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NEWSLETTER

Wielding the Purse Strings of Southeast Asian Civil Society

By Rosalia Maria Emanuela Sciortino

This is a condensed version of an article that appears in its entirety on the website of New Mandala, a news and opinion online publication sponsored by the Australian National University, and can be accessed at NewMandala.org
 
 
Protesters clash with police in Kuala Lumpur. Photograph: Saeed Khan/AFP/Getty Images
 
As democracy experiences a global decline, and Southeast Asia oscillates between authoritarian endurance and democratic rollback, civil society in the region is facing a bleak future.
 
Dictatorships and quasi-democracies are racing to curtail freedom of speech and assembly and to subject civil society organizations (CSOs)—especially those advocating structural changes and human rights—to ever-tightening regulatory requirements. 
 
Across Southeast Asia, governments’ stiffened oversight is limiting access to international and national funds by CSOs, in particular when directed at financing advocacy and rights-based activities. This occurs amidst an evolving development aid landscape wherein established donor agencies reposition themselves in line with more conservative contexts back home and abroad, and where a new set of funders does not necessarily appreciate the merit of a “vibrant civil society” for democracy and development….the general result is that civil society in Southeast Asia is losing its conventional backers without finding the same level of support among alternative donors, affecting its ability to play a critical and transformative role.
 
Tightened government control
 
Governments in Southeast Asia have generally been apprehensive of CSOs challenging the status quo and uncomfortable with their mission of “safeguarding democracy, human rights and fundamental freedoms” and of “empowering” the marginalized. 
 
An exception has been the Philippines. Uniquely in the region, the 1987 Philippine constitution affirms the societal contribution of non-profit entities, foresees financial support for organizations that promote social welfare and stipulates for them a range of fiscal exemptions.
 
The 2015 Index of Philanthropy Freedom found the region, and Asia more generally, to be below the global average in terms of ease of registering, financing and operating CSOs. Examples include Malaysia’s employment of security and counterterrorism laws against NGOs and their international donors, and the impossibility in Vietnam for advocacy and human rights organizations to register and thus to legitimately receive funding.
 
Prominent in the growth of more-stick-than-carrot regulations are measures to control CSO resources. Governments in Southeast Asia, like in other conservative parts of the world, are becoming more adept in employing financial tools for repressive purposes, from withholding public funds and limiting the type of CSO activities that can be funded, to taxing donations, requiring donors to register with state agencies and applying anti-money laundering, trafficking and, more recently, anti-terrorism financing measures at their discretion.
 
Government-backed grant-making foundations, a hybrid kind of institution consisting of public funding and semi-independent management with a significant presence in Southeast Asia, are at high risk of direct intervention. In 2016, Thailand’s government tightened its control of the Thai Health Promotion Foundation, the largest donor in the country, which is funded with tobacco revenues.
 
Heightened scrutiny is placed upon funding from foreign donors, “a particularly insidious means to narrow the space for civil society [… in] an environment where significant domestic funding for CSOs is absent” or minimal. Grantee organizations are vilified for being “foreign agents” paid to advocate a “Western agenda” dismissive of Asian values, and in extreme cases are accused of treason and criminalized.
 
Across Southeast Asia, past agreements and permission procedures for foreign donors and international NGOs (INGOs) to operate in various countries are being reviewed and there is greater examination of these institutions and the activities they are funding.
 
As generally risk-averse actors, multilateral and bilateral donors and larger INGOs are sensitive to local political climates and quickly adjust to government signals. Meanwhile, more independent foundations and smaller INGOs struggle to find new channels to continue supporting groups and causes now considered undesirable. 
 
To start with, funding opportunities for CSOs are declining as the overall amount of official development aid (ODA) from the Organization for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) donor countries is being cut and diversely allocated.
 
A hostile aid landscape
 
In the resulting prioritization of foreign assistance, Southeast Asia as a whole has scored low, considered by some of its major donors (most of all the United States, Europe and Canada, but most recently also Australia) to have lower strategic and economic value compared to other regions. Its fast growth has also been seen as a validation of its readiness to “graduate” from aid and used to justify reduced support, notwithstanding growing inequities, persistent vulnerabilities and unresolved development challenges.
 
This scaling back and repositioning of foreign assistance has in turn implied a commercialization of aid objectives, delivery systems and development partners, which has correspondingly meant moving away from civil society and from the role envisioned for CSOs since the late 1980s. At that time, DAC donors started to provide official funding to the non-profit sector and enlisted INGOs in their countries to work overseas as a prerequisite for development programs...”
 
Yet such repeated commitments have only partly materialized in Southeast Asia….Governments have now started to procure education, healthcare and other basic services from NGOs to enhance access to out of reach groups, although levels of such procurement are still low in Southeast Asia when compared to South and East Asia.
 
