The Role NGOs Play in Poverty in Developing Countries - Essay Example

Table of Contents Poverty Reduction Strategies 3 Analysis 4 Role of NGOs in Eradicating Poverty 4 Challenges encountered by NGOs 6 Case Studies 7 Conclusions 9 References: 11 Introduction:- Poverty reduction or poverty alleviation refers to any process that attempts to reduce the number of people living on and below the poverty line in a given community or country. Reduction of poverty in the developing countries has gained the greatest priority with the governments of these countries while designing reforms for economic growth. The greatest hurdle in the progress of any country’s economy is poverty. In fact the impact of poverty has led to a wide difference between the developed and developing countries. The ill effects of poverty are more intense in the developing countries. These countries are always marked with characteristics like low labor productivity, high rate of unemployment and technical backwardness, all of which hamper the economic growth significantly. The presence of poverty adds to these factors and makes the economic scenario worse for the developing nations. Thus one of the essential reforms in the developing nations is reducing the level of poverty. Strategies for poverty reduction in a country include the various macroeconomic policies and social programmes that help in reducing poverty and stimulating economic growth. The social and structural programmes for reducing poverty in developing countries are designed after analysing the multidimensional effects of poverty. The ultimate objective of these policies is raising the quality of life of the poor. Generally such policies are associated with a deep involvement of the civil society. The civil society’s participation in the policies promotes the national ownership of the poverty reduction strategies. Poverty is a deep-rooted problem for any nation. Hence the strategies taken for its eradication also involve a long time horizon. This is the reason for the long-term perspective of poverty reduction strategies (Poverty Reduction Strategy Papers, 2008). Poverty Reduction Strategies Various strategies are followed for poverty eradication in developing nations. The most popular among them is Ownership strategy. One of the most significant factors that contribute to the problem of poverty is the unequal distribution of economic resources, since this unequal distribution denies the access of economic resources to the poor. The ownership strategy of poverty reduction aims at an appropriate distribution of economic resources in the developing countries. The strategy of sustainable development also helps to eradicate poverty. Sustainable development refers to the development of a nation which can meet the needs of the present generation without hampering the future generation’s ability to meet its own requirements. This concept of sustainability has been used to address the issue of poverty in several developing nations. But this concept has not been seamlessly accepted throughout the economic and social science schools of the world (Sustainable Development: Implications for World Peace, n.d.). The most popular poverty eradication strategy of recent times is the building of natural assets. The idea behind this strategy rests on the fact that reducing poverty helps in securing the natural environment of a nation. As economic and political leverage has penetrated the low-income communities, they are able to take proper care of the environment and protect it from any kind of damage or harm. Analysis Role of NGOs in Eradicating Poverty The developing countries have taken to the task of poverty reduction with utmost sincerity. This is the reason that major steps for the eradication of poverty are being taken by the International Non-Government Organisations in the recent times. The potential role of NGOs in eradicating poverty was realised in the year 2000. In 2000, the United Nations Millennium Goals (MDGs) was signed, in order to significantly reduce poverty levels. According to the terms declared in MDG the UN members decided to reduce by half the number of people surviving on less than a dollar per day, by the end of 2015. Such an ambitious target to reduce hunger and poverty, called for the need of assistance beyond the government and private sector. It was at this point of time that the role of NGOs in eradicating poverty was fully realized. The contemporary economic and social situation in Indonesia and India has made poverty one of the greatest challenges confronting the developing nations. It is extremely necessary for the developing nations to achieve the target fixed by United Nation. And to achieve this fixed target the initiative taken by the NGOs is indispensible. In fact the significance of the NGOs can be found in the past as well. After the Second World War NGOs rendered services in various forms for the purpose of eradicating poverty. They were engaged in emergency services, relief and long-term development projects for poverty reduction. NGOs have always shown an institutional capacity for any kind of social causes. There are several advantages of NGO service compared to the service rendered