THE WORLD BANK AND NGOs: NEW APPROACHES Remarks By Moeen A. Qureshi Senior Vice President, Operations The World Bank before the Washington Chapter of the Society for International Development Conference on "Learning from the Grassroots" Washington, D.C. April 22, 1988 Some people think that the World Bank's attitude toward nongovernmental organizations has been like that of the rich man who was interrupted in church. The rich man was praying quietly: "Oh, Almighty God, I am having trouble with my business. Please help me make a million dollars." But then a poor man in the back of the church started crying and wailing and shouting out: "Dear God, my children are hungry and I have no money for food. Please give me ten dollars." Finally, the rich man couldn't stand it anymore. He went back to the poor man, took a $10 note out of his pocket, held it out to him and said: "Stop it, stop your praying! Take the ten dollars and don't distract the Almighty. I need his full attention." I am here today to say that the World Bank does not consider NGOs a distraction. We consider NGOs important coworkers with us in a conunon cause. In particular, they can help us "learn from the grassroots." The World Bank and NGOs are both dedicated to the same ends -- to help developing countries realize their potential and, most basically, to help poor people overcome their poverty. I want first to give you my assessment of global efforts against poverty. It is in that context that I will talk about NGOs and about collaboration between NGOs and the Bank. My central message is simply that the Bank and NGOs can and must work together. Both governmental and nongovernmental development efforts have had shortcomings as well as successes. Our progress against poverty, after 40 years of international development effort, has been disappointing. Some developing countries have substantially reduced poverty within their borders, and virtually all countries have at least made gains in education and health for poor people. But the 1980s have been a terribly difficult decade for the developing world, and tens of millions of poor people have grown poorer. Adverse conditions in the global economy have slowed growth in even the most dynamic, well-managed developing economies. Weaker and less efficient economies went into a tailspin. Economic growth, by itself, is no guarantee of progress against poverty, but economic decline such as most of Africa and Latin America have seen spells suffering all around, for poor people most of all. - 2 - At the same time, lessons have been coming in from past efforts to reduce poverty. In reviewing the World Bank's experience with direct efforts to reduce poverty since the mid-1970s, we conclude that the Bank's basic strategies have been sound. Small-scale agriculture is indeed the front line of the fight against rural poverty. Investments in human resources -- in health, literacy, in managing population growth -- yield high returns. And approaches we advocated are helping many countries to cope with urbanization. But hindsight, that great clarifier, has shown that some of the Bank's poverty-oriented projects were islands of intended equity too small to counteract larger biases against the poor. It is right to build rural roads and develop extension services, but those investments do not pay full returns unless we also lift unfair ceilings on farm prices. Then, too, some projects suffered implementation problems. In part, we overestimated what governments could do. Many integrated rural development projects overtaxed the capacity of public administration, especially in Africa. If we are to succeed in overcoming mass poverty, three fundamental changes are needed. The first -- and responsibility here lies primarily with the developed countries -- is to make the global economic climate once again right for sustainable development. Second, the developing countries must pursue economic policies that encourage economic growth and progress against poverty. This decade's distress has exposed serious inefficiencies in the developing countries. As they work to recover from crisis, many countries are mounting systematic attacks on price distortions, bloated public sector spending and other impediments to development. Increasingly, these adjustment efforts include measures to protect the efforts of poor people to meet their basic needs. The third necessary change is to make programs which are supposed to help the poor become more effective. All three of these changes call for fresh connnitment and creative approaches, including new forms of partnership between governmental institutions and the vigorous legions of nongovernmental organizations. In recent years, NGOs have been multiplying and expanding. In many developing countries, the poor themselves are better organized now than they were 15 years ago when the Bank began to work directly on poverty problems. In neighborhood associations, women's groups, religious groups, environmental organizations, farmers' organizations and cooperatives, women and men have joined hands to shape their own futures. Growing networks of regional and national NGOs bring the strength of numbers to these grassroots groups. Confederations of the local groups, national voluntary organizations and think tanks on social issues are mobilizing new resolve and imagination. - 3 - As of 1985, NGOs based in the industrial countries transferred an estimated $4.4 billion a year to the developing countries. That sum outdistances IDA, the World Bank's concessional affiliate, and its size reflects the rising influence that NGOs have in shaping public opinion and public policy on international development. Despite their impressive growth, NGOs still reach only a fraction of the world's poor people. Some NGOs have technical and managerial limitations. NGOs are not involved or knowledgeable about some important aspects of development. But a number of developing-country governments are showing increased interest in NGOs. Where public purses are lean and social needs are high, officials may look to NGOs for help. In some cases, governments have cut back on public services and then asked NGOs to fill the gap. But NGOs are seldom able to carry out social programs on the necessary scale. In such situations, they often become voices of protest, urging that the budget ax fall not on the poor but