Wednesday, February 11, 2015
(Un)developing Nepal
The following opinion piece was published in Republica on February 11, 2015 with the title "Development Failure". The direct link to the article in Republica is here.
(Un)developing
Nepal
Ernesto Sirolli, an expert in international development, likes to tell
a story. He worked in Zambia in the 1970s with an Italian international
development organization. One day, his team found an amazingly fertile valley
but saw that it was not cultivated. Noticing an opportunity to “teach” the
locals how to utilize that land, his team distributed tomato seeds to the
locals and asked them to plant the seeds. The locals were not interested. His
team thought that maybe the locals were looking for some incentive from the
rich Italians. So, they decided to pay wages to the locals to grow tomatoes.
That did the trick, and the locals got to work.
After some time, the valley was filled with tons of red Italian
tomatoes hanging from their plants. One morning, everyone woke up to see hundreds
of hippos from a nearby river come to the valley and eat all the tomatoes and
the plants. When Ernesto’s team looked at the farmers with horror, the local farmers
replied, “That’s why we don’t do agriculture in this valley.” The point is that
the Italians did not bother to ask why the locals had not cultivated the
valley. They simply assumed that the locals did not know any better, and needed
some “lessons” on agriculture from the wise Europeans. The current state of
development work in Nepal has similar problems, and some more.
First, the development sector’s incentives are not aligned properly.
Budget and programming for a project is often determined by the parliament or
some ministerial committee of the donor government. The donor’s staffs put too
much pressure on local Nepali implementing institutions to spend the budget
within a specified timeframe. Often, the Nepali institution knows that
activities designed by the donor will not produce results. The donor’s
holier-than-thou attitude scares them from alerting the donor of any
shortcomings. So, they remain silent and spend the money because an inability
to spend is taken by the donor as a signal of the local organization’s
inability to perform.
Misaligned incentives stifle innovation and savings. For example, a
local organization becomes efficient and innovative and save $70,000 out of the
$500,000 budget it is given for a program. It asks the donor if it could use
that savings on a similar program that it believes is worthy of those funds. Does
it get commended for its efficiency and innovation? Does the donor permit the
local organization to divert that savings to another worthwhile project or cause?
We would like to say ‘yes’, but it rarely happens. It is more likely that the
donor will note that the local organization does not have the capacity or
ability to spend the money it is given. It is more likely that this evaluation will
result in no future work for the local organization from that donor.
Second, the development sector in Nepal is very myopic. It is riddled
with short-term projects. Even when programs are long-term, the donor judges
the program based on immediate short-term output or short-term participation
rates. As a result, programs on peacebuilding or good governance, which take a
long time to gestate and produce results, are often deemed unworthy because
immediate results are not visible. Judgment based on participation rates allows
the program to create perverse incentives in order to get better results. There
are programs that provide incentives such as per-diem or similar compensations
to people who use the programs in order to boost participation rates.
For example, a paralegal program in Nepal works to resolve people’s
disputes locally. To attract participation in the program, people get paid Rs
500 if they approach the program to resolve their dispute. However, such
incentives backfire. I have met people who have told me they faked a dispute on
a Friday morning, approached the program on the afternoon, accepted the
program’s suggestions to “mend their difference,” and together went to a local
bar in the evening to spend the money each of them received.
Third, local knowledge is either ignored or deemed inferior by donors.
There is an excessive top-down control over projects and resources because
donors do not trust local Nepali organizations. Plans and programs are designed
and resource allocations are determined abroad. The role for local
organizations is limited to implementing the activities, and simply checking
the various boxes that the donor wants checked. This is especially true of most
UN programs and projects. Very little local knowledge input is utilized in
designing programs.
The top-down approach and distrust of locals completely ignores the
reality that locals know the conditions and problems better. Instead, we have
parachute consultants, who consider themselves “experts” on this or that issue,
dropping in from abroad to design local programs. They aren’t much interested
in listening to what the locals have to say, and are more interested in
instructing the locals what to do. They believe they know better. I’m not
implying all of them are evil or intentionally obnoxious. Some of them are
guided by benevolent ignorance, like the Italians who were so excited to teach
Zambians how to grow tomatoes that they forgot to ask the locals why they
hadn’t cultivated the obviously fertile valley. Donors should note that dismissing
local knowledge results in program failure.
