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OPINION: Will Some Donors Never Grow Up?

  • John Nicholls
  • 1 July 2010

Private enterprises usually operate on the principle of the smallest amount of energy and funding required to produce the greatest outcome. In striking (and disturbing) counterpoint to this, it seems to me that too many donor organisations – both international or domestic – operate in a parallel but opposite world guided by the principle of the greatest amount of energy and funding required to produce the least outcome.

Kalo and Nina Nathaniel own Malo Lodge on Uliveo Island

Kalo and Nina Nathaniel own Malo Lodge on Uliveo Island, one of the Maskelyn group of islands in Vanuatu. The Nathaniels built the bungalows with basic hand tools using materials found locally (coral bamboo, Natangora palm fronds, coconut palm leaves, pandanus leaves). Cement and handmade bricks are used sparingly, as is local wood. The lodge's menu is based mainly on what can be grown on the island or fished from the water. Electricity is produced at night for a few hours from a small diesel generator... and, thanks to a refrigerator that we donated (actually paid for with clam shells), food can now be preserved long enough for when foreigners come. Helping locals can be this easy.

Precious Resources Wasted

A couple of years ago, a major donor in Vanuatu decided to provide assistance in tourism. The donor sent out requests for expressions of interest in producing (wait for it…) a ‘Pre-Feasibility Study’ on developing tourism to the outer islands of Vanuatu. Even better, the ‘Pre-Feasibility Study’ in question had two programmed follow-ups: a ‘Feasibility Study’ and an ‘Implementation Plan’!

The winning tender went to a consultant company from northern Europe. They assembled a crack team with representatives from all over the world. Unfortunately, all but one had never worked or studied tourism in Melanesia (the team leader had spent a week in New Guinea).

Woman collecting water from her well. Uliveo island village - Maskelyne Isld group - Vanuatu

This is where families collect water while donor consultants sit in expensive resorts composing reports on how to best help the locals. As the sea level rises around Vanuatu, wells like this will be rendered unusable, at which time whole island populations will be without fresh water and deep-rooting trees will die off. The coconut palms are already gone from beach degradation as this small island (Uliveo) shrinks. The immediate needs are obvious: the people need help catching and managing rainwater, harnessing energy for pumps and making bricks for effective retaining walls. Soon the problems will be too big to tackle, but the donors are busy with expensive studies.

As a vital counterbalance to this, I was hired as one of three ‘local experts’. But was our combined 60-plus years of local knowledge valued? No, it was mostly ignored, our function reduced to facilitating the appointments and travel needs of the imported consultants; on many occasions, the local ‘consultants’ were actually excluded from meetings with the very same local people we had arranged. The fieldwork was completed over a two-week period and the 30-odd page document (written by the team leader) was submitted to the client two months later.

The outcome: a report so academic and long-winded that no one could keep awake long enough to read it. It has been shelved with all the other donor-requested studies gathering dust. No follow-up ‘Feasibility Study’ has been commissioned. In any case, the final report would have take its place as something like the 10th or 15th study on the topic in as many years, probably resulting in the same conclusions and recommendations as those that preceded it – predictable outcomes, since each successive study appears to plagiarize its predecessors – a process in which career consultants are experts.

The worst thing about it is the vast amount of the money spent on these multiple re-examinations of the same issues year after year. In the case above: between US$110,000 and $130,000. Sometimes two national donor organisations have conducted virtually the same study only weeks apart – one in English and the other in French – each financed by a different government. Millions of Australian, New Zealand, American and European taxpayers’ dollars are squandered by elitist consultants staying in expensive resorts, being paid salaries nearly equal to the total annual revenue of a small B&B hotel, and travelling and dining like royalty. Meanwhile, the private sector is doing the hard lifting by maintaining and growing the real economy (as distinct from the hypothetical one).

Why Must We Study the Need to Study a Need?

The public sector, including governments and donor agencies, does not generate income. It never has. It doesn’t know how to, so why is it advising on the topic? The public sector only knows how to spend (note I did not say ‘invest’), more often than not with negligible return or total loss.