by the government. The NGOs possess the ability to provide emergency assistance and relief at a significantly low cost. They also have the potential to render their services in remote areas and to a huge number of people. The responses by NGOs are always much more flexible and quicker than that of the government. The projects done by NGOs for poverty alleviation are also comparatively more innovative and prove more effective as they offer help at the grass root level. One of the prime reasons for better service by the NGOs is their long-standing familiarity with the development in the social sector and poverty reduction. The experience of NGOs gives them a better understanding of the small-scale development missions. These supply-side approaches of NGOs are also coupled with demand-side approaches. In the demand-side approach NGOs act as the voice of the people. In this approach they clarify the needs of the poor and demand services from the market and the government. Both these approaches are visible and used by the NGOs of any developing nation. The role of the private sector is also apparent in poverty reduction. The business organisations have taken several income-generating ventures for the poor. An enormous business organisation is always backed with huge capital which is the reason that they have less fear of risks while undertaking such ventures. In case of business organisations large-scale development has been noticed in remote villages. The developments are in terms of improved environmental conditions, assistance in spreading education and the development of villages. But the difference between the private sectors services and NGOs lies in the objective oriented nature of the business organisations. Every business organisation is driven with the objective of profit-making. Hence the social responsibilities taken by such organisations will locate such areas where the organisation will have lesser risks. But in case of an NGO the social commitments are undertaken with the sole objective of poverty reduction, irrespective of the degree of assistance required to improve the living standards of the people. Challenges encountered by NGOs The services of NGOs are hindered from the very initiation of any project. The possession of financial support is one of the greatest challenges for all NGOs. While making an attempt to improve the standards of slum or village dwellers, NGOs often find the scarcity of financial assistance. Generally, the prime source of the financial support of the NGOs is charity. Thus, financing a project on the basis of charity becomes cumbersome. The long-term plans for a poverty reduction project cannot be achieved if the financing solely depends on charity. Thus, it becomes imperative for the NGOs to take the assistance from the government and private sectors. This brings in the challenge of linkage building. The NGOs are required to build strong linkages between the local institutions and the development agencies. This task requires them to promote the local institutions at the grass-root level with the political structures at the highest level. A successful linkage can bring the synergy in the poverty reduction programmes. The other challenge that is often encountered by the NGOs is expanding the scale of the programmes. This scaling-up of the programme intervention is of utmost necessity because it can address all the associated evils that mushroom for poverty. Without scaling-up, the benefits of the reduction programmes become confined to a specific area of its operation. This eventually becomes worthless in a wide economic environment. The toughest responsibility of the NGOs is to bring together the assistance from government and the business sectors to make poverty reduction programmes a great success. Performing this job faces the constraints of rigid political framework. This is the greatest hindrance for the NGOs while undertaking the social programmes. Case Studies The services offered by NGOs for the eradication of poverty have been very intense in the recent years. Some of the works of NGOs have been remarkable in the developing countries. In Indonesia, the poverty reduction through NGOs has been most successful compared to the initiatives taken by government and business sector. In this nation, the number of NGOs began to increase after the fall of New Order in 1998. After the economic crisis hit Indonesia, a group of 27NGOs initiated the Community Recovery Programme. The programme gained enormous co-operation from the civil society and was funded by foreign donors. Community based organisations and local NGOs were created up in different parts of Indonesia for large-scale community development. In the end, the final report in 2006 reported its enormous impact on social, gender and economic policy issues of Indonesia. The positive values imparted by CRP penetrated to the grass-root level of the poor communities. The NGO Bina Swadaya, in Indonesia, has shown remarkable performance in poverty eradication. There were two prime activities of this NGO. The first activity was to empower the poor community which was done by building up training centers, imparting education and establishing