Fourth, many development programming ideas are either outdated or
repeated to an extent of being counterproductive. Donors compete against one
another to launch the same program in the same districts. Their efforts would
be much more productive if they collaborate or create a basket fund to which
everyone contributes, and a joint team runs the program. There have been some
efforts on that front in recent years. Governments of the UK, Denmark and
Switzerland recently created a “Governance Facility” that aims to exercise
collaboration on peacebuilding and local governance programming. If that brings
good results, it could show others the way in those fields. But, there is scope
for so much more. More donors need to follow suit.
Also, most development organizations still utilize outdated tools and
concepts. Their reliance on logframes and short-term result capturing matrices
is counterproductive in areas of long-term development needs. When they are not
utilizing outdated tools, they create new ones simply for the sake of it. A few
years ago, the World Bank proposed a list of 22 social accountability tools,
and launched a project called PRAN to train Nepalis to use the tools. However, those
are too many tools, and even the World Bank would agree that PRAN was not a
successful project.
The World Bank’s approach is akin to throwing the kitchen sink at a
problem and hoping that something works. The approach needs to be more focused.
I find that only three of those tools—Right to Information, Public Audit, and
Public Expenditure Tracking System—actually produce decent outcomes. Others may
find a couple more that work. It would be harsh to say the rest of those tools are
useless, but they don’t appear very solid. New approaches to solving problems
are always welcome, but they should have a lasting characteristic instead of
simply appearing to be another fad that the development industry churns out
once every decade.
Finally, most development programs suffer from poor institutional
learning. A management change results in loss of years of learning. A
decade-long program suddenly comes to an end, and all those years of knowledge
and wisdom are not transferred to others. Sometimes, poor human resource
policies make the matter worse. For example, local staff in Nepal’s JICA office
may be seasoned veterans with decades of development work experience, but they
have to report to recent Japanese college graduates on a one- or two-year term
that can only be understood as an “exposure” posting. A long-term commitment of
human and other resources is critical for institutional learning and its
continued transfer.
Labels: development, innovation, institutional learning, logframes
Friday, February 8, 2013
I am Vikas
The following article was published in today's Kathmandu Post (Feb 8, 2013) with the title "I am Vikas". It is a response to Gyanu Adhikari's op-ed piece published on Jan 29, 213 with the title "Donor darlings". The unedited version of my response is below.
I
am Vikas
By:
Mukesh Khanal
I read Gyanu
Adhikari’s opinion piece titled “Donor darlings” on January
29 in The Kathmandu Post. While it hints
at a possible disconnect between donor and recipient mindsets and philosophies,
there are a number of issues on which I earnestly disagree. I am one of many
“Vikas” working in one of many INGOs in Nepal. I was educated in the west; returned
after completing my studies; worked for an NGO for a year and half; and left
that NGO for a job with an INGO where I have been working for over a year now. But,
that is where my similarities with the fictional “Vikas” end.
The path to my
elite-ness is somewhat different than the one prescribed by “Donor darlings”. My
parents could not afford to send me to the best schools in Kathmandu due to
their limited income as public school teachers. Nevertheless, I did well in an
English medium school in Biratnagar, and did alright in my ISc in Dhulikhel. When
I decided to go west for my higher studies, my parents emptied their retirement
savings and sold the only piece of land they’d ever owned (bought with their savings
from over 15 years of public service). Additionally, they took loans from
friends and families at exorbitant rates because they had no collateral for taking
out bank loans. While studying in the west, I worked illegally washing dishes,
mopping floors, cleanings toilets, and flipping burgers to pay for my
accommodation and tuition fees. I understand that not many Nepali students get
the opportunity to study in the west. However, the mere fact that I did tells
only part of the story of how I got there and nothing more.
Upon completing my Master’s
in economics, I received two offers: a fully-sponsored PhD, and a job at a
multinational in Singapore. After some personal reflections, I decided to reject
both and returned to Nepal, fully aware of the opportunities in terms of remuneration
and lifestyle that I had given up.
