Yangon, Burma

This article originally appeared on the Eurasia Review website on March 7, 2013. 

By Steve Hirsch

Donors of foreign aid to Burma are now making many of the same mistakes in that country as they have elsewhere in the past, according to a study on overseas assistance to the country as it reforms after decades of military rule.

The report entitled, “Too Much, Too Soon? The Dilemma of Foreign Aid to Myanmar/Burma,” focuses on the work of the leading multilateral and bilateral donors and is scheduled for release at the Washington-based Brookings Institution on Wednesday.

Read the full story on Eurasia Review.

Oct. 18, 2012

By Charles R. Ostertag

During Give2Asia’s 10th Anniversary Forum, the founder and director of Friends International, Sebastien Marot, explained his dissatisfaction: five-hundred million children are pushed to the margins of the world, the numbers keep increasing, and traditional charity models do not work because the charity dollars have been increasing, as well. These children have little or no choice but a life of extreme poverty, crime, and/or prostitution, which is often mixed with drug use. Additionally, these children frequently have families who live in similar conditions and face the same hardships.

However, despite Mr. Marot’s dissatisfaction, his organization strives for a fundamental goal: turn children into productive members of the societies in which they live. Friends International has four core programs that holistically work to do just that.

1. Friends Programs are run by Friends International itself. While the needs of each child differs, the common affect of the program stabilizes the child, perform harm reduction, and gives the child marketable vocational skills, confidence, and support to pull themselves out of poverty and create a better life. It is a holistic approach to rebuilding childhood and instilling a sense of self-respect and humanity. A case manager is assigned to each child and the child is also enrolled in an educational program and vocational center to learn job skills. Drop-in centers are established in the city giving children opportunities to eat, rest, and communicate with social workers. These programs also seek to give back some of the childhood that has been lost due to marginalization by incorporating play, physical activities, games, and teachings on the significance of the child’s country history and culture

Friends International also understands that if one child is rehabilitated, the risk of relapse is high if the community or close family ties also remain impoverished. While constant follow-up is performed on the child, Friends International also works with the child’s entire family and address their needs, thereby building a support network among family members. The ultimate goal in this context give the family the skills and healing they need to support themselves. In 2011, Friends International worked with 27,000 street children. Mr. Marot expressed this is but a small drop in the ocean of 500 million children.

2. Child Safe Network focuses on community oversight and alleviating the negative affect tourists and travelers can have on marginalized populations in the countries in which they travel. Mr. Marot explained that if people don’t know what to do (or what not to do), when they try to help, they can in fact do harm. For example, giving money to street children seems like a good idea but it actually encourages children to stay out of school or other beneficial program to seek the money that can be made by begging.

The Child Safe Network also trains key people in targeted communities to recognize and identify at-risk children and intervene on the child’s behalf.

3. City Alliance builds upon models created by Friends International and replicates them through partnership with other NGOs. Mr. Marot expressed that Friends International strives to be a “responsive organization,” and not like a oceanic shipping tanker, slow and lumbering. In 2011, Friends International and its 28 partners worked with sixty thousand street children across many different countries.

4. TREE Alliance addresses the problem of funding and donor continuity. Working with a child takes 4-5 years and few donors wish to fund a particular child or project for that long. In response, Friends International has created local businesses that generate money for their programs. These businesses have made programs 54% sustainable in Phnom Penh and are expanding to other areas.

Intertwined with the goal of making each child a productive member of their society is the objective of vast program replication and expansion at the State level. To this end, Friends International instills a proof-of-concept model such that the government cannot help but adopt it into policy whereby replication becomes automatic.

By Thomas Parks 

Burma (also known as Myanmar) may be on the verge of a dramatic expansion of international assistance. After last month’s parliamentary by-elections, there is likely to be more support for easing sanctions and increasing foreign assistance to the country to support the changes underway. Several major donor governments have announced easing of sanctions and increased aid to Myanmar, including Canada, the European Union, and Denmark. Dozens of donors and international NGOs are poised to establish new programs in the country in the coming months.

The hotels in Yangon are packed with international aid professionals. According to one NGO leader, “there are many ‘Burma experts’ in Burma right now” – an allusion to the dozens of researchers and aid workers that keep his phone ringing constantly. The development and humanitarian needs in the country are enormous, so this new wave of assistance is likely to bring much needed aid to millions of people. But in these heady days of Burma’s opening up to the world, let’s not forget the risks and lessons from scaling up the level of foreign aid too quickly.

