How the Charter4Change is strengthening national and local humanitarian organisations

CAFOD partners delivering aid in the Philippines

By Anne Street, Head of Humanitarian Policy at CAFOD.

 

In June of this year the Start Network officially endorsed the Charter4Change, an initiative signed up to by 29 INGOs, including nine Start members. The Charter4Change is an exciting step towards which aims to make a reality the recent World Humanitarian Summit’s aspirations to strengthen the role of national and local organisations in humanitarian preparedness and response work.

The Charter is a series of eight commitments – also endorsed by more than 125 national/southern based organisations – which pledges its signatories to change the way they work with and relate to national actors. This includes passing 20% of humanitarian funds directly to national actors, including our partners in project design and decision making, introducing our partners directly to our funders and ensuring that we highlight their work and role in our communications.

What would ‘thinking small’ look like in global value chains?

The challenges I face are obviously affected by being a small business. Middlemen buy my product and sell it to the big company. They impose their price. (Jose Luis, Nicaragua)

Big business only rarely listen to our needs because they don’t need us (Abdul, Afghanistan)

Whilst it is never as simple as “big” versus “small”, small businesses do describe a view that they are often exploited in their supply chains. The above two views were expressed by small business owners that we talked to in our (second) Think Small research that’s currently underway (see our first Think Small research here). The question is, can Global Value Chains (GVC) ever be beneficial?

The promotion of GVCs has become a hugely popular approach to enterprise development and one which is becoming a bigger focus for donors. The argument for inserting small businesses into GVCs is that this will help them to develop as businesses and thus provide jobs and benefit the economy overall; and ultimately, be good for poverty eradication.

But, given the views of small and micro enterprise (MSE) owners, we think this enthusiasm needs some tempering. It is clear, that the lived experiences of small businesses in GVCs are not automatically positive. Fairtrade research, for example highlights how value does not reach the ‘bottom’, stating;

“…there is clear desire among some to get more value out of their product. From experience, this desire comes from producers’ experience of long-term declining farm gate prices, their sense of powerless in the face of this decline, and, for those with access to the information, a painful knowledge of how their income represents an ever smaller fraction of the final retail price.”

So the question should be how can GVCs be made to benefit MSEs (who generate most of the jobs and a significant proportion of the GDP of developing countries)? Our research has highlighted 3 things that are important to consider towards this end;

1) POWER

The relative power in GVCs can determine whether these will be a negative or positive experience for MSEs. All too often, small business’s lack of voice and power leads to market marginalisation or unfavourable terms on which to do business.

In Zambia small businesses often found that they had to do business on poor terms because they needed customers and had limited options. They were also in a precarious position when things went wrong as they lacked resources, (especially financial) skills and expertise to enforce contracts when agreements were broken. Ultimately, their lack of political, social and economic power kept them trapped in this weaker position.

It’s essential to consider voice and power when inserting MSEs into GVCs to avoid exploitative relationships. Initiatives which seek to improve the bargaining position of MSE suppliers, to reinforce their rights to land and water or to tackle social and political exclusion rather than simply ‘integrating’ them into supply chains have lead to greater benefits for those participating in these GVCs.

2) RISK & VULNERABILITY 

Being included in global markets and supply chains can result in higher risks for MSEs (as the example from Zambia highlights). MSEs are often the most risk sensitive and vulnerable and short term risks can have long term impacts for them. Unfortunately, in some cases, buyers are able to pass risk down the chain, so that the MSE can bear the majority of risk in the bad times, whilst reaping a smaller portion of the gains in the good times. (Vorley & Fox write an interesting, if slightly dated, paper on this).

Initiatives which consider risk and vulnerability, on the other hand, can mean that GVCs can have a much more positive impact on MSEs. There are various activities which could help people cope with risk and so mitigate their vulnerability, for example;

• Social protection schemes can provide a safety-net when times are difficult.
• Macro-economic policies can reduce risk and decrease vulnerability of small-scale traders and businesses. Small scale producers and traders in our research talked about the importance of price stability as a tool to help in managing and planning their finances.

3) SUPPLY and DEMAND
Demand is a key consideration which is often neglected in livelihood development programmes but which our research found is a major issue for many MSEs. GVCs can potentially be a really good mechanism in addressing this demand challenge by providing stable and good buyers for MSEs (provided issues of risk and power have been addressed!).

However, GVCs are not the only solution and other, often more appropriate options, should not be neglected.

Focussing on local and regional markets can bring more widespread benefits. MSEs often produce goods and services that are more locally appropriate and are better able to compete at a local than global level. Inserting small businesses into global markets requires intense efforts to meet standards and other demands, and only benefits a small proportion of MSEs. Improving access to and conditions in local and regional markets is more likely to have more widespread benefits more easily. A critical problem in many of these is a lack of demand – quite simply it is harder to sell when most of your customers are poor. Again, social protection can be a way of injecting cash and boosting demand in these local markets. [See footnote: 1] 

Another useful tool in this regard would be encouraging countries to use public procurement to support local businesses or encouraging countries or localities to develop trade and investment strategies that support MSEs and have a local and regional focus and which prevent enclave development.

Supply issues are also a major concern for small businesses. The supply constraints that most MSEs face can make it difficult for them to be inserted into GVC as they can’t provide the goods or services in sufficient quality or quantity to meet the demands of the buyer. Helping MSEs to meet these supply constraints requires comprehensive and proactive support, based on local needs and context. This is often inadequate or neglected in favour of size-blind policy reforms.

These three considerations are essential to making sure that the effects of GVC are positive for small businesses.

With these three considerations in mind, the role of Government can’t be ignored; government needs to play a proactive role if we’re going to see GVCs being more positive for MSEs. They need to play an important role in guiding national development and trade and investment strategies so that MSEs are able to benefit. They also need to play a role in supporting MSEs and facilitating discussions between big and small business to ensure that MSEs are not marginalised.