More fundamentally, the pro-CSO development paradigm is increasingly being challenged by the rise of pro-market ideologies and the closer integration of aid and trade, which encourage economic solutions and approaches in development. This is exemplified by current donor support to ASEAN to foster women’s empowerment, which emphasizes women’s entrepreneurship and enterprises as instrumental to economic growth while placing less emphasis on supporting women’s rights groups, building feminist movements, changing cultural norms and enhancing women’s political participation to achieve gender equality.
 
At the global level, the United Nations’ 2030 Agenda for Sustainable Development, while acknowledging civil society’s contribution, gives an unprecedented role to the private sector “as an engine of economic growth and employment and a source of finance, technology and innovation” and trusts public–private partnerships for achieving sustainable development. In a newfound framework, reminiscent of early postcolonial modernization endeavors, the trickle-down effect of economic growth is seen as the driver of sustainable development. 
 
The new mission is fostering a “vibrant private sector”—rather than a “vibrant civil society”—of small and medium enterprises and socially responsible corporations, upon which sustainable development and trade performance is assumed to rest. Among donors, the hype is now for social enterprises: traditionally non-profit, but increasingly for-profit organizations that apply commercial strategies to attain social and environmental as well as financial outcomes.
 
More and more, private entities, trusted to be more efficient than the non-profit ones, are enlisted as “implementers” of foreign aid to help governments reach the set targets. In the resulting multi-layered aid industry of mainly private contractors and facilities….local NGOs are expected to bid for a project or respond to calls for proposals rather than initiate activities, and eventually are employed as sub-contractors to deliver services on commission. 
 
In Southeast Asia, like in the rest of the world, changes in the development sector towards being “narrowly focused on short-term results and values for money” is taking away resources and autonomy from civil society and compromising its ability to strive for social justice and transformation.
 
Yet even the diminished level of DAC donors’ engagement with civil society may still appear substantial when compared to the dismissive attitude of non-DAC countries operating in Southeast Asia—especially China, India and Middle Eastern countries. Since these emerging donors are responsible for a growing aid share globally and in the region, their practices do not bode well for the future of NGOs and other CSOs. 
 
China’s denial of a development role for civil society matters the most due to its prominent and expanding reach. A latecomer to development assistance, since 2005 China has ramped up bilateral and regional aid along with loans from the Asian Infrastructure Investment Bank (AIIB) and other financial incentives under the Belt and Road Initiative (BRI), surpassing most traditional aid donor countries. Southeast Asia, due to its proximity to China, its ethnic Chinese diaspora and its abundant natural resources, is a priority area for Chinese aid.
 
From the start, Chinese foreign aid has been heavily skewed towards economic measures, a blurring of aid and financial investments and loans, and delivery through private-sector or state-owned enterprises, with few socio-cultural projects and almost inexistent funding of NGOs. The ideological disjointing of economic growth from civil liberties and democracy, expressed in no-strings-attached and hands-off aid policies, is welcomed by increasingly authoritarian regimes, but clearly precludes a meaningful role for civil society.
 
 

“Promoting Transparent, Effective and Accountable Government”—from the Ford Foundation's Indonesia country report. Indonesia brochure PDF.

 
Philanthropy and civil society: from foundation darlings to orphans?
 
Historically, international foundations sponsored the establishment and strengthening of civic institutions and movements in Southeast Asia much earlier and at a higher level than bilateral and multilateral donors. Beginning in the Cold War period, U.S. foundations—foremost among these the Ford Foundation and the Rockefeller Foundation—engaged with countries in the region with the aim to assist them to “take off” on the development and democratization path. 
 
Starting in the 1950s, the Rockefeller Foundation placed staff in local institutions and the Ford Foundation established country offices across the region with the idea that proximity was necessary to understand the context and to grant strategically. 
 
Early on, philanthropic foundations’ support facilitated the decolonization of government institutions, strengthening incipient governance structures and public services, technology transfer and foreign know-how. Western institutions were entrusted to build or strengthen local universities and educate the emerging national leadership in country and abroad, as well as create a pool of technical personnel, teachers and administrators. INGOs, mainly from the U.S., were also funded to establish chapters or help build local organizations in the selected program areas such as population, health, agriculture and governance.
 
During the 1970s and 1980s, as international foundations adopted a more holistic and bottom-up paradigm, more and more NGOs were provided capacity building and long-term funding to address the social and cultural dimensions of development and to spearhead community programs in disadvantaged areas. By the 1990s the principles of “participation”, “empowerment” and “local ownership” were firmly established among international foundations, and grants were directed to local organizations as the best positioned to find systemic and context-specific solutions to complex societal challenges, including fostering more open and accountable governments. 
 
As dictatorships came to an end and optimism about democracy bloomed in Thailand, the Philippines and Indonesia, civil society mushroomed. International foundations….funded activities to raise awareness of human rights, women’s rights and minority rights.
 
This social justice-oriented model of philanthropy was challenged in the early 2000s by the emergence of a new brand of foundations—including the Bill and Melinda Gates Foundation, the largest foundation ever with an endowment of $40.3 billion in 2017, about double that of the Open Society Foundations and almost four times that of the Ford Foundation….
 