There are several recent cases in Asia where the international community dramatically increased aid to a country that was not previously a major recipient. This scenario has generally played out in response to a major political transition, a post-conflict moment, or in the aftermath of a devastating natural disaster. Burma is a unique case. In most of the other cases, rapid scale-up of international assistance has come on the heels of civil wars that have left the country devastated. Burma is neither a post-conflict nor a “fragile state.” So, in many ways, this will be new territory for the international community.

The Government in Naypyidaw is preparing the groundwork for an expected increase in foreign aid. In a speech on March 1, President U Thein Sein spoke of the government’s interest to open up the economy, expand services, stabilize the currency, and achieve reconciliation with ethnic minorities. By preparing a “roadmap,” the Government is sending a clear message that it expects international aid to support its plans for development and reconciliation.

At this stage, it is important to reflect on some of the key lessons from other countries that have been down this road with rapid scale-up of assistance. For example, during the post-tsunami response in Indonesia and Sri Lanka, and in the immediate post-conflict periods in Cambodia, Timor-Leste, and Afghanistan, the international community responded with an outpouring of support in the form of technical assistance, democratization and elections support, budget support, and humanitarian aid. In the past 25 years, hundreds of billions of dollars have been spent in transitional, conflict-affected countries. While Burma is not at the same level of risk as these other countries have been, these comparisons may provide some useful guides for the international community given that the scale of assistance and the diversity of international organizations involved are likely to create similar challenges.

There are a few basic lessons from the past that should be kept in mind at this early stage, as the international community has an opportunity to get things right in Burma.

Lesson #1: Don’t let scale overwhelm the mission. When international assistance scales up rapidly in a place unaccustomed and unprepared for large-scale aid, problems are likely to follow. In post-tsunami Aceh and Sri Lanka, and post-transition Timor-Leste, large-scale aid often created perverse incentives that led to poor program quality and wasted resources. In most cases, donors are faced with the challenge of moving large sums of money in areas that have difficulty absorbing the funds. This scenario typically leads to implementation decisions that may have negative consequences. For instance, when donors cannot find adequate local capacity, they may turn to international contractors to deliver the assistance and meet the accounting and financial requirements of the donor. Under pressure to deliver quickly, contractors must often spend the funding on high-priced, imported materials rather than going through the more time-consuming process of sourcing locally. Tensions between the foreign aid providers and local groups can also lead to difficulties in monitoring of program activities, and low levels of local ownership. There is a major risk that aid to Burma could follow a similar course, without a concerted effort to manage the risks stemming from rapid, large-scale aid.

Lesson #2:  Political dynamics and informal “rules of the game” are just as important as formal institutions. In many past cases, international assistance has focused primarily on formal institutions, such as elections, courts, and parliaments, while ignoring the political dynamics that have largely shaped (and often undermined) these institutions. Intense political competition and informal patronage relationships were usually the factors that shaped power and governance before the transition, so it is almost certain that they will continue to play a significant role during and after the transition. In Cambodia, for example, the international community helped to establish a fragile truce between the major factions in 1993 – including two prime ministers – only to see it all fall apart in 1997 when the Hun Sen faction took over the government. Setting up the formal institutions and running an election is not enough. The informal power dynamics will eventually overwhelm formal institutions if the political settlement (a term commonly used to describe the informal power arrangements or “social order” in a country) does not hold.

In recent years, international donors have recognized the importance of political settlements in determining the trajectory of governance and stability in a country. In Nepal, during the post-civil war transition, the UK Department for International Development (DFID) recognized that the political settlement itself was in transition, as the major parties and the CPN-Maoists sought to recreate the political system and break down the old system of Kathmandu elite-dominated rule. DFID programs during these years sought to support this transition by supporting the peace process, strengthening new political leadership, and facilitating dialogue between elites to manage tensions between the major parties.

Lesson #3: International best practices are probably not the solution for Burma. In many developing countries that receive a large-scale influx of foreign aid, the international community has urged host governments to considered establishing state-of-the-art, western-designed models for new government agencies and formal state institutions. These new institutions are often poorly suited for the political and cultural realities in these countries. For example, with the support of international assistance, many countries quickly set up anti-corruption and human rights commissions to monitor abuses and prosecute officials and political leaders who broke the rules. Within a few years, however, it was clear that corruption was flourishing, human rights violators were acting with impunity, and these new western-modeled institutions were being mostly subverted.

