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Logo of Phnom Penh Post newspaper Phnom Penh Post - NGOs tighten belts as crisis hits

NGOs tighten belts as crisis hits

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With donor money being reduced or shifted to projects designed to address the global financial crisis, civil society groups say they are adapting to the new economic climate.

Photo by: TRACEY SHELTON

Children play in the street at Phnom Penh’s Group 78, a community living under the threat of eviction. Cuts to NGO funding could make legal aid less available to evicted families.

OBSERVERS are predicting leaner times for the country's non-government sector following the announcement by several local organisations that they will trim staff and scale back projects in response to funding shortfalls.

Although donors and NGOs disagree as to whether the main culprit is the global financial crisis, changing donor priorities or a combination of both, some have raised questions about the sustainability of a sector primarily dependent on foreign largesse.

"This is a concern - not just for NGOs, but also for other sectors," said Chhith Sam Ath, executive director of the NGO Forum on Cambodia.

"NGOs are heavily dependent on donor funds, so if the donor funds are used up, then it will have a lot of impacts on our operations, in general terms."

While he  said that the NGO Forum, which is reliant on funding from a variety of overseas donors such as Oxfam, would be able to adjust its activities according to the funding it receives, some other groups may be left in the cold.

Sim Souyeang, director of the local anti-trafficking organisation Protection of Juvenile Justice, said Wednesday that it was facing a funding "famine" and that, following the layoff of four staff members in May, it was considering closing its offices in Battambang and Siem Reap.

"The world economic crisis is one reason the donors could not assist us," she said. "Now I am researching how to get funds from relevant institutions to make up our budget [shortfalls]."

Kong Lakhena, secretary general of the Cambodian Women's Crisis Centre, told the Post Monday that it was also holding meetings to try to resolve a shortage in funds, following reports it laid off six staff in Siem Reap province.

Even international groups say they could be affected by the tide of uncertainty.

"We haven't got any cutbacks yet, but we haven't got any guarantees," said John McGeoghan, a project manager at the International Organisation for Migration.

"We may or may not have funding, but the general climate at the moment is ... that funding will be reduced."

Shifting priorities

Brian Lung, regional director of Oxfam America, said the crisis - which tightened donors' purse strings just as the need for development aid was expanding - prompted tough decisions.

THE GENERAL CLIMATE AT THE MOMENT IS... THAT FUNDING WILL BE REDUCED.

"Obviously, the global financial crisis has affected everyone, and Oxfam's no different in that regard. We've had to make some rationalisations of our programmes in order to make sure that we continue to be as effective as we can be knowing that the situation for the poorest is getting worse," he said.

Senior CPP lawmaker Cheam Yeap said he was disappointed with the recent layoffs, saying although some NGOs have "criticised and attacked" the government, most of them provided important services to the people.

Leading donors say they remain committed to the country, but with more donor money flowing into crisis-alleviation programmes, the economic downturn has clearly forced some shifts in priorities.

Fiona Cochaud, first secretary of the Australian Embassy, said Canberra's bilateral development assistance to Cambodia totalled A$54.9 million (US$44.6 million) during the 2008-09 financial year and that the government had "no plans" to reduce the figure.

But she added that AusAID, the Australian government's development agency, would conduct a review of its programs in Asia to "focus resources on priorities emerging from the economic crisis".

The Cambodian Defenders Project (CDP), a local legal aid group, announced Monday that it would be shuttering its provincial offices in Kampong Cham and Kampong Thom and laying off staff because of a shortage of funds from its main donor, the European Commission (EC).

Sok Sam Oeun, the organisation's executive director, said that its decision to make cutbacks was a result of a "change of priorities" by the EC and that funding for legal aid projects was difficult to obtain since it was "unpopular" amongst donors.

But Michelle Labeeu, head of operations at the EC Delegation, said the CDP had stopped receiving funds from the EC merely because the project it was implementing had finished. She said they could submit additional project proposals for funding.

"The EC has over the years been one of the most generous supporters of Cambodian civil society and this will remain the case," she said, adding it had launched new programmes, including food security initiatives, aimed at "alleviating the negative impact of crises".

Others said that becoming financially independent was a vital step in attaining full independence. Yaing Sang Koma, president of the agricultural development NGO the Cambodian Centre for Study and Development in Agriculture, said it was trying to establish an independent base of income from agricultural products to offset donor contributions.

"It's still the beginning, but I think it's important for Cambodian NGOs to think about this," he said.

Lung agreed, saying one of Oxfam's priorities was to help local NGOs establish themselves and build long-term capacity.

"Even when we are tightening the belt, we always have to keep an eye on how those [organisations] can survive," he said.

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