I never considered myself
cut out for public service. Given my interests in research and academics, and given
my impression of Nepali bureaucracy, I knew I wouldn’t survive in public
service. Even if I did want to enter public service, there aren’t enough
opportunities there as is evidenced by thousands of applications for a handful
of advertised positions. And, private sector job growth is mostly in the
financial sector, in which I was unenthusiastic to work. I did not consider
becoming an entrepreneur—as some returnees have—because I do not believe I have
the pedigree, resources and ideas to pursue that lifestyle. I did elect to
teach—part time—because it is a medium for me to introduce the type of
pedagogical approach I had appreciated during my college days in the west.
In the end, I decided
to join a local non-governmental research organization. I do not know if that
was at the expense of an “Anju” who
also had a Master’s degree from a Nepali university. My decision to join this
particular organization was based on their engagement in economic and policy
research that contribute to the overall development of the country. I learnt
that most research in Nepal—academic or social—are donor funded. I realized
that this was not due to our lack of resources but due to our collective choice
to be engaged in philanthropy for religious purposes and not for secular pursuit
of knowledge. I agree, for various reasons, that donor funding is not the ideal
way to pursue research, but our choices are limited until we are able to fund
ourselves.
“Donor darlings”
rightly points to perhaps the lack of accountability among Nepali NGOs as well
as donor agencies. Of course, donors may have their own agendas when they spend
millions of dollars in Nepal’s development activities. At times, I struggle to
reconcile between the amount of money that is poured into Nepal in the name of
development and actual outcomes in terms of actual development. Personal doubts
aside, fact of the matter is, whether we like it or not, we have made a
conscious decision to function with foreign assistance. Also, we have to
realize that primary accountability of donor agencies is to their own taxpayers,
not ours. The best we can do is to put pressure on Nepal government to devise
policies and plans to make donors accountable to Nepali people, too. Maybe we
need to work more on that instead of criticizing the entire donor community.
I know that many people
question the intentions of donor-funded development assistance, and many more
question the ethical and moral boundaries of donor interventions and
activities. However, interventions and activities are constantly changed,
tweaked and even rejected based on the boundaries of operational philosophies.
Donors, NGOs, INGOs, and those who work in development are frequently disappointed
when they see their efforts bringing very little change. But, that little
change could be a consequence of poor program design and implementation, and
not necessarily the result of “evil” donor policies.
The premise of “Donor darlings”
op-ed piece fairly represents the emotions of some towards the development
sector and the people that are part of it. But, it is laden with far-fetched assumptions,
over-arching generalization, and simply a failure to take into perspective the
reality of development and development sector in Nepal. It is an opinion piece
and reads like one. A more in-depth analysis of political and socio-economic conditions
of Nepal that have led to the current situation, and perhaps some constructive
criticism, would help engage everybody in seeking a way out of this quagmire than
simply rant out preconceived opinions to get approval from fellow choir
members.
Labels: development, donor darlings, i am vikas, INGOs, NGOs
Saturday, June 9, 2012
Wise Economics: Development in Nepal
My latest article in Republica, published with the title "Wise Economics" on June 9th, deals with the hiccups in the development process in Nepal. The direct link to Republica's article is here. The unedited version is below.
Wise Economics
Economic growth in Nepal has not been across the board. Agriculture has
been languishing for decades. The Maoist conflict and lack of electricity
caused a further decline of agriculture, as well as manufacturing. Luckily,
education, construction and the newly rejuvenated banking sector have provided
a sense of normalcy and stability. However, there are still three basic hiccups
in the administration of development activities in Nepal.
First, our planning capacity is weak. There are many able and competent
planners at the national level. However, people with significant and competent
planning and implementation skills are in short-supply at the decentralized
level. Second, our fund flows are irregular. The central government allocates
funds for development, but it reaches the destination only after a few months.
In addition, funds vary drastically from one year to another, which confuses
the people working at the ground level.
Third, the absorptive capacity of development funds is very low. When
funds are distributed, there is a pre-condition attached with the fund,
especially regarding how and where it can be used. In some cases, funds are insufficient,
while in other instances, the funds could be in excess. In case of excess funds, such funds cannot be
diverted to other important causes due to the binding pre-condition attached
with the funds. Therefore, if the personnel at the ground feel that funds from
one program should be diverted to another more immediate need, they are unable
to do so. This causes the funds to go unused or distributed via corrupt
schemes.
