03 Apr 2012

Local NGOs Funding Dilemma

Based on the paper “National Funds to Support Civil Society Organizations” published by The International Center for Not-for-Profit Law (ICNL) in July 2010, partnership between the Government and civil society organizations is the key to achieve common goals for the betterment of their country. Governmental Funds or Foundations in several countries are looked at not only as a source of money from the government but as institutions with which civil society organizations (CSOs) and Non-Governmental Organizations (NGOs) can partner as the latter are consulted upon the establishment of the former.

 

In Iraq however, this partnership requires strengthening. Neither NGOs nor civil society organizations were mentioned in the Federal General Budget Law of 2012, recently endorsed by the Iraqi Government, although some are currently receiving financial support from the government, for example via the Ministry of Education. The Budget, amounting to 100 Billion USD, included an upgrade to social benefits including granting loans to Iraqis for purposes of housing and to farmers to activate the agricultural sector. But there was no mentioning of specific financial support to CSOs or NGOS.

 

Decrease in International Funding

The peak of donor funding for humanitarian assistance in Iraq reached $3.4 billion in 2003. By contrast only 9% of that yearly funding (316 million dollars) was allotted for 2008 signaling an overall drop in funding for humanitarian efforts in Iraq.  Moreover every year since then the same pattern of steady funding drops has continued across funding fields in Iraq (with yearly funding at 3% of the 2003 high in 2011) except for funding for ‘Civil Society’ work for which some large-scale grants have been set aside by donors such as the European Union for the coming year.

Furthermore there are concerns about the commitment of the members of the former Multi-National Forces in Iraq (MNF-I) to continue their humanitarian funding following the completion of the withdrawal of all foreign forces which occurred at the end of 2011. The United States has put forward a funding opportunity via a USAID grant amounting to up to $75 million for Civil Society projects over a period of three years starting in 2012. However it reserves the right to fund any or none of the application submitted, therefore the precise amount of funding to be distributed is as yet not fully defined.

Iraq remains a violent and unstable operating context. This reduces access on the ground. Millions (an estimated 1.5 million since 2003 - UNHCR Iraq Operation Monthly Statistical Update on Return: November 2011) of Iraqis are still displaced, and humanitarian issues related to health, education, sanitation and security remain throughout Iraq.

 

While Iraq retains the status as having the 3rd largest reserves of Oil in the Middle East, oil exploitation is currently stunted by insecurity, corruption, a lack of investment, poor technology, and a number of other factors. Meanwhile, an estimated 7 million Iraqis (out of a total population of 30 million) live on less than $2 USD a day.

The Law of NGOs in Iraq – Funding Methods

 

According to the NGOs Law No. 12 of 2010, Article (13): NGOs' resources consist of: first, members' fees and dues; second, internal or external donations, grants, bequests and gifts; and third, the revenues from their activities and projects. This remains the case despite a growing debate around the issue with many NGOs calling on the government to allocate funds to support and sustain civil society organizations in Iraq.

 

In the KRG, up until a short while ago, the situation was different where under The Law of Non-Governmental Organizations in the Iraqi Kurdistan Region of 2011, Article 13 Section 4 states the Organization may obtain income from “The Organization's share of any allocation in the Region’s annual budget, and any other grants or assistance provided by the Government in support of the Organizations’ projects.” But mid-2011 this aid ceased. A new law is currently underway with an expected limitation of funding only to NGOs that can present credible project proposals to the KRG Government.

 

In Basra a draft local legislation was recently set to allocate small loans to mitigate the unemployment issue. Currently NCCI and a number of local NGOs in Basra are lobbying to ensure that national NGOs have access to such loans, despite the calls from a number of NGOs to stress the notion that “NGOs are in need of grants not loans”. The lobbying in Basra has started; more will be stated at a later stage about the results.

 

The ICNL Paper states that “the key reason to provide institutional support is to invest in the development of CSOs that can become effective partners to the government in implementing its policies… Providing project-based support has advantages as well. Project based support can yield specific results in areas in which the government wants to achieve impact, at the same time strengthening CSO experience and ability to deliver services in that area.”

 

Most of the debate about governmental grants to NGOs in Iraq centers on how humanitarian needs and developmental priorities can be served without imposing any control on the space of NGOs’ work.

 

Role of the Private Sector

 

On March 13th 2012, the United Nations Development Program (UNDP) and Shell Iraq signed an agreement to implement a range of development projects in Southern Iraq. The four year partnership aims to increase the number of local area development activities, promote local small and medium enterprises and provide vocational training to respond to the private sector needs.

 

This partnership is part of UNDP support for the local network of the Global Compact, which was launched in Iraq in October last year to promote responsible business practices in the areas of human rights, labor standards, environment and anti-corruption. The Global Compact, and these types of partnerships, also provide a useful framework for international oil companies who are operating in Iraq to meet their Corporate Social Responsibility (CSR) obligations.

 

During an NCCI Open Space Meeting in Erbil, held on Feb 2012, some of the local NGOs called for lobbying to include articles within the Iraqi investment laws by which investors need to allocate certain funds to assist LNGOs.

 

Examples from other countries show a certain level of success upon applying such methods. In Vietnam, many Vietnamese, particularly those from the center of the country, gauge their success based on the prosperity of the community in which they reside. One way in which Canadian firms have helped enrich the community around them and improve their reputation has been by meeting with local non-governmental leaders and seeking to understand what the people of the community need, what their personal ambitions are, and what they want for their descendants. With this information, Canadian firms have been able to ensure that their company’s project contributes to the ambitions of the local community.

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