Lessons #4: Prosperity at the center largely depends on the stability at the periphery. While most aid will likely be concentrated on change at the center of government, the key to Burma’s future stability and development will largely be determined by what happens in the conflict-affected ethnic minority regions. For more than half a century, the struggle between the ethnic Burman-dominated regime and ethnic minority insurgencies has profoundly shaped governance and security in the country. Many border regions are still affected by armed conflict. It will be essential to use this opportunity to draw the isolated, conflict-affected ethnic minorities into the positive changes that are taking place. Experiences in other countries have shown that international aid is often concentrated in the ethnic populations with the best connections to power. Ethnic groups with long-running resistance movements are often excluded – not necessarily by donors, but by governments that are seeking to use aid to reward their allies in the conflict area. For example, in Mindanao (southern Philippines) from the 1980s to the early 2000s, the vast majority of assistance was concentrated in the Christian-Filipino growth centers of Davao, General Santos, and Cayagan de Oro. The ethnic Moro-Muslim population close by in the Autonomous Region of Muslim Mindanao was largely left out of the economic transformation happening nearby, often creating more tension and frustration within this critical community. Donors mostly recognize that there will need to be an extra effort, and considerable additional risk, to channel aid to these subnational conflict areas. This is often enough to deter them from making the conflict areas a priority. In the case of Burma, neglecting the remote conflict areas could lead to a renewed cycle of armed resistance and military suppression, putting the whole transition at risk.

Lesson #5:  Do not underestimate the complexity and diversity of subnational conflict areas. While it will be critical for the international community to focus much of our effort on the subnational conflict areas, delivering aid to these regions will be extremely challenging. One common mistake in conflict-affected areas and fragile states is to treat the entire country (or subnational conflict area) the same, using the same program models and approaches across the region, and delivering the benefits through organizations or government officials who are not from the area. In reality, subnational conflict areas are usually extremely diverse and complex environments, with multiple factors leading to violence and multiple local political factions competing for dominance. Internal conflict areas are increasingly known for their “conflict micro-climates,” where local dynamics are a more frequent cause of violence than regional or national factors (i.e., conflict between insurgent group and the military). In Mindanao and Nepal, for example, the types of conflict and key actors involved may differ considerably from town to town or valley to valley. The international community has an increasingly sophisticated understanding of these local conditions, but has generally struggled to adapt programs to these complex realities.
The subnational conflict areas of Burma will likely be one of the most challenging environments for aid programs, and will require much greater adaptation. Business as usual will simply not work.

Thomas Parks is The Asia Foundation’s regional director for Conflict and Governance based in Thailand. He can be reached at tparks@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

This announcement comes in the wake of unexpected reforms in the country, including an election in April in which the opposition party, led by Nobel Peace Prize winner Aung Sang Suu Kyi, swept the available parliamentary seats. The easing of restrictions on charity work in Myanmar are the first in a planned series of rewards for the government of Myanmar.

From the Chronicle of Philanthropy:

“Treasury rolled back restrictions on financial transactions undertaken by private groups in Myanmar in support of democracy-building, health, education, sports, and religious activities. The United States is also planning ease investment restrictions and send an ambassador to Myanmar for the first time in two decades.”

Read the full story from The Chronicle of Philanthropy by clicking here.

By Amy K. Lehr

Following the success of Daw Aung San Suu Kyi and her National League for Democracy (“NLD”) party at the polls and today’s announcement that the United States will soon lift some of its sanctions against Burma, companies are closely scrutinizing the possibility of conducting business in the long-isolated country.

Recent events should not, however, be considered a green light to conduct business in Burma for at least two reasons:

• First, governments are likely to take a step-by-step approach to the sanctions, awarding Burma for specific actions taken, rather than lifting them wholesale.
• Second, even if all the sanctions were lifted tomorrow, companies would be wise to proceed with great caution and conduct robust, project-specific social and environmental due diligence.

In a statement issued earlier today, U.S. Secretary of State Hillary Clinton announced that the United States will lift sanctions related to international development aid and some travel restrictions and will begin

the process of a targeted easing of [the] ban on the export of U.S. financial services and investment as part of a broader effort to help accelerate economic modernization and political reform.

Today’s announcement signals impending change in U.S. sanctions policy, but should not be understood to mean that the U.S. government will lift all or most investment-related sanctions in the immediate future. Rather, the Obama Administration has noted that it will lift sanctions in a stepwise process if Burma takes more actions to demonstrate that it is moving toward a democratic system.

The Obama Administration and Congress will condition the further lifting of sanctions on whether Suu Kyi comments positively on the elections; her party’s ability to operate freely in the Parliament and institutionalize rule of law; and whether Burma makes progress on resolving the myriad ethnic conflicts along its borders.  How, exactly, improvement in these areas will be measured is not clear, but Burma is unlikely to make substantial progress on them overnight, meaning that it will take time for the sanctions to be lifted.  Furthermore, Congress and the Obama Administration may hold different views on what constitutes sufficient progress, which will slow the lifting of sanctions because the process requires coordination between the two branches of government.

