ADB directly funding NGOs, CSOs — why not?

The recently released mid-term review of “2020 Strategy,” the Asian Development Bank’s long-term blueprint for its development efforts in Asia-Pacific, mentions partnerships not only as one of its 10 strategic priorities for the region, but also as one of the five “drivers of change” in the future. ADB President Takehiko Nakao himself referred to partnerships and how it should play a leading role in the bank’s work from now on during the recently concluded annual meeting in Astana, Kazakhstan. Partnerships include cofinancing with other multilateral banks and development partners, collaboration with the private sector through PPPs, and knowledge-sharing between bilateral institutions and aid experts — but is this only for other lending and multilateral institutions, governments and the private sector? Chris Morris, head of ADB’s NGO and civil society department, believes that financing and partnership opportunities with NGOs and CSOs can be a new and exciting opportunity for the Manila-based institution to leverage its operations and even resources — which ADB has not explored deeply enough yet. “I think the expectation of the ADB in terms of partnership opportunities is rather narrow,” he told Devex, adding that while it is ideal to look at the private sector and other multilateral development agencies as the main partners for financing and resource leverage, there are also “opportunities [to] work with NGOs or people from CSOs.” NGOs and CSOs are adopting an increasingly higher profile in international development efforts, and for instance Morris mentioned how Indonesia has realized this by helping address a ban on community groups participating in development projects. Nevertheless, he still thinks they are being underutilized in Asia-Pacific. Right now, ADB doesn’t fund NGOs directly, as its main partners are the member governments. So if NGOs and CSOs want to work with ADB, they “should familiarize with the partnership strategy of the country” they are working in. The bank’s current policy document regarding cooperation between the bank and NGOs was implemented in 1998 and views NGOs as partners mainly on the coordination and implementation side of development strategies and programs, rather than financing. Asked whether there are plans to revise the policy, Morris admitted there have been talks now and again, but “policies are very high-level and it takes a lot of resources and commitment to do a policy update.” Looking at potential The idea of ADB directly financing NGOs, according to the bank’s chief expert on the issue, would be beneficial in the long-run for the institution, especially in the case of collaborating with large and established international aid groups like Plan International or World Vision, who has the experience, credibility and even financial muscle to partner successfully with international financial institutions. “What I can imagine is working with large international NGOs, and they’re doing the softer aspect. If one just looks at the grant side of things, [some of them] have raised more money than ADB has,” he explained. “We’re actually contracting to implement some of our work. That way, we could pool our money in one pot and let them get on with it.” Morris added that it “would leverage up their finance to be part of our development but we don’t do that at the moment. There are different models that have potential.” Whether the sustainability and effectiveness of this approach — if applied — can be successfully achieved for the benefit of the region remains to be seen. This is aside from the risk for smaller and startup NGOs and CSOs of being left out because they don’t entirely have the “historical credibility” to enter into such arrangements, depending on the potential requirements. Another issue that could come up in pursuing partnerships with NGOs and CSOs, according to Morris, is the way that collaboration would be conducted. He said that there are various ways of engaging with the groups and it has to be clarified (like terminology) moving forward because it will affect other development processes including bidding procedure, contractual engagements and procurement processes. But again, these are all just discussions — at least for now — that still need to be considered by the bank’s board, and whether that process can lead to a direct funding mechanism for NGOs and CSOs from ADB in the future is still up in the air. “It’s an area that we are looking and reviewing at as models,” he said. “One can commercially contract with NGOs and ADB is responsible for ensuring that its funds are efficiently and effectively spent and in a competitive way and provide opportunities for the people to bid or work with us.” Morris concluded: “The terminology explains the kind of engagement. We have various mechanisms but we have a continual review of our processes and if we’re expanding more into partnerships then we will keep on scrutinizing the mechanisms and making sure that they are the best for that procedure.” Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day. See more: Friend or foe? ADB and a China-led development bank How ADB’s ‘culture of communication’ has changed What to expect at the ADB annual meeting What Myanmar needs from ADB How to keep ADB relevant in a changing Asia Is the time ripe for China's own aid agency? Where does ADB spend its money? ADB's plans to make itself more relevant, responsive and effective ADB: Co-financing, partnerships to bridge Asia-Pacific’s development gap