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The Political Economy of NGOs is an invaluable contribution to the theorisation of NGOs. Despite the appearance of being agents of social transformation, Fernando explains how NGOs are co-opted by and reproduce the neoliberal state.

Jude L Fernando, The Political Economy of NGOs: State Formation in Sri Lanka and Bangladesh (Pluto 2011), xii, 281pp.

NGOs have been a source of controversy almost ever since they experienced a resurgence from about the mid-1980s. On the surface of it, the argument is simple: if NGOs get money and ideas largely from Western governments – the same ones imposing neoliberal development models to guarantee economic supremacy, whilst invading foreign countries to secure military supremacy – how can they also be working in the interests of the poor and oppressed? And how can they be said to represent the poor when they are unelected and usually have no experience of poverty themselves? Under capitalism, it seems NGOs have to be more accountable to those that fund them, than to those they seek to help.

It is true that when Western governments moved towards funding NGOs on a systematic basis, starting in the 1980s and intensifying in the 1990s, NGOs found themselves under increasing pressure to accept restrictions on programme activities, embrace more corporate organisational cultures, and adopt market-friendly development programmes. On the other hand, few NGOs would argue in favour of neoliberal reforms. Moreover, often their activities are perceived as essential: they provide access to safe drinking water in the poorest countries, emergency relief in humanitarian crises, and document and expose government human rights abuses.

There have been few attempts to theorise the role of NGOs under capitalism. Fernando’s analysis is a much-needed contribution because it offers both a historical and critical perspective on claims about the progressive and transformative potential of NGOs, and insights into their material and ideological roles in social change. The analysis opens with a discussion of agency, arguing that while capitalism shapes NGO agency, NGOs have the capacity to transform themselves. This is a tempting thesis, for its optimism and its emphasis not only on the limitations of capitalism but the potential for human action to challenge and shape what is seemingly insurmountable. The implication, however, is that the transformation of NGOs can take place within the parameters of capitalism. Rather than focusing on using our agency to transform the system, Fernando seems to ask us to focus our agency on transforming NGOs, suggesting that their contributions are necessary in order to address imperfect social and economic relations (p.280). Although this is an underlying theme running throughout The Political Economy of NGOs, it is perhaps the only flaw in what is otherwise a rigorous and thought-provoking examination of NGOs.

Tracing the history of NGOs in Sri Lanka and Bangladesh from the pre-colonial through the colonial to the post-independence eras of both countries, Fernando explains how NGO interventions under modern capitalism ultimately reproduce the very capitalist structures they aim to challenge. Although the precise definition of ‘NGO’ lacks consensus, and national rather than international laws bind NGO activity, ‘the identification of a given organisation as an NGO is determined not so much by its internal characteristics as by its external relationships and political affiliations’ (p.4). This is reflected in the fact that the term itself has become mainstream, and ‘even, one may argue, an ideology’ (p.2). This dominance is based, at least in part, on the structural privileges NGOs enjoy in relation to the state. Understanding NGOs means understanding their institutional identity and the interests these serve.

For more than three decades, state investment in public services has been shrinking. The privatisation of public services has been presented as the only alternative. This ideological project has required willing partners to compensate for the lack of investment. However, while the private sector is seen as tainted for being motivated by profits, NGOs are perceived as having a moral framework. The stage is thus set: governments can no longer afford the welfare state, but NGOs have the skills to compensate and can implement welfare provision more cheaply and efficiently. Suitably elevated to the status of ‘third sector’ and serving to counter the excesses of the state, NGOs have been mythologised as saviours of the poorest and most vulnerable. Policy co-ordination has become the new mantra.

The problem with this set-up is that co-ordination is generally one way: in favour of neoliberal agendas. What we experience is the blurring of boundaries between states, markets and NGOs (p.5), while neoliberal claims about the limitations and the decline of the state are validated. In reality the role of the state has not diminished; the bank bailouts and the ongoing imperialist wars are indications of the consolidation of the state and state power. Governments are complicit in upholding a system that is inherently incapable of providing both super-profits for the few and abolishing poverty for the masses.