In the meanwhile, companies should consider how they would conduct business responsibly in Burma, were the investment-related sanctions to be lifted.  Widespread corruption, ethnic conflict, and antiquated social and environmental regulations present significant challenges. Companies will need to conduct robust social and environmental due diligence that takes into account the specific industry and location — general country due diligence will not suffice.

Context matters enormously. For instance, infrastructure projects even in central Burma raise significant human rights concerns, given the Burmese government’s resettlement practices, but infrastructure projects in ethnic regions are even more problematic. The central government is disliked and has limited control in ethnic areas, and companies should not assume that a government permit provides a social license to operate. Companies that seek to operate in ethnic areas should consider the risk that they will exacerbate conflict between ethnic groups and the central government — a determination that requires detailed due diligence, taking into account the specific ethnic groups involved.

In instances in which investments would not have a large physical footprint, companies should still exercise caution. Corruption is a significant problem, and the military and its affiliates play an outsized role in the economy. Even if local companies are not on sanctions lists, they may be associated with notorious military officers who are linked to human rights abuses. Accordingly, conducting business with such companies, even if legal, could have negative reputational effects.  Projects in Burma face other challenges as well because Burma inadequately regulates labor rights, privacy, freedom of expression, and the environment, so companies that merely follow national law would fall well below international standards for good practice.

In short, the United States will lift some sanctions on Burma in the near future, but will not end most related to investment for some time. This provides an opportunity for responsible companies to consider what forms of due diligence they would carry out so that their investments do not have negative social or human impacts, and do not bring excessive corruption risks. Companies should become familiar with Burma’s complex political and ethnic make-up so that if the investment-related sanctions are lifted, they are prepared to conduct due diligence that is granular and specific to avoid the myriad pitfalls related to operating in Burma.

Amy Lehr is an attorney at Foley Hoag’s unique corporate social responsibility (CSR) practice. In this role, she provides advice to major multinational corporations on best practices with regard to human rights, labor rights, and indigenous rights issues, as well as on stakeholder relations with local communities, host governments, security providers, and non-governmental organizations.

“There are going to be more such frequent natural disasters and they will complicate the challenge of achieving sustainable development in Asia,” Lohani said. ”As the region’s economies become increasingly linked through commercial supply chains… the impacts of such disasters are no longer confined to the place of occurrence but have wider regional and local impacts,” he said.

Read the full story from the Economic Times, here. 

Thailand isn’t the only country that is investing in disaster preparedness. In recent years China has built 85,000 dams, 270,000 kilometers of dykes and 170 water-retention areas, as well as 31,000 flood gates to better cope with flood risk.

The Chairman of the Global Network of Civil Society Organizations for Disaster Reduction, Marcus Oxley, explained the changing ways disasters affect Asian nations.

“Losses in terms of assets are actually on an exponential increase. The mortality losses due to floods and cyclones are actually decreasing. But the economic losses, the losses to livelihoods, the losses to houses, to our assets, our physical infrastructure is actually increasing,” said Oxley.

Read the full story here.

In the Asia-Pacific region one challenge that must be faced is rising sea levels, which in Bangladesh alone will claim 11 percent of the land and affect 15 million people by 2050. In China, smog and pollution are already responsible for 300,000 premature deaths and 20 million cases of respiratory illness each year, according to the report.

But not all the news is bad. According to the same report, four Asian nations  – China, India, Vietnam and Bhutan — have reversed deforestation and begun replenishing their forest acreage.

William Orme, a spokesman for the UN Agency, in an interview with the New York Times, said:

“Even if someone’s a climate skeptic, this report says, ‘Put that aside for a second.’ If you believe in something like a moral commitment to the global community and in getting people out of poverty, we must address these environmental issues.”

DOWNLOAD THE REPORT 

The full report is available from the United Nations here. Or, you can read the New York Times summary, here.

Asian philanthropy has grown dramatically during the past decade, attracting considerable attention both within Asia and globally. Previously of interest primarily to a small number of advocates and researchers, the growing scale and the promise of Asian philanthropy have recently drawn the attention of major banks, private wealth advisers and business journals. Within just the past three months, for example, excellent reports on the state of philanthropy in Asia have been published by the Economist Intelligence Unit and UBS, while an invitation-only conference was organized for major philanthropists in the US by Credit Suisse.

