A flood of 'democratisation' dollars has corrupted the NGO movement

Anu Lounela

Wherever one goes in Indonesia, one will come upon non-government organisations (NGOs). They are of all kinds and sizes: one-person offices, young activists working from home, giant offices, and training centres on the beach. NGOs are among a wide range of organisations that stand between the household and the state - they are part of 'civil society'. They do community development, support the rights of minorities like indigenous peoples and women, resist economic globalisation, and much more. To make the concerns of citizens heard by state power, NGOs are in front.

NGOs are born and die again as fast as activists are able to act, and funding agencies able to give. According to Kastorius Sinaga (Bisnis Info, September 2001), there are 13,400 officially registered NGOs alone, not to mention those unregistered. In the 1980s there were only around 3,000.

However, some international donors as well as voices within the NGO community say all is not well. Media accounts have claimed that, after the mushrooming of NGOs since 1998, funding has been misused, while some NGOs formed mainly for the money lack orientation in their activities. NGOs are accused of lacking transparency towards the Indonesian people, and of deliberately keeping vague their ideological commitment to 'strengthen civil society' in order to get more funds.

The reason for the poor management and poor ethics, especially among newer NGOs, is that they have become places where ex-business people, ex-state officials, and others lacking a clear vision earn a salary. Some NGO activists also believe that fooling donors with false receipts is not wrong, since the donors have their own agendas that do not always coincide with those of the NGOs.

Swedish anthropologist Hans Antlhas been doing research on Indonesia for a long time and has written several books. He is also project manager for the Ford Foundation, a major American funding agency. 'Problems have been evident already for a couple of years. We now have to save the good reputation of NGOs in Indonesia, or affairs will turn for the worst. Of great importance is the trust between different stakeholders, especially donors and NGOs. If this does not exist, development cooperation will not work', he says.

Roots

The first Indonesian NGOs were born in the 1970s. Suharto was ruling Indonesia with an iron hand. There was no freedom of speech, and NGOs generally chose to concentrate on (safe) 'development' work.

Mansour Fakih is another researcher who has long been studying Indonesian civil society. He once divided NGOs into three groups: those that adapt, those that reform, and those that strive for transformation. The first adapted to the development policy of the state and tried to participate without a vision of their own. Reformers aimed to strengthen civil society, but did not question the hegemonic development ideology based on the idea of economic growth. The minority of NGOs aiming at transformative change wanted to challenge the hegemonic development ideology, for example by using 'participatory research' methods.

When the economic crisis of 1997 turned into the political crisis of 1998, foreign funding agencies - especially American - rushed to Indonesia. They wanted to help build good governance, strengthen civil society, develop democracy, and save the environment and indigenous people. A real money circus started after Suharto stepped down in May 1998. NGOs mushroomed everywhere, all promoting 'democratisation'. In 1999 many more international donors entered Indonesia to support free elections with gigantic sums of money. Civil society had been suppressed for so long - donors felt it was the right time to support a strengthening process.

Paskah Irianto from the Indonesian legal Aid and Human Rights Association (PBHI) thinks the corruption sometimes goes beyond an unclear ideology. Some amounts of money are 'stolen' in administration, and receipts do not always correspond with reality. NGOs often obtain funding for the same proposal from several sources at once. Some obtain money from unsavoury Indonesian sources. For example, a report in Media Indonesia (5 October 2001) alleged that Indonesian Corruption Watch, a major watchdog, was itself partly backed by well-known corrupt business people and politicians. The basic problem, according to a series of articles in Media Indonesia early October 2001, is that most activists depend on NGOs to make a living. This creates an incentive to manipulate reports to donor organisations.

Many other NGOs feel uncomfortable about the situation. Money has distorted the NGO movement, so that institutions formed purely to get money are mixed with 'good' NGOs.

If overseas donors worry about corruption within Indonesian NGOs, bitter stories are also told within the NGO community about the foreign agencies. Foreign development workers grow rich from the development business. They move from one country to another while spreading their own views on how things should be done.