While Nepal has made significant progress in defining and enforcing the
concept of property rights on public goods and resources, as is evidenced from
the success of community forestry, there are many areas where property rights
for environmental resources have not been well defined and enforced. Unused
land exist under the domain of the Nepal government in areas where famine and
hunger risks are persistent—for example, the far-west region. These should be
used in manners similar to community forestry so that people can use it for
income generation and food security purposes. Once that is successfully
implemented, the government should improve the transport infrastructure to
reduce the transaction costs of their produce or products. Increase in economic
activities and productions serve no purpose if access to market is difficult.
Speaking of economic activities, it has to be ensured that every player
in the market has equal odds of succeeding. One group of producers should not
be able to dominate the market and dictate the rules. Economists use the
Hirschman-Herfindahl Index to observe if any single producer or a group of
producers is unfairly dictating the terms in the market. For the Nepali
airlines industry, the “Hub and Spoke” observation could help us learn if
Buddha Airways, the largest airline in Nepal, is charging the highest price
simply due to the fact that it is the largest domestic airline. If this is
true, it hurts the consumers and the development process. Then, the government
needs to intervene.
However, government interventions are going to be trickier once Nepal gets
federalized. Some development concepts like Horizontal
equity rationale will continue to be discussed. It has greater appeal than
vertical equity because it ensures equity across different regions. In theory,
it ensures that equals are treated equally. However, even if federal states of
Nepal are considered equal by the constitution or any other mandate, it is
inevitable that some states will end up with richer endowment of natural or
other resources essential for development. Horizontal equity in that situation
is impossible although it is a desirable outcome.
Government interventions have to consider the resource argument, especially
because economic development rests on the shoulders of available resources. Residents
of Manang are killing residents from neighboring Gorkha district who came to
“steal” their yarchagumba. So, we cannot guarantee that violence over the
rights to a particular resource will not flare up when Nepal gets federalized.
In fact, it is only going to escalate. Despite these fights over natural
resources, development practitioners know that capital is the most important
resource because absence of capital renders other resources almost unusable.
On one hand, according to law of diminishing marginal returns, if
capital is taken to capital-deficit areas, i.e. poorer areas, the marginal
productivity of that capital will be higher than if it were invested in an
already prosperous area. This argument suggests that capital should go where
labor is abundant. An example of this is the miraculous growth of China where
favorable policies created by the government ensured that investors brought
their money and established factories because there was no shortage of cheap
labor in China.
On the other hand, poorer regions have low marginal as well as average
productivity. Therefore, moving capital and spending it in areas with low
productivity is wasteful because that capital could instead be used for
accomplishing significant economic growth in areas with higher productivity.
This argument suggests that labor should go where capital is abundant. The
movement of people from all over Nepal to urban areas and cities for jobs and
opportunities is an example.
However, this second economic thought overlooks the fact that urban
areas get larger and larger every passing year due to rural-urban migration to
capital rich areas. This phenomenon creates “urban giants” that often suffer
from stretched public service delivery scenarios where delivery of even
essential services becomes logistically a nightmare. Kathmandu has been suffering
from urban giantism for some time now. This approach to development is not
desirable.
Economies of agglomeration are useful in the sense that cities foster
economic growth due to proximity to jobs, labor, capital and infrastructure.
However, Nepali cities and urban areas are getting stretched to their
functioning limits. The right approach to development in Nepal is to take
capital to the rural and poorer areas where resources essential for economic
growth like land and labor are cheap and abundant.
Labels: development, economics, economy, federalism, urban giant
Tuesday, April 10, 2012
Development and Politics in Nepal
I had an article in Republica today. The direct link is here. The unedited version is below.
Development
and Politics in Nepal
The problem with developmental process in Nepal is this: it is mired in
politics. We in Nepal, involved in the developmental processes, have a hard
time realizing the fact that development should be an apolitical process. If we
wish to succeed, we need to separate the politics from the developmental
process. However, there is a noticeable feeling in the Nepali development community
that in order to achieve true and effective development in Nepal, the
bureaucratic and the political actors need to get involved in any and all
development processes. That, I think, is a fallacy that we continue to suffer
from to this day.