It is in the context of the crises of accumulation and legitimisation produced by capitalism that NGOs thrive. In Britain this is perhaps made most obvious by the Tories’ efforts to initiate the ‘Big Society’. In the midst the biggest austerity drive in almost a century, the project is an attempt to present an appearance of democracy and citizen control over resources, but in reality is a way to subvert and weaken democracy through unelected officials making decisions for the poorest.

But NGOs have always played a dual role. Fernando argues that in colonial Sri Lanka and Bangladesh, while NGOs were useful for the consolidation of native elite control over the post-colonial state, they also had been sites for mobilising against the colonial state (p.109). The process of bringing NGOs under the control of the state was helped by missionary organisations. Missionaries explicitly rejected the Marxism of the revolutionary groups with whom they came into contact, reassuring governments that they were in no way threats to government interests (p.79). Radicals were suppressed by middle class reformers (p.65).

Where there were fewer reformers, there was more scope for radicalism. In eastern Bengal, ‘the relatively low density of NGOs ... led to a higher incidence of peasant uprisings until the independent state of Bangladesh was created in 1971’ (p.39). Missionaries instead helped to promote ideas such as self-reliance and self-help, and sought legitimisation through religious and ethnic ideologies (p.67). Indeed, following independence in both Sri Lanka and Bangladesh, one of the main legacies of NGO activity has been the replacement of class politics with ethno-religious nationalist politics, substituting ‘a critique of cultural relations for the critique of class relations’ (p.41). This, Fernando argues, has been counterproductive to the quest for equality and justice, and raises doubts about the ability of NGOs to compensate for the shortcomings of the state.

There are a number of examples used to illustrate this tendency. During the war in Sri Lanka, many Sinhalese NGOs used the language of humanitarianism and the need to uphold the rule of law, to support the government’s war against the Tamil Tigers. At the same time, Tamil diaspora NGOs were pressuring international NGOs and donor governments to stop sending aid on the basis of the government’s appalling human rights record. By taking a sectional approach to the conflict, either on the side of the Sinhalese or on the side of the Tamils, NGOs failed to respond to the tragedy. They began taking up issues of conflict management and peacebuilding, not economic issues (p.132), and never addressed the fundamental causes of the war.

Fernando notes that ‘the peace movement was both superficial and a colossal waste of resources, failing primarily because it did not engage with the deeper structural issues underlying the ethnic conflict’ (p.140). Peace initiatives were eventually taken over completely by the government. Ultimately, international NGOs could do virtually nothing about the human rights situation in Sri Lanka because of the willingness of several non-Western countries such as India, China, Russia and Malaysia to block the UN’s attempts to attach human rights conditions to aid (p.173). The government felt its policies towards the Tigers were thus vindicated. In the meantime, the situation also bolstered anti-NGO and anti-Western sentiment within the country, a tendency that has always been stoked by the Sri Lankan government.

This anti-Western sentiment is not misplaced: it is relatively easy for the Sri Lankan government to point to the duplicity of Western governments fighting their own wars against terrorism. Using the logic of the ‘War on Terror’ to its advantage, the Sri Lankan government argued that human rights investigations would undermine national security imperatives. Humanitarian workers were welcome as long as they complemented the troops and worked within the boundaries of the government’s national framework (p.174). Restrictions on NGOs were slowly being relaxed, but they could not operate independently of government.

Governments use anti-NGO propaganda to mask crises generated by capitalist development. As religious leaders venerated Rajapaksa with honorary titles for supposedly saving Sri Lanka from the Tamils, NGOs were likened to the enemies of the ancient Sinhalese King Dutugemunu and accused of undermining the security and sovereignty of the nation (p.175). Following the war and the decimation of the Tigers, the establishment of reconstruction and development projects has reinforced the dominance of the majority narrative, concerned with economic progress along neoliberal lines.

