Insensitive Government, Conflicting Donor Agenda, and Emergent NGO Initiatives at the Grassroots

Bihari Krishna Shrestha, Nepal scholar

An LDO in one of those districts, when queried about the rationale for accepting to employ them, said that they certainly did not have to pay for these facilities. But when it comes to the condition of the DDC having to take them over fully after two years, he is not so sure if that would actually happen. Their present stance in accepting the UNDP offer has been to take it “for as long as it lasts”. It will be certainly interesting to see how a district like Gorkha, with its own income of only around one hundred thousand rupees a year, would react to having to shoulder such a responsibility that would require them to cough up several hundred thousand rupees a year just for paying salary to this extra staff.

UNDP’s Project on Institutional Development at the Grassroots for Poverty Alleviation (RAS/94/500): 

The project is being implemented in two VDCs namely Arjun Chaupari and Sri Krishna Gandaki (SKG) of Syangja district with the objectives of demonstrating “the effectiveness of social mobilization for: I) rapid scaling up of poverty alleviation efforts and II) improved participatory development planning” (UNDP, 1995:1).

The project has since been extended to four more VDCs after February 1996. The project has been represented as being so successful that a member of the National Planning Commission found it fit to escort a large group of Nepal-based diplomats to visit it last year. The visit also provided the opportunity for the Syangja DDC President to plead for the district-wise expansion of the intervention.

The project consists of several interventions namely “organization development, capital generation, skill enhancement, (and)….Investment in organization” (Ibid). One of its activities has been the formation of savings groups of local people irrespective of “caste/ethnicity or level of affluence or gender” who were encouraged to save as much as they could every month. For instance, in Sri Krishna Gandaki, there were 36 such groups in the VDC that included 1100 of the 1300 households in the VDC. The members save every week according to their individual abilities. In one group of 58 members, representing 24 households in the village, one saved 200 rupees one week and 50 rupees the week before, but none saved less than 5 rupees a week. The group’s total saving was 43,220 in which the particular member’s share alone was 4000 rupees. The savings rate has remained quite high. In SKG VDC alone, the total amount of saving between October 1994 to June 1995 has been as high as 411 thousand rupees (Ibid: 12). The project has successfully discouraged drinking, gambling and even smoking to some extent. Monthly workshops are held in the VDC which are attended by the group presidents and managers and other local relevant people as well as the UNDP-appointed professional staff of the project.

The loans are collateral-free and are made out through the members’ decision mostly for productive purposes with an interest rate of 2 percent per month. In addition, the Project lent large sums of money. In one instance, 180,000 rupees was given to one group of over 40 members in SKG VDC for enabling 9 of them to buy one Jersey cow each for 20,000 per cow. The loans are payble in 12 monthly installments. The 16 percent interest on project loans are repatriated to the groups and according to the understanding of the local people, 4 percent of it is paid to the group manager, 2 to the president, 2 for the “helpless” and 8 to be retained by the group itself. In addition to the project-sponsored community-managed livestock insurance scheme, the people are looking forward to major successes in horticultural development which they see as the only hope for alleviating the poverty of the people, most of whom suffer from food deficit conditions lasting over six months in a year. The local people have been assured by the UNDP Project the latter would find the market for their produce if and when necessary.

For the extension of the project to more VDCs in the district six persons have been identified from the VDC to be trained as catalysts and paid by the Project at a rate equivalent to the similarly qualified teachers in the village schools. A Social Mobilizer, who is a Project staff, regularly visits the VDC and interacts with the groups. Based on the village needs, the line agencies are invited by the Project to extend the necessary technical assistance including organizing training sessions for them.

The Project also extends large grants to the VDCs, including what they call “one time Investment in Organization”. In the case of SKG VDC, it received a sum of 1,144,000 rupees last year from the project which was allocated for such sectors as irrigation, drinking water, seed capital fund, training and feasibility studies (Ibid:25). The money is jointly allocated with the 500,000 rupees of government grant to the VDC and the Project Chief i.e. the National Project Coordinator and the DDC President of the district are also invited to the meeting of the Advisory Council of the VDC where the grants are apportioned for different village projects. Altogether, the VDC became the beneficiary of 1.7 million rupees during 1995/96.

This is, by far, a more effective and productive UNDP project than the one described earlier. The project has been able to generate a widely participatory development process including a massive mobilization of local resources. However, it is hard to see how this approach can ever be replicable and sustainable on a wider scale, given the fact that SKG is only one of the 4,000 VDCs in the country. The innovation seems to suffer from two immense limitations. First, each of the VDCs under the program has been the beneficiary of very large sums of grant from the Project which would be hardly replicable on a national scale.