consultancy institutions for the poor. The second activity was to provide financial assistance to the deprived community through microfinance. This was done successfully through building up of a strong relation between the poor and the leading financial institutions to finance the small businesses. In India, the poverty reduction programmes have also been boosted after the involvement of NGOs. Surveys have revealed that in rural areas of India, 15,000 – 20,000 NGOs operated during 1990s. The activities that are endorsed by the Indian NGOs are mostly the promotion of education and health standards. In India, the NGOs are also involved in economic activities among the low-income groups. This activity has had a great impact on the elevation of the standard of living of the poor to a greater extent. In India, the Gram Vikas NGO has worked in Orissa since 1979. Gram Vikas created Young Students Movement for Development (YSMD) to bring about social changes at the regional as well as the national level. The NGO started the (YSMD) with employee strength of 224. Additional help from 400 volunteers also helped to pace up the objectives of the programme. The objective of Gram Vikas was to help the poor become self-reliant. They categorised the people of the community as ‘the haves’ and ‘the have-nots’, and worked to make ‘the have-nots’ transform in to ‘the haves’. The programme started with a focus on 1 % of the population in Orissa. By introducing a series of development programmes, this NGO has made an immense contribution to the reduction of poverty (The Roles of NGOs in Rural Poverty Reduction: The Case of Indonesia and India, 2007). One of the most remarkable works done by the NGOs in eradicating poverty has been observed in Bangladesh. The Micro-credit programmes undertaken by the NGOs in rural areas of Bangladesh became the most powerful means of eradicating poverty. The programme achieved a grand success by financing the small-scale businesses that had been started by the villagers. The micro-credit programmes turned out to be the ‘engine’ of development for the process of rural growth in Bangladesh. Gramin Banks in Bangladesh are the basis of this programme, which began an experiment of 3 years in financing the villagers. The successful experiment brought about the extension in the programme which attained a grand success eventually. Conclusions From the above analysis the positive effects of NGOs in reducing poverty becomes visible. The NGOs in all developing countries have great achievements only when they are financed in a sound and consistent manner. The success of the services rendered by NGOs depends on the planning of the programme and on its financing. In Bangladesh, the planning of the programme had played a crucial role in making the programme successful. At the same time the proper financial support has helped the programmes to become successful. Since NGOs solely rely on charity for the financial support, in many cases the poverty reduction programmes are discontinued. In order to improve this government assistance and the assistance from business houses are necessary. There should be a proper tie-up with the financial institutions for making these programmes achieve their targets. References: Poverty Reduction Strategy Papers, 2008, International Monetary Fund, [Online] Available: http://www.imf.org/external/np/exr/facts/prsp.htm [11th May 2009] Sustainable Development: Implications for World Peace, n.d., University of Texas, [Online] Available: http://www.utexas.edu/courses/sustdevt/conceptual.html [11th May 2009] The Roles of NGOs in Rural Poverty Reduction: The Case of Indonesia and India, 2007, Page 16, [Online] Available: http://www.gsid.nagoyau.ac.jp/bpub/research/public/paper/article/160.pdf [11th May 2009] Bibliography: Ahsan A.H.M.K., 2005, Role of NGOs Micro-Credit Programme in Poverty Reduction in Bangladesh, [Online] Available: http://www.medwelljournals.com/fulltext/pjss/2005/1053-1059.pdf [11th May 2009] Baruah B, 2007, Assessment of public–private–NGO partnerships: Water and sanitation services in slums, [Online] Available: http://www.csulb.edu/~bbaruah/documents/narf_153.pdf [11th May 2009] Boyce J.K. and Pastor M., 2001, Building Natural Assets, Political Economy Research Institute, [Online] Available: http://www2.ucsc.edu/cjtc/docs/RR3.pdf [11th May 2009] Viravaidya M., n.d., The Privatization of Poverty Alleviation, [Online] Available: http://www.adb.org/Documents/Books/Defining_Agenda_Poverty_Reduction/Vol_1/chapter_14.pdf [11th May 2009] Sparr P. and Moser C., International NGOs and Poverty Reduction Strategies: The Contribution of an Asset-based Approach, The Brookings Institution, [Online] Available: http://www3.brookings.edu/views/papers/200707moser.pdf [11th May 2009] Bamberger M. et al, 1996, The design and management of poverty reduction programs and projects in Anglophone Africa: proceedings of a seminar sponsored jointly by the Economic Development Institute of the World Bank and the Uganda Management Institute, World Bank Publications, ISBN 0821327674, 9780821327678 Poverty reduction and the World Bank: progress in fiscal 1999, World Bank Publications, ISBN 0821347071, 9780821347072 Read More