In line with the thinking in development aid circles, the so-called venture philanthropy— or, more critically, “philanthrocapitalism”—reframes the modernization discourse in globalization terms, putting faith in the expansion of markets and innovations to drive worldwide development.
 
In this view, development is conceived as overcoming a knowledge deficit caused by a scarcity of resources, which requires technocratic and financial acumen rather than socio-cultural and political change. Efforts are therefore directed at the discovery of universal “magic bullets” that, if combined with adequate joint investment from foundations and the corporate sector, can be applied globally and lead to development results and monetary gains simultaneously. 
 
Focus is on attaining scientific progress in health and agriculture, with little appreciation of “soft” and less quantifiable fields of human rights, culture and the arts.
 
The decline of socially-engaged and contextual grant-making endangers the position of civil society as the primary partner of international foundations. New foundations privilege public–private partnerships and working with the private sector. When they involve NGOs, it is to deliver services with the expectation that they operate according to “entrepreneurial” principles. Like aid donors, they too are fond of social enterprises (especially if fully business ones) and have spearheaded “social impact investment” to sustain them and seek social benefits and financial returns. 
 
Meanwhile the “traditional” U.S. foundations, even when not fully subscribing to the technocratic paradigm, have modified their modus operandi and show less appreciation for local contexts and actors. Operations have been centralized in headquarters and, with the notable exception of the Open Society, field offices have been closed or reduced to logistic hubs. 
 
Most revealingly, of the many Ford Foundation offices in Southeast Asia only the Indonesia office remains open. With these and related changes in philanthropy, CSOs are at risk of becoming the “orphans” rather than being the “darlings” of international foundations as they used to be in the past.
 
The limits of local benefactors
 
Confronted with diminishing international resources, civil society has placed high hopes on being able to tap into home-grown philanthropy. At first sight, such hopes seem justified….observers agree that the Southeast Asian philanthropic sector has undergone robust growth in the last two decades, driven by the fast accumulation of wealth, greater societal pressure for corporate accountability, and a slightly more conducive policy environment. 
 
These new funding opportunities, however, have yet to translate into regular and sustainable support to civil society….home-grown philanthropy at this stage of its development is generally not inclined towards social change approaches—and refrains from becoming involved with CSOs, especially if advocating human rights.
 
Home-grown philanthropy is dominated by family corporate foundations and, even more commonly, corporate giving programs operated through informal or corporate channels. The number of independent private foundations, albeit increasing, remains relatively low. Intermingling of business interests and philanthropic objectives is rife, with giving tied to the family business and directed at enhancing its scope and reputation. The inclination is to work to advance social causes perceived as non-controversial and to support governments’ agendas in order to avoid potential conflicts that may eventually affect business interests. 
 
In carrying out their missions, corporate family foundations mix grant-making with direct implementation and fundraising for their own program, thus reducing funding opportunities for resource-poor organizations. When they provide finances externally, they rarely consider proposals, and their preference is to give at their will to those they personally know in academic, business or government circles. They generally mistrust non-profits, which they perceive as not transparent and accountable, and have enthusiastically adopted venture philanthropy with its emphasis on social enterprises and impact investment. 
 
The same giving and beneficiary pattern also characterizes the region’s faith-based institutions, albeit for different reasons. These precursors of institutionalized giving in Southeast Asia are far more numerous, and with greater resources and reach, compared to corporate initiatives. 
 
In their charity, faith-based institutions prioritize religious deeds and alleviating the suffering of the poor, the sick, orphans, migrants and other vulnerable groups. They also contribute to community development, provide humanitarian aid, deliver health, education and welfare services, and undertake relief programs. But their humanitarian approach is often sectarian and rarely strives for structural change. Like their corporate counterparts they rarely engage in policy discussions and human rights issues and privilege NGOs that deliver services, rather than advocacy organizations.
 
Southeast Asia needs civil society, and civil society needs support
 
The collective dismissal of the advocacy function of CSOs has far-reaching consequences, since there is no doubt that the upholding of humanistic and social justice ideals is still very much needed today. With the strengthening of fundamentalist and nationalist discourses, curtailment of basic freedoms, and growing socioeconomic disparities in the region, questions of equitable, inclusive and democratic development are even more pressing.
 
If democratic regression and the undermining of civil society is to be halted, it is to be hoped that individual and institutional donors, both local and international, see the wisdom of ensuring more bold and socially- engaged funding. 
 
The author was a Ford Foundation program officer in Jakarta and Manila from 1993 to 2000, teaches at Mahidol and Chulalongkorn universities in Thailand and is founder and director of SEA Junction, a cultural center in Bangkok that fosters understanding and appreciation of Southeast Asia. She formerly was regional director for Asia of the Rockefeller Foundation, based in Bangkok, and of the International Development Research Centre (IDRC), in Singapore.

 


 

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