It almost seems to me like the objective is to spend taxpayers’ money with no sense of how hard it was for the taxpayer to come by the income in the first place. Donors seem to believe that the pot is inexhaustible, and maybe it is, as long as people continue to pay taxes and spending excesses can be hidden in national government budgets.

The airport toilet for all arrivals and departures on an outer island of Vanuatu

This is the airport toilet for all arrivals and departures on an outer island of Vanuatu. Do donors really need multiple studies by consultants costing an average of US$5,000 a week to find out what is hampering tourism development here? Suffice it to say that I don't think it has ever been frequented by a donor. PS: BYO paper...

But that doesn’t change the deplorable ongoing waste of precious resources by some of these donors, all to the detriment (not targeted benefit) of our society, our world. As we’ve learned (and suffered) from the greed of Wall Street, is it not time to question donors about how they are spending our money? Money that, if used wisely, could fix so many problems in the developing world. The unacceptable alternative is the kind of unchecked waste that only delays fixes and pads the pockets of people on the consultant gravy train.

Let’s take a quick look at what could have been done in Vanuatu (as just one example of the world’s many developing nations). The main challenge to starting any tourism business in Vanuatu is the availability of energy. Without energy, there is no communication, no refrigeration etc. The means certainly exist for isolated indigenous operators to generate cost-effective, renewable, earth-conscious energy through hydro, solar, thermal and wind power. In fact, viable micro-systems have been established for as little as US$10,000.

Think of what we could have accomplished with the money that was spent on the most recent Vanuatu ‘Pre-Feasibility Study’. Instead of thinking about thinking about how to help, we could have given a real fighting chance for the long-term survival of a dozen accommodation providers on the outer-island, where a little capitalism and financial reward are the type of hands-on assistance required. But no, it was more important yet again to waste time with interviews and cruel teases about the potential for the possibility of better things to come in the name of research. What improvements were made? The perpetuated reputation of the futility of working with governments and donor agencies. Oh yes, and the ever-growing salaries (with perks) of donor officials and their consultant mates.

All that said, it would be foolish to tar all consultants employed by donors with the same brush. I work closely with a few that really care and are genuinely committed to their missions. Nevertheless, passions are quickly cooled in donor politics and bureaucracy.

Donors that really want to effect change aren’t (and shouldn’t be) afraid of transparency and financial accountability. They must work closely with the local private sector in order to gain the respect and cooperation from the industry they wish to ‘assist’. Until that happens, they will continue to be seen by locals as air-filled soufflés of change.

These guys want to set up a hand-painted t-shirts business

These guys want to set up a hand-painted t-shirts business but can only afford to buy one colour and have no idea what subject matter will attract tourists. WIthout consultation they would have painted their dozen shirts with the wrong design, had no range of sizes and not known where to display their goods or how much to charge for them. But everything will be all right! We have a donor that will spend another $100,000 on a study to find out how to encourage and harness private enterprise in the outer islands.

My opinion is not a new one; the World Bank obviously identified this issue a long time ago in Asia, where the WHL Group was born as a development project of the IFC (part of the World Bank Group). The results are on record for all to see, but let me say this: it would be hard for any donor to find a better return on investment than the WHL Group, now privately owned and operated, but proud of its pedigree. As a recipient of start-up funding from the World Bank/IFC-managed PEP-Pacific (Private Enterprise Partnership – Pacific), I was able to join whl.travel, one of the partner companies of the WHL Group. Thanks to all parties involved, my business, Vanuatu Hotels, is now the leading private support to locally-owned small and medium-sized enterprises in the Vanuatu tourism and hospitality industry.

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John Nicholls

John Nicholls heard of whl.travel in 2004 and instantly knew that it was not only a perfect complement to his operation as a promoter of his beloved Vanuatu, but it reflected his ideological 'eco' approach to tourism. After launching and operating two iconic resorts in Vanuatu, John and his wife Silvana set up the only last-minute online booking service in Vanuatu and now operate the most comprehensive online booking service for the destination: www.vanuatu-hotels.vu.
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Melanesia, Oceania, opinion, personal experience, poverty, Vanuatu,

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