The UN Development Program (UNDP), the World Bank, and some individual governments are financing a 'good governance' program in Indonesia. It operates like a gatekeeper for NGO financial support. The UNDP program has an Indonesian board of supervision which evaluates incoming applications. However, the system is bureaucratic and top down. Jari (Jaringan Independen untuk Transparensi dan Akuntabilitas Pembangunan Indonesia) is a network of about eighty civil society organisations from around Indonesia. Yando Zakaria, who works at Jari, says Jari recently refused funding offered by UNDP. UNDP had rewritten the Jari funding application to include UN Volunteers, with a much higher salary than that of local staff. 'It is difficult to preserve your own mission and vision when the donor is recruiting staff, as well as changing the proposal and the amount of funding asked', says Yando.

Some NGOs are also upset with the US Agency for International Development. USAID currently administers about 68 grants and 22 cooperative agreements in Indonesia, with both international and Indonesian participating organisations. This US government agency's annual budget in Indonesia is US$ 130 million. Some Indonesian partners feel USAID controls their agendas. Walhi is Indonesia's major environmental umbrella organisation. Nieke Dewayani, its staff member responsible for donor relations, says that every time Walhi renews its contract with USAID there is a 'gentleman's agreement' to avoid using USAID funding for activities that concern mining. Joko Waluyo, the head of Walhi's information and communication department, adds that recently USAID was not willing to fund the Walhi environmental magazine Tanah Air. In his opinion, USAID disliked Walhi's mining advocacy.

In an interview with me, a USAID official said: 'We do not have these kinds of conditions tied to our agreements. We do not forbid criticism of badly behaving US corporations by the organisations we support.' However, this is not the first time that allegations have arisen of USAID cutting its aid for activities that threaten US companies. Inside Indonesia republished an IPS news item in its October-December 2000 edition in which the anti-mining group Jatam (Indonesian Mining Advocacy Network) had its USAID funding cut after it criticised US mining giant Newmont.

'Spoilt'

According to Hans Antlcivil society organisations have to a certain extent been 'spoilt' by the easy access to foreign funding. This was for instance the case during the 1999 election, with crash programs of voter education and election monitoring. 'Is it anywhere else in the world a habit to give to seminar participants a cash payment in an envelope? There are also allegations that some foundations were set up to launder money or as fronts for commercial enterprises. However, most civil society organisations are committed and are doing important work,' he says.

Many overseas donors are now changing their strategies towards Indonesian NGOs. Donors have to be accountable to their sources for the funding they hand out. The new strategies probably will include more support for multilateral agencies such as UNDP, more information sharing between donors, direct funding for local governments (rather than NGOs), and standardised reporting mechanisms to ensure the money goes to the 'right address'.

LP3ES, the Institute for Social and Economic Research, Education and Information, is one of Indonesia's oldest NGOs. It was founded in 1971 by some Indonesian academics, and funded by the German agency FNS (Friedrich Naumann Stiftung). Imam Ahmad is LP3ES' managing director. He says: 'It is only a question of time when the funding agencies will change their strategy or go away and stop giving direct support to civil society. We have to change. From the very start we have been too dependent on them. Now we have a warning: become self-sufficient or die.'

'I feel as if I am a public servant of the United States!' Imam Ahmed continues. 'LP3ES gets its funding from many US agencies, such as USAID or the Ford Foundation. I get my salary from them. In my office there are seventy employees. If the funding stops, what will happen to their families? We receive no money from the Indonesian government. We do not get money from poor Indonesians. Maybe we will transform into a consultancy firm.'

Others say Indonesian NGOs are already more like consultancy firms than civil society organisations, since their 'managers' work so hard to adapt to donor ideas and requests. 'I think many of the grassroot NGOs will soon die,' says NGO veteran S Indro Tjahjono, director of the environmental organisation Skephi and an advisor of the labour minister. 'The middle class is no longer attracted to the idea of making NGOs a part of the social transformation movement.'

'As the funding agencies change their strategies, the NGOs dependent on them will live or die. NGOs have to create their own ideology, and not merely be followers of the neo-liberal agencies. We have to search for self-sufficiency, work with the people and the communities, and together create a people's movements', says Indro Tjahjono.

Anu Lounela (alounela@indosat.net.id) is an NGO volunteer with Insist in Yogyakarta (insist@yogya.wasantara.net.id).