*EPF413 10/09/2003
Byliner: Governments Must Create Stable Environment for Partnerships
(Need to share responsibilities with NGOs) (1490)

The Bush Administration believes that partnerships between donor and developing countries, international agencies, non-governmental organizations, businesses, and other stakeholders must be a critical component of a global strategy for countries seeking to fight poverty and provide economic opportunities for all their people. The United States remains and will continue to be the largest bilateral donor to the developing world.

Once enacted, the Millennium Challenge Account (MCA) will increase U.S. core official development assistance by 50 percent over three years, to a total of $15,000 million annually starting in fiscal year 2006. MCA is predicated on the importance of partnerships in leveraging resources for development, since the development record of the past few decades shows that enduring growth and prosperity are built less on official development assistance than on open markets, increased trade, sustainable budget policies, and strong support for individual entrepreneurship.

Governments and civil society need to work cooperatively to allow the private sector to act as the engine of growth and job creation. A variety of private sources -- non-governmental organizations (NGOs), private voluntary organizations, foundations, corporations, the higher education community, and even individuals, many through remittances -- now account for 80 percent of total capital flows to developing countries. A U.S. Commerce Department study two years ago showed that, since the 1960s, private capital flows to these countries jumped from $15,000 million to $326,000 million annually.

In country after country, there are many examples of how new alliances -- and the leveraging of private sector and other non-governmental resources -- are forging a better future for families and communities. The article that follows serves as a brief guide to how public-private partnerships are formed, the basis for their success, and how countries that wish to benefit from partnerships can best form and sustain them.

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Government and Partnerships
By Christopher Conte

(Christopher Conte is a freelance writer based in the Washington, D.C., area.)

Governments can promote partnerships for development in two ways: they can create an environment in which partnerships flourish, and they can work with organizations from the private and non-governmental sectors in actual partnerships. Both roles are crucial, but they can be tricky -- especially for countries that lack democratic traditions.

One of the most important steps governments can take to nurture partnerships is to create a safe, stable environment where foreign investors and non-governmental organizations (NGOs) feel secure, and where the rule of law allows them to operate, make commitments and plan for the future. In addition to assuring physical security and creating conditions that attract foreign investment, this requires accepting that NGOs and private businesses have an important role to play in addressing social problems.

"A lot of times, the relationship between government and civil society is polarized at the local level," notes John Garrison, a spokesman for the World Bank. "Governments think civil society organizations are the opposition, or they ask, ����Why should we listen to civil society since they weren't elected?'" The answer, Garrison says, is that a thriving non-government sector is crucial to democracy because it helps promote economic development and advances the needs of the disenfranchised. So, he says, governments must become more accepting of NGOs, and more willing to share responsibilities with them.

At the same time, however, NGOs warn that government shouldn't go too far in ceding its traditional responsibilities. "We have to remember that private resources can't substitute for a government commitment to help address problems of poverty," says Mary McClymont, president of InterAction, a coalition of U.S.-based NGOs. "Private dollars can't be the answer alone."

Beyond adopting a friendly attitude toward the non-governmental sector, there are a number of more specific steps governments can take to help partnerships take root. Among them:

-- Take steps to eliminate corruption.

If unchecked, corruption imposes prohibitive costs on prospective partners; on top of the direct costs associated with being forced to pay bribes to corrupt officials, the indirect costs that arise from delays imposed by corrupt officials or the lack of efficient systems for reporting corrupt officials can be substantial. What's more, governments that fail to control corruption will find it hard to find willing partners in the non-governmental and private sectors. "Civil society organizations will be reluctant to work with governments that are corrupt because associating with them could hurt the organizations' own reputations," notes the World Bank's John Garrison. As one indicator of the importance international donors place on achieving the latter goal, the World Bank supports some 600 anti-corruption efforts worldwide, ranging from ones to establish anti-corruption hotlines to ones that focus on developing transparent procurement rules that ensure fair and open bidding for government contracts.

-- Engage all sectors in creating a vibrant nonprofit sector.

Partnerships need partners. Development experts all agree that establishing a strong non-governmental sector is a prerequisite both for democracy and for successful economic development. To achieve this goal, governments must develop laws that allow independent organizations to thrive.

The International Center for Nonprofit Law (ICNL), an international organization that promotes laws and regulatory systems designed to nurture civil society organizations, believes that how those laws are developed is almost as important as what they actually say. In particular, the center says, governments must encourage broad participation -- by government officials, parliamentarians, representatives of non-governmental organizations, citizens and others -- in the deliberations that produce enabling laws.

To achieve this goal, Hungary first published its draft law in a leading national newspaper, and then followed up with a series of town meetings to enlist public help in refining the plan. Similarly, Macedonia used broadcast and print media to publicize its efforts, and then convened a series of roundtable discussions with NGOs to work out the details. In both cases and others like it, the effort to foster public discussion helped reinforce democratic processes, ensured that the resulting legislation would meet the needs and concerns of the public, and helped promote trust among sectors, according to ICNL.

-- Enact laws establishing ground rules for NGOs.

Countries need to develop easy, quick and inexpensive administrative procedures for registering NGOs. NGOs cannot function without some system for obtaining legal status; their officers can't be shielded from legal liability, they can't sue (or be sued), and they can't even have their own bank accounts. Moreover, without legal status, it is almost impossible for them to raise money or enter into partnerships; American foundations, for instance, generally cannot give money to organizations that are not legally recognized.

NGOs also cannot thrive, however, if governments use registration requirements to control or limit them -- by specifying how many members they can have, for instance, or requiring that government officials attend their meetings, or establishing political litmus tests to determine whether they can be registered. Besides avoiding such overt forms of coercion, governments must be careful not to impose more subtle restrictions. In some countries, governments make the registration process prohibitively difficult -- by requiring officials to travel to distant cities to register, for instance, or by vesting the registration authority in the secret police. Douglas Rutzen, senior vice president at ICNL, says registration should be an "easy, quick and inexpensive" administrative procedure that is free of impediments that would discourage NGOs from forming.

Moreover, Rutzen says, NGOs must be free to establish their own governing rules. The government should not have authority to replace their boards of directors, demand to participate in their meetings, or decide whether they should be terminated, he says.

-- Help NGOs thrive.

Besides creating the conditions in which NGOs can exist, governments can take a number of steps to help them achieve financial health. In particular, tax law provisions -- such as allowing tax deductions for charitable contributions -- can go a long way toward putting NGOs on a solid footing. That, in turn, requires establishing criteria to determine whether an organization is publicly beneficial, and hence eligible for preferential tax treatment.

A 1996 law enacted by Hungary is often cited as a model. It permits taxpayers to direct that 1 percent of their taxes be paid to NGOs they designate. The idea has attracted attention as far away as Japan.

Resources

The International Center for Nonprofit Law works with developing countries to enact laws and regulations that allow the non-governmental sector to thrive. Its Web site contains useful references and background materials (http://www.icnl.org/).

The World Bank maintains a section of its Web site on creating an appropriate enabling environment for non-government organizations (http://www.worldbank.org/participation/enablingenvironment/enablingenvironment.htm).

"Global Perspectives on Laws Affecting Civil Society" is an overview of international best practices concerning laws affecting non-government organizations (http://www.icnl.org/about/summs.html).

The U.S. Agency for International Development's New Partnership Initiative is a comprehensive resource guide on how to foster, nurture and sustain partnerships that promote economic development (http://www.usaid.gov/pubs/npi/npiresrc.htm umms.htm).

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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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