Development activities in Nepal will not succeed if the targeted group
knows that political actors are involved in the process—either as facilitators
or as decision makers. This is because the Nepali public has a genuine distrust
and loathing towards politics and politicians. And, this is where many
development organizations in Nepal have gone wrong. They have clearly been
affected by the political process and actors. Many openly cavort to those in
the political spectrum while at the same time claiming to be apolitical and
non-partisan to their core customers. When the public discovers this, it views
it as a charade and a façade. This negative vibe in the public, then, hinders
the effect and influence of such organizations. As a result, the desired
outcomes do not occur, and the developmental activities become ineffective and
a failure. This has become a common storyline among donor funded agencies
operating in Nepal today.
Now, it would be unfair to put 100 percent of the blame on these organizations
for this inability to separate the politics from development. I guess cavorting
and cohorting with politics is a survival strategy. Without active support and
participation of political parties and actors, these programs face greater
difficulty succeeding in Nepal regardless of the strength and/or capacity of
the program or the organization running that program. These organizations have
come to the brutal realization that in order to succeed in Nepal, the political
“connection” is a must. And, so, they do in Rome what Romans do: establish and
enhance political connections.
Unstable politics and government in Nepal is one reason why these
organizations cavort to the politicians. We have lost count of how many prime
ministers we have had since the democracy in 1990. We have lost count of how
many governments we have had. The constantly changing political and
governmental landscape makes it difficult for development organizations in
Nepal to carry on their activities if they do not establish political influence
and links. Therefore, the political connection and hobnobbing continues today while
claiming to be apolitical to the public, potential donors and funders.
The claim of being apolitical has been nothing but a tactic to provide
refuge and a safe working environment for their workers who work with the
public day in and day out all over Nepal. The hobnobbing with the politicians
has been nothing but a tactic to provide a safe bureaucratic and political
environment for continued presence in this country.
While it is understandable that these organizations have had to cater
to the masses as well as to those in the political spectrum for their existence
and continued work, it is also true that their political relationships diminish
their essence. Although they do not wish to acknowledge, it cannot be denied
that their increasing connection with those in politics has contributed to increased
corruption and abuses of power in Nepal. The closer ties of our politicians
with these organizations enable the politicians to think that their
interaction, participation and influence on these organizations will blanket
them from any or all criticisms. The development organizations in Nepal are
making their own work difficult by providing this sort of sense of security to
our political actors. Can we deny the fact that free money that the Maoist
party kept getting from various foreign donors, in one way or another, helped
develop the thuggish wing of the party? That is, but, only one example. The
hobnobbing has hindered political accountability.
Marina Liborakina, a Russian activist, once said, “As citizens, we are
responsible for how we are governed. The main issue is…to broaden citizens’
participation…especially in decision-making on crucial issues of security,
peace and military”. However, in today’s Nepal, this has not been possible. Activists
have a difficult time fulfilling their responsibilities because the kind of
support they expect from various organizations is lacking. And, the reason it
is lacking is because those involved in the developmental process in this
country have not separated themselves from politics.
Labels: development, politics
Thursday, January 19, 2012
Articles in Republica and Kathmandu Post
First, Republica has my article on how we can learn from China and grow. The title is "Model Watch". The first two paragraphs:
Chinese Prime Minister Wen Jiabao’s Nepal visit on Saturday made quite a lot of headlines in the Nepali national dailies. The constant newspaper reporting and the “curfews” imposed in various roads in Kathmandu were reminders of how important and heavyweight the Chinese premier, and ergo China, is considered in this part of the world. This rise in China’s importance, not just in South Asia but also in the global arena, is because of its unprecedented economic growth: China is the second largest economy in the world and is expected to overtake the United States by 2020.
What has pushed China from poverty to the second largest economy in a span of few decades? The question merits some explanations if we are to learn any lessons from China’s rise. Most importantly, we need to learn to adopt and implement the economic policies and programs that like that of China for our own economic growth.
