Faults in foreigners

  • If donors are serious about their anti-corruption efforts, they should first conduct an appraisal into their own situation
- Narayan Manandhar
Faults in foreigners

Jan 7, 2015-

On December 9, International Anti-Corruption Day, some donors in Nepal—now conveniently called ‘international development partners’—pledged to work with concerned stakeholders to fight corruption. Issuing a joint statement, they called for a partnership between civil society, private sector, the international community, and the government to address the challenges of corruption, which has been hampering development and poverty alleviation in the country. “A stronger partnership among different stakeholders will make it possible to tackle the issue in a more coordinated, comprehensive and coherent manner,” read the statement.

I will leave the matter to readers to judge how the proposed three Cs—coordinated, comprehensive and coherent—approach will be addressed in the days to come. Ironically, on the same day, some uncoordinated and incoherent moves could be easily observed. In the morning, the Commission for the Investigation of Abuse of Authority (CIAA), along with the local chapter of Transparency International, were busy marking the Anti-Corruption Day with a clarion call to end corruption. This scribe was informed that politicians and members of the parliamentary oversight committees were not invited to mark the occasion. In the afternoon, the Prime Minister’s Office was busy making commitments to strengthen government oversight agencies to fight corruption. The CIAA Chief was not invited to that event.

Now, there is tension brewing between the Asian Development Bank, the Ministry of Energy, and the CIAA over the appointment of consultants for the construction of the 140MW Tanahun Hydel Project. Reportedly, donors have threatened to pull out of the project.

Aid effectiveness

Last October, the Independent Commission for Aid Impact (ICAI) released a report on the aid effectiveness of the UK’s Department for International Development (DfID) in fighting corruption, focussing on results from Nigeria and Nepal. ICAI had this to say about Nepal: “Disappointingly, we found that at least one programme supported by DfID appears to have increased the opportunities for corruption in society. Instances, (like these) raise concerns that the general principle that aid should first ‘do no harm’ has been breached. ” The Report made another interesting observation: “We also saw instances of a hesitancy to react to changes in circumstances. In Nepal, for example, over a year after a head was appointed to one of the anti-corruption agencies (read CIAA), DfID was still considering the extent to which they would engage with that institution. In our view, Dfid should have moved more quickly to assess fully this development and whether significant support should have been provided to the agency.”

The research report also contained an interesting observation on the effectiveness of the much-touted World Bank’s social accountability project called PRAN (Program on Accountability in Nepal). The citizen survey organised for the study revealed non-PRAN districts (control group) to be much more aware of their rights as against PRAN operated districts (experimental group). That must be the reason why 50 percent of respondents said “corruption in government bodies [was] getting worse” in Nepal. By the way, as the PRAN acronym stands for life or soul in the Nepali language, let us all hope the spirit of PRAN has not died within the Big Bank.

Look within

In this newspaper (‘Deliberate deception,’ April 10, 2010), this scribe had raised an issue: how a facility designed to combat corruption and strengthen social accountability at the local level (Local Governance and Accountability Facility, or LGAF) created within the multi-million dollar Local Government Community Development Program (LGCDP) was being commissioned haphazardly. In response to my complaint, one of the donor embassies called for a meeting and informed me that “I was simply making a mountain out of a molehill”. Now, I request that the concerned officials read the ICAI report carefully. By the way, NGOs used to dub LGAF ‘Saatlakhe project’—that is, the amount (Rs 700,000) it used to disburse to the NGOs to run programmes.

If donors are serious about their anti-corruption efforts, they should first conduct an appraisal of their own situation. Are they behaving in a way commensurate with their anti-corruption goals? A large portion of NGO corruption can be conveniently ascribed to donor policies and more importantly, their discrete and irrational practices. The single reason why NGOs are so vulnerable to corruption is their funding practices. Donors have a ‘one-way traffic’-like funding programme. That is, their funding mechanisms are basically designed to disburse funds, not collect them when the funds remain unspent. This makes NGOs susceptible to corruption. Remember, in the government bureaucracy, a large portion of funds is disbursed at the third trimester, thereby pushing recipients to over-spend the money to meet financial targets at the end of the fiscal year. There is a similar tendency with donor funding.

There are many other key areas of donors’ vulnerability to corrupt practices. These extend from the practice of calling bids for project proposals to staff recruitment to accounting and auditing systems. Recently, an embassy made a call for project proposals to review donors’ engagement in the anti-corruption drive in Nepal through its website. However, they extended the deadline for proposal submission without notifying the earlier applicants. Such corrupt and irrational practices are routine among donors in Nepal. The Public Expenditure and Financial Accountability study in 2008 found that less than 50 percent of donors’ money is accounted for in national accounts. That is to say, more than 50 percent is off-budget allocations. This gives an indication of the scale of donors’ vulnerability to corruption.

Inferiority complex

Furthermore, donors employ two categories of staff members—expatriates and Nepalis. If expatriates have their own eccentricities, their Nepali counterparts carry a superiority-inferiority complex. Because of their low status, low wage payments (compared to expats) they are basically made to feel inferior when it comes to dealing with expats. They try to rationalise this inferiority complex by exhibiting a superiority complex with their Nepali counterparts. Anyone visiting donor agencies can get an immediate grasp of this complex just by observing the behaviour of security guards posed at the entrance. This superiority-inferiority double standard behaviour may not have any monetary ramifications but is definitely a corrupt behaviour on its own.

A proposal is underway, now, as part of meeting Nepal’s United Nations Convention Against Corruption obligations, to amend anti-corruption laws. The amendment is expected to bring foreign public officials and international public officials (INGOs and multi-lateral agencies) under the fold of Nepal’s anti-graft agency. It can be expected that the proposeOli-Madhesis standoff derails ‘crucial’ meetingd amendment will to some extent help control donors’ corruption and corruption in donor-funded projects.

Manandhar is a freelance consultant with an interest in corruption and governance

Published: 08-01-2015 09:22

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