In Bangladesh, NGOs and the state have evolved as parallel regimes. When Bangladesh took on neoliberal reforms, NGOs helped encourage processes of social change to develop according to the imperatives of transnational capital. Following the election of Zia Rahman in 1975, and the establishment of his Bangladesh National Party (BNP) in 1978, Rahman embarked on a project to strengthen neoliberal reforms and a nationalist project that used Islam to consolidate his power. This created the space for new Islamic NGOs to emerge. Although they lacked management expertise, and funding from Islamic countries was irregular, they developed social networks at local and national levels that allowed them to become a powerful force in society. Islamisation, combined with market-oriented reforms, continued under General Ershad when he took power and declared martial law in 1982. These reforms were favoured by the World Bank, but were met with opposition from students, trade unions, intellectuals and some bureaucrats (p.193). Ershad continued the tactic of using religion to consolidate his political power and delegitimise opposition parties.

Foreign aid had another important effect in post-independence Bangladesh: people who were once involved in revolutionary politics were now drawn towards NGOs. Missionaries from the US, sympathetic to liberation theology, but also recipients of US funding, ‘played an influential role in the ideological synthesis of capitalism and socialism within the organisational structures of NGOs’ (p.185). Donors used poverty levels to justify pouring vast resources into NGOs; but Bangladesh was also of strategic importance to the big government donors like the US and UK. From the early 1990s, the largest NGOs, such as BRAC, PROSHIKA and Grameen, expanded to the level of being parallel governments, with developed bureaucracies and departments covering whole areas of the country (p.198). More recently, they have established their own schools, universities and hospitals (p.225), and launched business ventures (p.205). Successive governments have reinforced NGO power by appointing NGO leaders to influential positions in government.

Given Fernando’s richly detailed account of the manner in which NGOs have responded to crises under capitalism, it is unclear why he still places so much faith in them: ‘they have played, and will continue to play, a central role in producing new ideas and leadership for politically meaningful social transformation’ and ‘in many instances, where all other democratic means have been exhausted, NGOs are the only institutions through which marginalised groups have been able to voice their concerns and organise their struggles’ (p.xi). He later notes that ‘the potential of NGOs to bring about substantive social transformation is undiminished’ (p.xii). And yet examples of NGO leadership and substantive impact on the processes of social change are few and far between. It is not the case that NGOs have nothing to contribute, but if they are grounded in capitalist relations, they will not place class inequalities at the centre of their analysis and approach, in the way Fernando argues they could.

Contrary to NGOs being ‘at the centre of protests against US and UK involvement in Iraq’ (p.12), NGOs played a marginal role in the anti-war movement in the UK; it was the radical left that was at the heart of this broad movement. It has been movements, not NGOs, that have made more serious progress in challenging the status quo. More recently, it was the mass movements in Tunisia and Egypt that precipitated the downfall of the dictatorships in those countries, not NGOs. In the case of Egypt, the NGOs only decided to back the movement against Mubarak once the revolution had forced the situation to a point of no return. Until that point, funding constraints were more pressing; constraints that always force the separation of politics and economics. This is the approach that NGOs in general have taken to social change. While Fernando superbly demonstrates this, the wrong conclusions are drawn: that NGOs have the capacity to transform themselves, and that we should therefore focus our attention on NGO agency.

There have been circumstances in which NGOs have become involved in progressive movements, thereby playing a role in challenging the status quo. But history shows that such cases are extremely rare and emerge only when mass movements are already in play. While Fernando presents a challenge to the ‘NGO industrial complex’ (p.274) to reinvent itself, this can only happen if NGOs make a deliberate choice – one that has existential implications – to fight against capitalism rather than defend it.

Feyzi Ismail

Feyzi Ismail

Feyzi teaches at SOAS, University of London, and is active in UCU and the anti-war and anti-austerity movements. She is a contributor to The Assault on Universities: A Manifesto for Resistance, and is on the editorial board of Counterfire.


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