Reflecting these trends, the Asia Pacific Philanthropy Consortium (APPC), a regional philanthropy research and advocacy organization based in Hong Kong, and Give2Asia, a San Francisco-based facilitator of charitable donations from the United States to non-profit causes and organizations in Asia, announced their merger earlier this week. Both organizations have long shared the goal of increasing the flow and effectiveness of philanthropic giving within and to Asia. APPC focused its efforts on developing philanthropic infrastructure within Asia, while Give2Asia has worked for the past decade to make charitable giving from the US easier, safer and more effective.

Established in December 1994 after a series of regional research conferences, APPC focused its research, conferencing and training on four core challenges facing the growth of philanthropy and the non-profit sector in Asia: improving the legal and regulatory environment; increasing public awareness and support for philanthropy and the non-profit sector; facilitating financial resource mobilization within and for Asia; and strengthening human resources for the development of philanthropic organizations. Its major accomplishments include the first comparative studies of the legal and regulatory framework governing the non-profit sector in 15 Asian countries, the first systematic survey of fundraising and charitable giving at the household level in seven Asian countries, organizing and supporting numerous study tours for Asian government and non-profit leaders, philanthropists and scholars; and sponsoring international conferences and dialogues on topics such as corporate community engagement, post-tsunami disaster relief and preparedness; and improving governance in the non-profit sector. APPC also sponsored fundraising and financial sustainability training in cooperation with Philippine Business for Social Responsibility (PBSP) and Venture for Fund Raising, a Manila-based non-profit consulting firm spun off from APPC.

Give2Asia is a philanthropic service organization that facilitates charitable giving to Asia by individuals, foundations and corporations in the US. Give2Asia offers donors unparalleled country-specific expertise on local needs and non-profit organizations (including community organizations, NGOs, universities, museums, health and medical facilities) throughout Asia, conducts in-depth due diligence, manages funds, and provides regular reports to donors. Since its creation in 2001, Give2Asia has distributed $177 million in grants to qualified Asian non-profit organizations and charitable causes. About 36% has been granted to organizations in China, 29% in India, 20% in Southeast Asia, 6% elsewhere in South Asia, and the balance in Australia, Japan, Korea and New Zealand. In terms of subject areas, 34% has gone to education, 27% to health care, 14% to disaster response, 10% to social welfare services, and 5% to environmental causes.

The merger of APPC and Give2Asia creates a new resource for donors in Asia and the US. APPC’s research and conference reports have been digitized and are available for free download at Give2Asia’s new website, www.asianphilanthropy.org. APPC was led by a board of directors consisting of some of Asia’s most expert and committed practitioners and advocates for philanthropy. Most of them will be part of Give2Asia’s new Asian Philanthropy Advisory Network (APA Network), which will enable Give2Asia to offer even more in-depth advisory services, including understanding country contexts, legal frameworks, strategic planning and impact assessment to philanthropic donors whether they live in Asia or the US. Give2Asia will also be publishing regular reports on the state of philanthropy in specific Asian countries in the months and years ahead, with many of those reports written by members of the APA Network.

The growth and spread of philanthropy in Asia is amazing to behold, with so many philanthropists and innovative and effective non-profit organizations emerging across the region. Yet much work remains to be done to sustain these happy trends. Among the greatest needs are improving the legal and regulatory frameworks in some countries to make it easier for non-profits to obtain approved legal status; improving transparency and accountability among new Asian donor foundations and non-profit recipients; creating or increasing tax incentives for charitable giving by donors large and small; professionalizing the philanthropic field through training for CEOs, program officers, accountants, and even trustees; providing opportunities for peer-to-peer learning and to observe best practices elsewhere; and educating the media and the public to better understand the role of philanthropy in societies in which government has traditionally been expected to provide public goods and services. Unfortunately, the philanthropic sector still receives most attention only when spectacular acts occur, either in the form of unusual donor generosity or the scandalous behavior of a few non-profit organizations.

Give2Asia is a service organization focused primarily on assisting donors to realize their philanthropic agendas. We will continue to have that as our top priority, but in the years ahead, based in part on the pioneering work of APPC, we will also work with partners in Asia to build the capacity and effectiveness of the philanthropic sector itself. Over time, contributing to building strong, effective, well-managed and transparent non-profit organizations in Asia is the greatest service we can provide for our donors.

Barnett Baron is currently president and CEO of Give2Asia. He was founding chairman of APPC from 1994 to 2005; he was also a member of The Asia Foundation team that created Give2Asia in 2001. He can be reached by email at bbaron@give2asia.org.

Asia Value Advisors released a report titled “Impact Investing in Asia: From Definition to Pathways to Scale via Impact Giving.” The research brief seeks to bring philanthropic stakeholders together under common issues and philanthropic dialogue in order to promote impact investing.

To read the full report, click here.