And so we come back to the voice of a small scale entrepreneur…

Those representing small-scale fishing to the government are the big companies, not us fishermen… and that’s when the fisherman loses. (Edmundo, Nicaragua)

For GVCs to work for small businesses there needs to be change around the three issues raised here. The role and contribution of MSEs in these systems needs to be valued and rewarded fairly. Power, risk and vulnerability need to be addressed and strategies to include them fairly need to consider issues of supply and demand. The benefits of GVCs may not be automatic; but with some work and careful consideration the benefits can be there.

——

[1] These can be beneficial because that injection of money into local markets is likely to stay within that local economy – through people buying local goods and services.  These transfers can stimulate and support the local economy during difficult times and also have significant multiplier effects – the cited Malawian study for example, found that for every $1 transferred; at least an extra $2 was generated within that community. (Davies, S & Davey, J. 2008. “A regional approach to estimating the importance of cash transfers on the market: the case of CTs in Malawi.”)

A day in the life of an advocacy accompanier

As an Advocacy Accompanier, I probably have one of the strangest named, but most interesting jobs in CAFOD. I support CAFOD’s partners to do advocacy on issues like children’s rights, economic justice, land grabs, extra-judicial killings and climate change and in the last year I’ve worked in six different countries. But how can you be an expert on so many different places and issues, my friends often ask me? The short answer is that I’m not. And nor do I need to be. The local organisations on the ground have a wealth of knowledge gained from the work that they do every day that is different from mine. My role is to support them think through the how of advocacy and together we grapple with questions such as: How can you make sure that your land grabs report lands you in the Minister’s office and not in jail? How can make the public buzz about budgets? Why would a sceptical politician choose to attend Stakeholder Dialogue meeting at your community centre and not steak barbecue lunch at the 5* hotel corporate lobbying fest ? I ask these questions because effective advocacy always requires a strategy: it’s not enough to be passionate about a cause, to publish a lengthy report or spend your time convincing those who already agree with you.

The kind of support I give varies: workshop facilitator, mentor, critical friend, sounding board, or researcher – everyone has different needs so there is no one size fits all approach to this job! Perhaps it would be a lot less work and cheaper to run a generic advocacy course in order to disseminate a CAFOD approach to advocacy. However, I suspect that this would be ineffective, out of touch with local reality and risky in the long-run.

So, why this word accompaniment in my job title?

Are policy wonks in NGOs a good thing?

Definition: a person who takes an obsessive interest in the minor detail of policy

The etymology of the term wonk is a derogatory one used to refer to geeks, but it sometimes seems nowadays to be a badge of honour within development circles.  Undoubtedly we need wonks in the world, including development wonks, but are NGOs the right place for people to indulge any wonkish tendencies?

I’m not sure they are for three reasons:

1)      Most NGOs even sizeable ones like CAFOD have relatively few policy or research staff.  We can’t afford to have people who get too immersed in the detail even if those we are trying to influence have hoards of experts.  We are not an academic institution, we are an NGO – the two things should not be confused, although of course we work closely with academia, and I am not arguing that academia is full of wonks (oh dear have to be careful here)!

2)      The purpose of NGO policy and research is to make a difference to the lives of people living in poverty.  By working with our partners we have direct access to those people and our added value and indeed primary duty is to bring their experiences and voices into the policy debate and corridors of power – to show how policies and practices impact their lives and what change is needed as a result.

3)      People who are too immersed in the detail can fail to see the bigger picture.  At CAFOD we believe that it is not just policy that can be at fault but the values, the principles and the beliefs that inform that policy.  Our deep and living roots in the Catholic faith mean we take seriously Catholic Social Teaching and Gospel Values in informing our policy and advocacy work and we have an excellent Theology team who helps us to do this. And we believe there is a fundamental shift in worldview that is needed by those in power.  Most other NGOs I know have a strong sense of values and principles that inform their work whether that be a Rights Based Approach or an implicit belief system.

I hope I haven’t stirred up a hornet’s nest.  Views and comments as ever are welcome, particularly from self-confessed wonks.

The best job with the “worst” job title

Recording a discussion on advocacy

We are currently recruiting for a new Advocacy Accompanier. When one donor representative heard the job title her reaction was ‘Wow that is possibly the worst job title in the world’.

So when we came to put together the job description for this post we thought long and hard about it.

It goes without saying, we cannot compete with Peace Dividend Trust’s groundbreaking job descriptions (“Ability to quote entire episodes of Arrested Development from memory”).

We went through lots of possibilities – advisor, facilitator, capacity building officer – but as Rosalind Eyben argues, labels have power.

We eventually came back to “Accompanier” after reading a post by Paul Farmer in Foreign Affairs:

Reflect, for a minute, on the limits and the potential of the activity that used to be called “charity” or “foreign aid” but that I prefer to call “accompaniment.”

Down to the letter

A question “who should we send our letter to?” is a hardy perennial for policy wonks.  Barely a day goes by when NGOs don’t send a letter to the government, donor institutions, businesses or other key players in the international development arena – aiming to influence all sorts of different things.  The question of whose name to put at the top of these letters is arguably at least as important as what we actually say in them.  Who signs them is important too, but more of that another day.

This week I was set the task of collecting a bit of intelligence, on behalf of the NGO group CAFOD were writing a letter with, to investigate who our target should be.  We were writing to DFID, and weighing up whether to send it to the Secretary of State, or to the senior civil servant who was actually delegated to lead on the issue.

I pinged off an email to a good contact of mine within DFID, who replied quickly saying we should speak on the phone (writing stuff down is kryptonite for political intelligence).