Second, The Kathmandu Post has my article on the state-society relationship in Nepal. The title is "Relaxing the noose". The first paragraph:
There is this notion amongst intellectuals in Nepal debating the state-society relationship that a stronger state negatively affects the strength of civic society. The notion comes out of years of experience in the form of oppression from the hands of strong states. This is especially true in Nepal since oppression and repression were commonplace during the Rana rule and the Panchayat system. However, a stronger state need not always imply a weaker civic society.
Labels: china, development, federalism, Kathmandu Post, poverty, Republica, SSR
Wednesday, January 4, 2012
Development and Politics in Nepal
The problem with developmental process in Nepal is this: it is mired in
politics. We in Nepal, involved in the developmental processes, have a hard
time realizing the fact that development should be an apolitical process. If we
in the developmental arena wish to succeed, we need to separate the politics from
the developmental process. However, there is a noticeable feeling in the Nepali
development community that in order to achieve true and effective development
in Nepal, the bureaucratic and the political actors need to get involved in any
and all development processes. That, I think, is a fallacy that we continue to
suffer to this day.
Development activities in Nepal will not succeed if the targeted group
knows that political actors are involved in the process—either as facilitators
or as decision makers. This is because the Nepali public has a genuine distrust
and loathing towards politics and politicians. And, this is where many I/NGOs
in Nepal have gone wrong. They have clearly been affected by the political
process and actors. Many openly cavort to those in the political spectrum while
at the same time claiming to be apolitical and non-partisan to their core
customers. When the public discovers this, it views it as a charade and a
façade. This negative vibe in the public, then, hinders the effect and influence
of such I/NGOs. As a result, the desired outcomes do not occur, and the
developmental activities become ineffective and a failure. This has become a common
storyline among donor funded agencies operating in Nepal today.
Now, it would be unfair to put 100 percent of the blame on these organizations
for this inability to separate the politics from development. My guess is that
the cavorting and cohort-ing with politics is a survival strategy. Without
active support and participation of political parties and actors, these programs
face greater difficulty succeeding in Nepal regardless of the strength and/or
capacity of the program or the organization running that program. These organizations
have come to the brutal realization that in order to succeed in Nepal, the
political “connection” is a must. And, so, they do in Rome what Romans do:
establish and enhance political connections.
Unstable politics and government in Nepal is one reason why these
organizations cavort to the politicians. We have lost count of how many prime
ministers we have had since the democracy in 1990. We have lost count of how
many governments we have had. The constantly changing political and
governmental landscape makes it difficult for development organizations in
Nepal to carry on their activities if they do not establish political influence
and links. Therefore, the political connection and hobnobbing continues today while
claiming to be apolitical to the public, potential donors and funders.
The claim of being apolitical has been nothing but a tactic to provide
refuge and a safe working environment for their workers who work with the
public day in and day out all over Nepal. The hobnobbing with the politicians
has been nothing but a tactic to provide a safe bureaucratic and political
environment for continued presence in this country.
While it is understandable that these organizations have had to cater
to the masses as well as to those in the political spectrum for their existence
and continued work, it is also true that their political relationships diminish
their essence. Although they do not wish to acknowledge, it cannot be denied
that their increasing connection with those in politics has contributed to increased
corruption and abuses of power in Nepal. The closer ties of our politicians
with these organizations enable the politicians to think that their
interaction, participation and influence on these organizations will blanket
them from any or all criticisms. The I/NGOs in Nepal are making their own work
difficult by providing this sort of sense of security to our political actors.
Can we deny the fact that free money that the Maoist party kept getting from
various foreign donors, in one way or another, helped develop the thuggish wing
of the party? That is, but, only one example. The hobnobbing has hindered
political accountability.
Marina Liborakina, a Russian activist, once said: “As citizens, we are
responsible for how we are governed. The main issue is…to broaden citizens’
participation…especially in decision-making on crucial issues of security,
peace and military”. However, in today’s Nepal, this is not possible. Activists
have a difficult time fulfilling their responsibilities because the kind of
support they expect from various I/NGOs is lacking. And, the reason it is
lacking is because those involved in the developmental process in this country
have not separated themselves from politics.
(Copyright) Mukesh Khanal
Labels: development, INGOs, NGOs
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