elsewhere. Where governments are maintaining past levels of expenditure on poverty programs, some want to channel the resources through NGOs to enhance cost-effectiveness. In the Philippines, for example, officials in the health sector are trying to learn from NGO experience and work in partnership with community health services. In still other instances -- and these are the most promising governments are encouraging NGOs to help poor people organize to make public bureaucracies more responsive. This is the stated policy of the Government of I~dia, for example. If this departure from the past is to become a practical reality, it will require far-reaching changes in attitude and practice among civil servants. It will also require a change in orientation for many voluntary organizations in India. Some NGOs in the developing countries are strengthening their capacity to analyze issues of economic policy and to speak for the poor in public debate. And the resurgence of democracy in parts of the developing world has made some governments more responsive to NGO views. NGOs based in the industrial countries are also changing. In the past, they focused much of their public information and lobbying activity on fund-raising. But partly at the urging of their Third-World colleagues, many industrial-country groups are becoming more active in development education. They are extending their lobbying activities to broader development issues, such as international debt, trade and the environment. Appropriately, in our age of interdependence and rapid information exchange, international NGO networks that were forged to channel assistance to developing nations are beginning to channel information back to the industrial countries. The insights carried on these people-to-people links bring grassroots experience to the public at large and to decision makers who often need such alternative, open channels. - 4 - What NGOs report back to the industrial countries sometimes differs from what official development agencies have to say. An institution like the World Bank tends to focus on large-scale, often official aspects of development, such as trade policy, adjustment programs and major public investments. NGOs focus instead on self-help projects and the struggles of organizations of poor people. From different experiences and perspectives, we get contrasting and even contradictory messages about what needs to be done to make progress against poverty. ********** What matters is how those inputs affect outlook, and what I want to do now is describe the World Bank's changing view of its relations with nongovernmental organizations. Over the last decade or so, the Bank has come into increasing contact with NGOs. We met together in many settings, and some NGOs became involved in Bank-financed operations. But our dealings remained sporadic and ad hoc. In just the last few years, NGO influence on Bank policies has grown. Some NGOs joined with UNICEF and other international agencies in expressing concern that IMF- and Bank-supported adjustment programs in the early 1980s did not adequately attend to poverty concerns. Environmental NGOs have helped us become more keenly aware of natural resource and resettlement issues. I am grateful to them for that, even though their criticism has sometimes been excessively harsh. Now we are taking the next step -- from listening to NGOs to working with them. I am delighted that most industrial-country NGOs are advising us to give priority to working with developing-country NGOs. That is the message we hear from the World Bank-NGO Committee and from environmental activists. They are telling us that more involvement by grassroots NGOs in o~r operations will improve the Bank's impact on both poverty and environmental aspects of development. And their advice squares with our own experience. It is part of our emerging practice. Barber Conable, our president, highlighted NGOs in his speech to our Annual Meetings last September. Shortly thereafter, I initiated a Bank-wide exercise to identify specific countries, sectors and projects in which to pursue a major expansion of NGO involvement in our operations. The cultural and political significance of NGOs varies from country to country, and the Bank's involvement with them anywhere will depend heavily on the government's policy toward such groups. Encourag- ingly, our staff report that many governments are reasonably positive about NGO involvement in public programs. - 5 - We will soon be releasing a list of about 150 upcoming operations in which the Bank's staff are considering NGO involvement. About half of these planned operations are in Africa; the others are distributed through- out Asia, Latin America, and to a lesser extent, the Middle East. In most cases, the Bank is expecting to work with developing-country NGOs, but there are also many situations where it would make sense for industrial- country groups to take part. These planned operations include a wide range of activities of direct benefit to the poor, from agriculture to microenterprise develop- ment. In many cases, a developing-country government would support NGOs in providing social services. I have asked our staff to look for more situations where NGOs could help us elicit the participation of poor people in planning public projects and policies. We intend to pay special attention to the quality of these partnership arrangements. We must take care that the Bank not overwhelm small NGOs with too much money or too ambitious a role. In an experimental effort in Togo, World Bank funding for NGOs aggravated tensions among the voluntary groups. And we do not want official interest in NGOs to lead to overregulation of their activities. I realize that NGOs have other important work to do. Many will not want to work with the World Bank or the projects we support. But the collaboration we offer cannot achieve quality results without the active, creative and critical involvement of many NGOs. The doors of our headquarters and of our resident missions around the world are open. We hope new partners for development, new allies against poverty, will come to see us, even as Bank staff work to seek them out. We are grateful to those who are already working with us and pleased that some of the developing-country NGOs on the Bank-NGO Conunittee are organizing regional or national NGO