
The founders of the Association for Social
Advancement (ASA), forexample, received their
training in part at the major NGOs in Bang-
ladesh in the 1970s. Choudhury worked at a
Christian NGO while others were with BRAC.
Dissatisfied with what they considered the over-
bureaucratization of these mainstream organi-
zations, and inspired by the writings of Paulo
Freire, they aspired to build an organization
that could mobilize the peasantry along Maoist
lines (Rutherford, 1995, p. 55). ASA’s founders
even worked with radical groups and used
guerrilla tactics to achieve their aims (Choudh-
ury, 1999). ASA was not alone in this concern,
and most NGOs at this time were interested in
participation of the people; action by the people; re-
search by the people and the NGO into why the peo-
ple are poor. Another theme which involves all three
of these was conscientization—the process of action
and reflection by which the poor, in dialogue with
the NGO staff and with each other, come to under-
stand better and to transform both the reality in which
they live and their aspirations (Abecassis, 1990, p. 83).
Other examples are easy to find. Gonoshahajjo
Sangstha (GSS), founded by the flamboyant
F.R. Mahmood Hasan, has consistently tried
to create a powerful village network of com-
mittees and activists in the hope of forming a
national movement capable of competing in
electoral politics (many were elected in 1992—
Hasan, 1999; Wood, 1994, p. 501). Nijera Kori
has attempted to let power trickle up from rural
members the leadership by requiring almost
every officer to stand for election (Kabir, 1999),
while maintaining a strong social mobilization
strategy.
There is clearly a strong mass movement
tradition among NGO founders in Bangladesh.
But, few of these organizations have been able
to maintain it. One by one, each has been
pressured by donors to set aside their radical
messages. Nijera Kori experienced this pressure
in the early 1990s (Wood, 1994, p. 505). GSS
was recently pushed to the point of bankruptcy
by donors concerned about the extent of the
organization’s reach (Hasan, 1999). ASA has
become a mainstream NGO with one of the
largest micro-credit programs in the country,
although the director explains this transition
not so much in terms of donor pressure as
pressure from the poor themselves, who simply
had no interest in being mobilized (Choudhury,
1999; Timm, 1999). In the process, most NGOs
in Bangladesh are now squarely hierarchical
in character, contrary to Freirian injunctions
against professional leadership of the move-
ment (Freire, 1972, p. 143).
BRAC, in particular, while still actively en-
couraging its members to become more politi-
cally active, has diverted a large fraction of its
activities into so-called income-generating op-
erations, namely nonprofit business. BRAC
now runs the largest chain of retail shops in the
country, has a large printing press, a string of
dairy farms and fisheries, and countless looms
and mills for the production of medium-quality
garments for local sale and export (Smillie,
1997). This is in addition to its extensive net-
work of schools that provide more nonformal
education than the government. (Plans were in
place for the state to subcontract all nonformal
education to BRAC.) Abed also plans a ‘‘BRAC
Bank’’ that will serve middle-class customers
and a BRAC University that will dispense de-
grees in nonprofit management (Abed, 1999).
This is not to say that political mobilization
has been entirely eclipsed by these new initia-
tives. After all, hundreds of BRAC members
have competed for local office and won, and the
fact that Islamic leaders in Bangladesh have de-
clared a fatwah on Qazi Faruque Ahmed, direc-
tor of Proshika (the second-largest NGO) and
president of the Association of Development
Agencies in Bangladesh (the country’s NGO
apex organization) is a telling sign that tradi-
tional elites fear the expansion of NGO influence
(Chowdhury, 1999). GSS, BRAC, Proshika,
Nijera Kori and many other NGOs have been
the targets of fundamentalist-inspired bombings
and other attacks as a consequence of their ef-
forts. But at the same time, NGOs are careful not
to challenge the state directly, or especially the
strong role of foreign capital in the country.
Although some NGO leaders still claim to be
Marxist (as do virtually all Bangladeshi social
scientists), they have taken great pains not to
criticize globalization of its effects on the poor.
5. NGOS, CIVIL SOCIETY, AND
DEMOCRATIZATION
Donors have clearly gone far to build up a
number of large, effective NGOs in Bangladesh.
While this has resulted in increased services,
higher standard of living and enhanced status
NGOs IN BANGLADESH 843

for the rural poor, it has also exacerbated ten-
sions within the NGO community and civil
society generally. Further, the tensions between
NGOs and the rest of civil society are not in-
dicative of a radical social mobilization agenda
which might have been expected.
This said, two observations are worth mak-
ing. First, while this problem is likely to be
common in the poorest and least democratic
states in the developing world, there is no rea-
son to think it would arise in more advanced
and mature societies, such as Mexico, Poland
or South Korea. Unfortunately, these societies
have not attracted the same degree of ‘‘civil
society empowerment’’ funding as poorer states
since their civil society is already fairly strong
and able to secure indigenous funding.
Second, some rather simple remedies can be
attempted to alleviate the situation in places
such as Bangladesh. I propose a number of
strategies that are likely to solve some of the
problems associated with support for NGOs.
To begin, donors must encourage the NGO
community to organize itself more democrati-
cally and holistically. Whether this can be done
through ADAB is doubtful at this point. Do-
nors should therefore urge NGOs of all types to
form a general umbrella organization with au-
thority to regulate NGO behavior directly.
NGOs themselves should also be urged to be-
come more democratic, particularly with the
formation of boards of directors that are ac-
countable to someone other than the director.
Board memberships should also be diversified
and bring in members of the broader civil so-
ciety rather than leaders of other NGOs.
NGOs should not be encouraged to engage in
private enterprise to the extent that they cur-
rently are. On the other hand, they should be
made more sustainable through the provision
of endowments and other long-term financial
agreements. While there should still be ac-
countability to donors, it should also extend to
members and boards in a meaningful way.
Efforts to include labor unions, chambers of
commerce and professional associations in
boards of directors may be one mechanism to
bridge the gap between NGOs and civil society.
It might also help foster a sense of philanthropy
in Bangladeshi society which is now lacking.
Donors should continue their advocacy role
with the government on behalf of NGOs, but
also become advocates for other legitimate ac-
tors in civil society. Donors should diversify
their grant portfolio and provide support for
apex organizations across all of civil society.
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