Two sides of one medal?

‘Has the focus on democracy and civil society ignored the challenge of poverty?’ This was the question posed at the opening plenary at the recent Grantmakers East Group (GEG)[1] meeting in Moscow. Interestingly, both speakers at the opening plenary seemed to feel the dichotomy was a false one – as did others later in the conference. They are what Russians call ‘two sides of one medal’, said Elena Topoleva of the Agency for Social Information. ‘Without an active citizenry, the increasing wealth of the country will not reduce poverty.’

Introducing the opening session, Craig Kennedy of the German Marshall Fund urged GEG delegates to be self-critical. During the 1990s, he said, funders became ‘very self-congratulatory’. There was always new money available; in CEE/NIS countries the ‘philanthropic enterprise’ was so new that conferences were rarely critical. The aim of this meeting was to look critically at what public and private funders have done over the last ten years. His remarks set the tone for the rest of the conference.

Promoting democracy or combatting poverty?

Michael Edwards of the Ford Foundation opened the session by claiming that the dichotomy is based on ‘a complete misreading of civil society theory’. While the model of ‘civil society as associational life’ underpins the belief that a thriving third sector is crucial to democracy, the ‘civil society as the good society’ model brings the focus on eradicating poverty. ‘Civil society as the public sphere’ is yet a third current model. The ‘false separation of pro-democracy and anti-poverty strategies’, he says, is one consequence of the failure to understand the complex relationships between these three models.

Andrey Kortunov of the Open Society Institute–Moscow started by looking at ‘the new face of poverty in the information age’. The gap between the haves and the have-nots is getting larger amidst ‘a wave of rising expectations as Western lifestyles are shown everywhere’. So – a very Russian question – what is to be done? Kortunov looks to a social contract for the answer. Neither state nor market mechanisms can deal with poverty. What is needed is ‘a triangular agreement between the three sectors’. Although still the weakest partner, civil society can broker deals, make bridges. Here again our dichotomy seems to melt away.

Olga Alexeeva of CAF Russia complained not so much about the dichotomy itself as that for Russia the focus on poverty reduction had come too late. In the mid-1990s, it was needed. Now, with growing wealth in the country, what is needed is better public provision, a move from ‘free and bad social provision to good and accessible provision’ and ‘a change in public policy to consolidate this move’.

What role for foreign donors?

People seem largely to agree that in theory Russia now has sufficient resources to solve its own problems. Russian philanthropists now give around $0.5 billion, four or five times as much as private foreign funders. Does this mean that foreign donors can now go home? For a variety of reasons, the answer is clearly ‘no’. The Russian donors are conservative, reluctant to support HIV/AIDS, human rights, women’s NGOs and civil society development. Through partnership with them, international donors can influence and extend their work.

Mikhail Khodorkovsky, head of Yukos, Russia’s second largest oil company and possibly Russia’s richest man, described the situation facing Russian companies. In a traditionally patriarchal society, Russian corporations readily became corporate citizens. In the regions in which Yukos mainly operates, the company provided housing, education and healthcare – ‘the equivalent of US 1920s company towns’. Under the Westernized open market model, as he sees it everyone must be responsible for their own fate. This entails inevitable questioning of the role played by companies. Khodorkovsky describes as ‘incorrect philanthropic activity’ anything that gets in the way of people earning independently[2] or doing the state’s job for it.

It is in pushing the boundaries of ‘incorrect philanthropic activity’ that Western foundations might have a valuable role to play. Khodorkovsky rightly regards provision of orphanages and education as the responsibility of the state. What can he do if only 2 per cent of young people leaving orphanages go on to higher education while many end up in prison in the first year after leaving the orphanage? Yet there are surely possibilities for effecting change that do not involve full-scale alternative provision.

Foreign donors also have a potential role to play in relation to government – what Eurasia Foundation President William Maynes described as ‘pushing the envelope without breaking it’. While foreign donors cannot substitute for government in health or education or poverty alleviation, they can help Russians strive for better public services. They could organize working groups of experts to look at social policy issues – OSI is already bringing together international and Russian lawyers and Russian activists around human rights issues. At the end of a decade Russian NGOs are seen as being much stronger and ‘ready to play a part in public policy-making’. But, as Topoleva pointed out, it will be a long time before Russian donors are ready to support advocacy or civil society infrastructure. ‘The time for exit has not come.’

Finally, ‘How do we get this kind of discussion into a broader arena? How do we get politicians and business leaders talking in these terms?’ asked one GEG participant. It would be a good start if foundations themselves more often engaged in this level of debate!

1 GEG’s mission is to promote the development of civil society in Central and Eastern Europe and the Newly Independent States by bringing funders together to increase the effectiveness of their grantmaking and encouraging new donors to be active in the region. It is currently an independent project within the EFC.
2 He gives grain subsidies as an example: grain assistance from the West destroyed agriculture by demotivating farmers. But in 1999 the subsidy stopped and this year Russia produced 10 million tonnes of surplus grain.