Estimated to cost around Rs 25 lakhs, a project for building check dams to harvest rainwater is being implemented among the tribal poor in Thane district, in Maharashtra. Initially it was proposed that the full cost of the project should be recovered from the villagers who benefit, over a period of 10 to 15 years. But, succumbing to strong opposition from the Academy of Development Science, the project partner, a local contribution of only 10 per cent towards the project costs has finally been agreed upon.
Community contributions to project costs, whether fully or partially, are becoming the norm. These days, such cost-sharing has become conditional in many projects, with funders arguing that sustainability of the development induced by such investments requires financial participation by beneficiaries too. While mostly in the form of cash, such inputs can also be in the form of labour. Eliciting such contributions has been an accepted norm for ensuring a community's ownership towards post-project maintenance of assets. As this view has gained ground, past ideas of 'gifting' development, which most donors pursued till the 1980s, has been done away with. While ten per cent contribution has been widely accepted, many organisations boast of up to 30-50 per cent contribution from poor villagers to establish their skill in mobilizing community resources.
But can the poor and other disadvantaged groups, for whom such projects are designed in the first place, afford additional expenses when they hardly have enough resources to survive? In the case of the Thane project, for example, the ADS became convinced that for poor households, an average of Rs.2500 in labour - the mandatory 10 percent - contributed to the project costs may amount to half of their annual income, an unacceptably high proportion. ADS opted instead to make this contribution itself!
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Leadership by non-believers
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Piped water, or pipe dreams?
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Delhi rethinks water loan
It has been argued repeatedly in recent years that the poor can afford to pay some part of the costs incurred in development projects for their benefit. Possibly true. But the application of such a principle should be more uniform; otherwise it simply becomes a dishonest argument. If the practice of cost-recovery is so noble and effective for the poor, why are financial contributions not sought from urban settlements and exporters for new road projects? Why is it that the poor in rural areas are expected to make contributions towards the installation of pipes bringing nearby water to their homes, but in contrast urban residents never contribute physical labour nor do they share project costs to sustain their water supply. In similar vein, why is contribution not sought when power stations are rehabilitated or millions get spent on reform processes - programmes that benefit foreign investors and domestic industries? In those cases, we hear arguments that the taxpayers must underwrite the costs, in order to promote the overall economy.
The divergence between benefits for the poor and those for the rest is too stark to ignore. Sustainability of systems makes good business sense, but when the onus of sustaining water supply is applied only to the poor villagers and not the urban rich, it is quickly apparent that it is not economic policy that drives these decisions, but politics and vested interests.
Donors may be justified in expecting their financial inputs to be justified - most World Bank loans now have conditionalities attached requiring contributions from beneficiaries - but what about governments? For cash-strapped governments of the developing world, a shift in responsibility from the Treasury to the citizens is often appreciated, especially if as a result the poor become less demanding on the State. Governments are happy to dilute their own repayment obligations by simply passing on that burden to the citizens directly wherever possible (i.e. to the voiceless millions) but itself bearing the costs when more powerful citizens object.
Donors play along; they often do not request government contribution - either for political reasons or to avoid jeopardizing the outflow of funds. This has one benefit; the NGOs who implement a large number of such projects escape the undesired intervention of the government in executing the development programmes in rural areas.
However, in the process the poor are made to believe that the government has little obligation towards fighting poverty; the poor have restricted role in governance; and that self-help is their best, perhaps only option. Shrinking the role of the government in people's lives on one hand, and increasing self-dependence on the other, are the essential pre-conditions for privatisation. World Bank loans have been criticised in recent years for endorsing both of these outcomes through conditionalities that reduce the role of loss-making public utilities on one hand and creating a favorable environment for private sector investments on the other. For resource-crunched governments this offers a win-win situation, but at the incredible cost of pushing the poor even deeper into economic insecurity!
What one witnesses is that the development ideology is promoting privatisation through a short-term goal of fighting poverty. A gullible civil society, represented by the sprawling number of NGOs, has fallen prey to such designs. Development practitioners have to consider people's contributions to poject costs conditional upon a similar financial contribution by the government too (in case of foreign-funded and private investments). Unless the civil society engages the State on such matters, to ensure that development assistance eradicates poverty without encouraging privatisation, poverty reduction programmes will end up creating more poverty!