consultations with the Bank. A group of Caribbean NGOs has proposed a meeting on debt and adjustment. They will be setting the agenda. Taking the initiative, they make it more likely that the World Bank will be listening, rather than preaching, to the grassroots. A few NGOs have been working for some years, with great sophistication, to improve the quality of international development assistance. I appreciate what they have achieved. As late as ten years ago, what we knew about World Bank operations in many countries depended mainly on bureaucratic lines of information and supervision. Within developing-country governments, implementing agencies reported on what they were doing, and country authorities tried to maintain quality control. The Bank supervised the projects it financed, but within the Bank, too, we depended on bureaucratic lines of management. - 6 - In today's global village, NGO networks can report a problem in rural Northeast Brazil to Sao Paolo, to Brasilia and throughout the world within a week. Where bureaucratic eyes are astigmatic, NGOs provide vivid images of what is really happening at the grassroots. ******** Translating these messages into action, into help for poor people, is the purpose of the Bank, of the NGOs and of the teamwork we can achieve. We have to use it to address the three poverty challenges I outlined earlier. First, to eliminate mass poverty we will need supportive policies in the industrial countries. These will necessarily include substantial programs of official finance. But people in the industrial countries will not support such programs if NGOs they trust -- church or environmental groups, for example -- tell them that official development efforts are hopelessly ineffective or sometimes even harmful to the poor. Within the Bank and other international agencies, we need to encourage systematic feedback from the grassroots and follow-up action. And if NGOs collaborate with official agencies to improve the quality of aid, I suspect that NGOs will also learn in the process. They may become more candid about their own limitations, more appreciative of the importance and difficulty of what developing-country governments do and more knowledgeable about international trade and finance. There will be points of controversy between intergovernmental and nongovernmental organizations, but we should be able to speak with less discord on certain basic issues of international policy. Second, renewed progress against poverty depends on sensitive and successful adjustment programs in the developing countries. NGOs at the grassroots are dealing first-hand with some of the low-income families who have lost jobs or government services due to economic malfunction at the global and national levels. Some NGOs can give policymakers important insights about the effect adjustment policies have on poor people and suggest alternatives. When a government wants NGOs to help implement social components of an adjustment program, such economic policy discussions become especially important. NGOs which grapple with adjustment issues may come to recognize that many of the policy reforms that are important for economic efficiency also serve the cause of equity. Price discrimination against agriculture did not come about by chance; it serves the interests of relatively well- off urban groups at the expense of less powerful, poorer rural areas. Wasteful parastatal companies have gone uncurbed, partly because they provide jobs to thousands of politically influential city dwellers. - 7 - It is often such relatively well-off people who protest most vocally against adjustment measures. As NGOs deepen their engagement on broad issues of economic policy, they could help to reduce the bias against the poor which has often been built into pricing policy, tax policy and patterns of public expenditure. Finally, in order to renew progress against poverty, we need to make public programs that promise to benefit the poor actually deliver. The Bank's experience, documented by our Operations Evaluation Department, is that strong organizations of poor people often help public programs respond to the real needs of the poor. With public participation, programs are also more likely to keep working after the Bank's involvement ends. Many NGOs are becoming dissatisfied with small projects and putting more energy into building organizations of the poor. So we are nearing a promising convergence. Working together, the Bank and NGOs may be able to empower poor people themselves to help make government services more efficient and effective. Let me close with a specific example, one which Sheldon Annis at the Overseas Development Council has reported. The Mexico City earthquake of 1985 struck the center of the capital, including a large zone of overcrowded low-income housing. Virtually all the residential areas of Mexico City have neighborhood organizations, and these groups came alive after the earthquake. They resisted moves by landlords and officials to evict tenants or replace low-income housing with other types of construction. Neighborhood organizations also began to build some housing on their own, sometimes with credit or other assistance from official sources. Thirty neighborhood associations, including 25,000 families, joined forces in a confederation. The government's reconstruction program, which the World Bank supported, was largely successful, partly because grassroots groups played an active role in shaping it. ******** In this case, as in so many others, the World Bank and NGOs indeed find themselves in the same parish. We have learned that the conmotion at the back of the church is an essential part of the development process. And NGOs may be learning that the World Bank is not as rich, nor as self- serving, as some may have imagined. The World Bank and NGOs are quite different. And precisely because we are so different, we have a lot to learn from each other -- at the global level, at the national level and at the grassroots level. - 8 - By working together, the Bank and NGOs will both be more effective forces in the world's gathering effort to eliminate mass poverty. Let us act in common on the urgings of Teilhard de Chardin. "The age of nations is past," he asserted. "It remains for us now, if we do not wish to perish, to set aside the ancient prejudices and build the earth."