Cambodia’s NGO Struggle

Earlier this September, Cambodian Prime Minister Hun Sen called for the revival of a controversial law that would require more than 2,000 associations and NGOs working in Cambodia to complete a complex registration process and submit to stringent financial reporting requirements.  This law would require government approval of documents detailing NGO structure, goals, funding resources, budget, logos and properties.  Fines and imprisonment of NGO leaders would be imposed for any NGO which fails to submit to these annual reports.

While some people see this law as heavy-handed, some of the requirements are similar to the laws imposed in other countries.  For example, in the U.S., non-profit organizations are required to submit a tax filing to the Internal Revenue Service annually.  The proposed NGO law is calling for transparency and is trying to address many issues including the perception that compensation and benefits of the NGO leaders are excessive.

In the new global economic area where the public is demanding transparency and accountability, are such laws necessary?  Or perhaps, the threat of legal enactment would encourage the field to regulate itself?  There is a balance though as to requirements that would benefit the public versus the government abusing its discretionary power.  For example, in Cambodia, there are instances of corruption in high-government of illegal logging and state-sponsored eviction of mass groups of people with compensation.

“Cambodia has been heaven for NGOs for too long,” Hun Sen said in a speech broadcast on national radio on September 26, adding that he had given up hope of reading any positive reports written by international or local NGOs. “The NGOs are out of control … they insult the government just to ensure their financial survival.”

The article, The End of an NGO Era in Cambodia, in the Asia Times Online, by Craig Guthrie, explains some of the issues why NGOs are seen as doing more harm than helping the Cambodian people and economy.  Here are some highlights from the article:

* Country directors for prominent international aid agencies typically receive a $250,000 annual package, which includes a spacious villa in the capital’s upmarket “NGO-ville” area, a four-wheel-drive vehicle – usually emblazoned with the logo of their donor agency or charity – and fees paid for the capital’s better international schools.

*  The aid watchdog Action Aid estimated in 2005 that the 700 or so international consultants working for NGOs in the country earned more than Cambodia’s 160,000 civil servants put together. “In 1993, yes, 99% of foreign consultants were justified; now, 5% are justifiable. The others are embedding and enabling the mentality of dependency,” Center of Social Development director Theary Seng said in June.

*  Cambodians now understand the word NGO, especially in the local context, to be a for-profit enterprise, said Sophal Ear, the author of The Political Economy of Cambodia, Aid and Governance. “It’s all a business and this is just another way to avoid taxes,” he said. “When not covered by donors, capital costs for NGOs have largely been privatized, through an extensive network of ‘donations’ to the ruling party by Oknhas [politically connected tycoons] politicians, and civil servants.”

See also article: Cambodia’s four letter word NGOs