Even more difficult would be the replication of the catalytic support. As it is, the UNDP project has set up a regular office at the district capital in Putlikhet, has commissioned a complement of five UNDP-paid professional staff led by a Ph. D. graduate, has enough resources for paying local staff in the VDCs, and is equipped with necessary transport supports, among others. It is rather strange that UNDP chose to run the program itself instead of letting a host country institution to plan and run it for the sake of ensuring greater sustainability and replicability. In Nepal, there now exists sufficient capability in the non-government sector to plan and manage such programs effectively. Instances of such organizations would include Rural Self-reliance Development Centre (RSDC), SAMAGRA which recently hived off from RSDC, Centre for Self-Reliance Development (CSD), SAPPROS (Support Activities for the Poor Producers of Nepal), NIRDHAN (the organization of the Deprived), CEAPRED (Centre for Agricultural Policy Research, Extension and Development) and other regional NGOs like SERSOC in Lamjung, Pit in Makwanpur, etc. It is inconceivable that UNDP was not aware of this possibility. Given such a situation, the UNDP, by choosing to implement the enterprise on its own, has only exposed itself to a possible speculation that this has been a show-window exercise designed to placate a constituency other than that in Nepal.

The GTZ Support for Rural Development in Nepal: GTZ, as a major donor in the field of rural development, started its assistance program from Dhading Development Project (DDP) in 1983 and went on to undertake Gorkha Development Project in 1990 and Lamjung Development Project (LDP) in 1994.

GTZ itself has been a decentralized organization with major decision-making powers given to host country-based Project Team Leaders. And in Nepal, all of them eventually came from the ranks of Nepali professionals. Thus, when DDP was designed in 1983 with the aim of “improving the living conditions of a large section of the population and assisting in the ecological rehabilitation of the Dhading District”, it was the time in the country when the Decentralization Act of 1982 was just passed by parliament but not promulgated yet. But, the architects of DDP, inspired by the provisions of the Act, designed the project strictly along its lines, allocated untied development grants to all the wards in all the fifty Village Panchayats in the district and required the creation and functioning of User Groups to plan and implement local projects in them. The Project’s sectoral resources too were allocated to the District Panchayat at the district level so that the line agencies had to design their programs with the participation and endorsement of the elected body. Overall, the project was tried to install and strengthen a decentralized planning and implementation system in the district more or less as provided in the Decentralization Act of the country. Despite years of effort, however, the project on the whole failed to establish a genuinely decentralized planning and management system in the district, and this was due mainly to the deficiencies in the related national frame conditions as discussed above.

But there was more to the project than that. It also included the construction of two major environment-friendly or “green road” arteries in the district. The roads were not only completed accordingly, but today remain an example for other VDCs in the district to emulate in constructing their own roads with the 5 hundred thousand rupees they started receiving from the government more recently.

Similarly, in 1989, when the project saw that the Swabalamban (Self-Reliance Development) Program was becoming a resounding success in effectively helping the poor in Palpa, it took steps to invite the concerned NGO to implement the program also in Dhading. By 1995, the Program had been implemented in 21 of the 50 VDCs in the district forming a total of 144 Income Generating Groups and approximately covering some 20 percent of the VDC households in specifically targeted poor neighborhoods. Under the program, each member was required to contribute a commonly agreed sum of money, generally 20 rupees a month, to a group savings fund. More resource savings were effectively achieved in member households by discouraging and banning drinking, brewing, gambling, and extravagance in social and religious ceremonies such as marriages, initiation rites, funerals, etc. By 1995, the members’ monthly savings in the district amounted to 1.0 million rupees by 1995 which was used as a group-managed credit scheme for its members at a group-decided interest rate, generally one percent per month. The NGO also administered a Capital Revolving Fund under which a total of 2.5 million rupees had been lent in cumulative disbursement for the members’ income generating projects and its interests were repatriated to group savings.

Because each member, both poor and non-poor alike in the groups, contributed equally to the common pool of savings, the participation by members has been total and complete in group decision-making, notwithstanding their mutual disparities in their class or caste status. Sanitation is a must and each member household has a latrine that is used properly. Mutual cooperation among the villagers has been effectively fostered not only for infrastructure construction and maintenance but also during personal calan1aties. With the income generating group functioning as the pivot for mutual cooperation, the communities, by all accounts, has been proud and happier (Ojha and Shrestha, 1996).

The NGO-deputed, relatively low paid, external catalyst called “Motivator” effectively acted as the villagers’ friend, philosopher and guide, who has often been the conduit for access to inputs and technologies, and remained a highly regarded man or woman in the community. His/her performance in the village was closely monitored by his/her superiors at different levels. A recent assessment of the program concluded: “Beyond doubt, the program has set in motion an unprecedented momentum in the village communities for the poor and the non-poor alike to organize and act for self-reliance and development in mutual harmony” (Ojha and Shrestha, 1996:83).

