CMI REPORT
NORWEGIAN NGOS IN POST-TALIBAN AFGHANISTAN
R 2005: 11
phased out in the case of the NAC, while NCA continued to receive substantial funds from this funding chapter during the period 2002–04. During the same period, the transitional assistance or gap funds have gradually increased in the case of the NAC, but fluctuated in the case of NCA. To summarise, the Norad/MFA funding profile for NCA and NAC are comparable, but throughout the period NCA’s budget was bigger than that of the NAC. During the period 2001–04, both organisations have seen their total Norad/MFA funding decreasing, with gap funding replacing (but not fully substituting) the dwindling humanitarian relief funds.12 What have been the implications of this for the policies and strategies of the organisations? The first finding is that this tripartite funding regime provides the organisations with mixed incentives. First, the NGOs have to engage in three separate funding processes of which one is medium term (3-5 years), while the two others are short term (year-by-year). Thus, while the framework agreement requires that the organisations engage in medium-term planning, the gap and humanitarian relief funds do not. This is because of the requirements that apply to these funding chapters; as a rule, the funds are not transferable but need to be spent within 12 months after they have been awarded. This puts the organisations under a sudden heavy administrative workload because the short duration of the funding requires a rapid field deployment and subsequent completion of projects. For this reason, the organisations tend to use them for construction and rehabilitation projects. The reason for this is that construction and rehabilitation projects can be implemented and completed quickly (see below). This especially applies to the NAC, which lacks financial resources to initiate gap-financed projects before such funding has been secured from Norad/MFA. Both NCA and the NAC are highly dependent on Norad/MFA funding, but the NAC more so. The reason for this is that NCA has significant cofunding resources (through, for example, the ACT network) and professional fund-raising expertise in Norway (Appendix 4).13 The NAC, in comparison, has limited cofunding resources and less developed professional fund-raising skills (Appendix 3).14 However, it needs to be mentioned that the two organisations are so different in their size and organisation (see section II) that this difference should neither be surprising nor given too much weight. In order to plan ahead, the NGOs need to know in advance approximately how much funding will be available to them during the next fiscal year. In other words, can the NGOs with some degree of certainty predict how much of the funds they have applied for will be granted by Norad/MFA? The two figures below give a simple overview of this relationship (Figures 5, 6). They show that in most years there is a close resemblance between the total funding applied for from Norad/MFA and the funding awarded (“result”), although for some years there is a considerable discrepancy. For NCA, their biggest budget shortfall occurred in 2003 when the total sum awarded was less than half of that applied for. The main part of the shortfall (NOK 32.3 million, approx. 48%) was the funding for the planned water sector programme. The larger part of the water programme was not seen as being in line with Norwegian bilateral development policy in Afghanistan and was therefore not funded.15
12
It was not the MFA’s intention that shrinking allocations for humanitarian assistance should be compensated by increasing the gap funding. Grethe Löchen, UD, pers. comm., 11 November 2004. 13 The NCA budget overview shows that “own funding” from other donors amounts to 2000 (NOK 4.2 million), 2001 (NOK 10.1 million), 2002 (NOK 16.9 million) and 2003 (NOK 5.9 million), see Appendix 3. 14 The NAC budget overview shows that “own funding” from other donors amount to 2000 (NOK 1.8 million), 2001 (NOK 1.3 million), 2002 (0.9 million) and 2003 (NOK 0.9 million), see Appendix 3. 15 The decision-making process over the ill-fated water programme was complex and the details of this process cannot be entered into here. In short, NCA acknowledges weaknesses in the programme design but maintains that Norad/MFA had signalled that the proposal would be acceptable under the current gap-funding guidelines. Norad/MFA, on the other hand, maintains that NCA was informed early on that a project of this size and type would not be in line with Norwegian policies in Afghanistan.
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