In a similar vein, the loss-making Small Farmer Development Program (SFDP) of the Agriculture Development Bank in the district was another target of the GTZ project for improvement and sustainability. The program, a supervised credit scheme of the Bank, has over the years been characterized by high overhead costs, low repayment rates and enlarging number of delinquent loans. This resulted from the bureaucratic nature of the SFDP project management making the program increasingly unsustainable. But the program had already covered 20 of the 50 VDCs with a total membership of 7,337 including 2034 females in the district by 1993/94. The GTZ’s DDP and SFDP interventions, working with the Bank, introduced the concept of farmer-managed federated private cooperatives called Small Farmer Cooperative Limited (SFCL) of the SF groups. Although the first such “autonomized” cooperative was registered only only as recently as 1993, it was reported that the cooperatives “handled their expanded domain of decision-making relatively competently” and that their overall financial performance appeared to have “improved considerably” with higher loan disbursement and increased collection of outstanding loans (Mishra and Bhattachan, 1994:88).

Barring a case or two which were causing problems for idiosyncratic reasons, by and large the approach to federate the SF groups has been a success. The management has been transparent, and credits extended based on the need and community-assessed creditworthiness of the member-borrowers. Repayment rate has dramatically improved, and even the past delinquent loans of several years have been in the process of being collected under community pressure. A recent evaluation of the DDP reported that this innovation of having the SFCLs to act as “independent financial intermediaries between the farmers and the bank” has been recognized as being one of national significance (Kievelitz and Banskota, 1996:41-42).

The Gorkha Development Project, initiated in 1990, has just recently completed its Planning and Orientation Phase (1991-94). Benefitting from the DDP experiences, generally, it decided to emphasize even more on the NGO-catalyzed poverty alleviation interventions which has since organized 550 groups covering 9,000 households in the district (Kievelitz and Banskota, 1995). As of mid- 1995 the Swabalaman Program alone had covered 33 of the 69 VDCs in the district. In addition to being effective saving, credit, income-generating and social reform forums as mentioned above, the income generating groups in the VDCs have also emerged as the major institutional basis for such interesting and successful innovations as community-managed livestock insurance schemes, highly effective women forest user groups, effective user management of community drinking water projects, installation of micro hydro-electric projects, construction of major suspension bridges over Trisuli river, and even construction of major “green” road arteries in the district based on the division of tasks between groups at different locations along its alignment. The farmer organizations in the district have now emerged a major force to reckon with for self-help development.

Many district politicians who are used to the politics of patronization and to doling out resources in the hope of getting votes in exchange, find themselves ill at ease to have to deal with organized voters at the grassroots. But since the farmer organizations have become sufficiently numerous in the district, the leaders have not only learnt to support them, but have often become quite vocal about promoting their cause. From this perspective, it can also be seen as a development of very great political significance in the country–enhancement of the level of accountability and responsiveness of elected leaders as a consequence of the self-reliant organization of voters at the grassroots. It will certainly be worth the time and interest of political scientists and development practitioners in Nepal to monitor and observe the further unfolding of this process in the district, at least for several years to come. The Lamjung Development Project was basically conceived as an intervention to ensure environmental rehabilitation and protection in the upper catchments of the Marsyangdi River on which the German government has made major investments to build the Marsyangdi Hydro-electric Project.

As there was direct relationship between the poverty of the local inhabitants and the state of the natural environment around them, the Project’s architects found it compelling to emulate the Dhading and Gorkha models in poverty alleviation. The Project itself was called Rural Development Though Self-Help Promotion, Lamjung or RDSPL which was seen as “an exemplary project in the sense that on the level of the project goal a clear focus on the weakest part of the Nepalese society has been set” (Banskota, Kievelitz and Gurung, 1995:15). Regarding its poverty-oriented intervention a recent assessment of the Project concluded that “in a short period of about 16 months some praiseworthy achievements have also been made. Partner NGOs have already organized over 50 Self-help Groups in 9 VDCs and encouraging results can be felt and observed. Organizing the poor has not only brought tangible benefits in terms of savings and investment programs, but also intangible benefits such as social cohesion, improved relationships among individuals of the community, control of excessive alcohol drinking etc. Selecting a local Lamjung based NGO, SERSOC, supporting it and net-working with the Rastriya Banijya Bank and SERSOC in their Banking with the Poor Program is undoubtedly an innovation and achievement of RDSPL JPSU” (Ibid:32).

Text courtesy: Social economy and national development, A NEFAS publication 1996: Thanks the author and NEFAS: Ed. Upadhyaya. N. P.

Concluded.