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    DAI Romania

    The Contribution of NGOs in Reducing Poverty.

    Case Study of the North Vest Development Region in Romania.

    Mihály Emőke, phd

    TABLE OF CONTENT

1. INTRODUCTION………………………………………………………………...……….2

2. THEORETICAL BACKGROUND

    2.1. Who are Romania’s Poor?..............................................................................................4

    2.2. Civil Society in Romania …………………………………………………….………..8

3. RESEARCH METHODOLOGY…………………………………………...…………….10

4. THE CONTRIBUTION OF NGOS IN REDUCING POVERTY

    4.1 Social service provider NGOs in North Vest Development Region

     4.1.1. Bihor county…………………………………………………………..……11

     4.1.2. Cluj county……………………………………………………………...….12

     4.1.3. Maramureş county.........................................................................................13

     4.1.4. Sălaj county...................................................................................................13

     4.1.5. Satu Mare county...........................................................................................14

    4.2 General features of NGOs surveyed…………………………………………………..14

    4.3 NGOs actions to reduce poverty…………………………………………..…………..17

5. CONCLUSIONS……………………………………………………………...…………..21

6. REFERENCES……………………………………………………………………………22

7. LIST OF APPENDICES

    7.1. Appendix 1. Respondent NGOs to questionnaire in studied counties…………………....24

    7.2. Appendix 2. List of interviewed NGO representatives…………………………………...26

    7.3. Appendix 3. Associations and foundations providing social services in Bihor county…..27

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    7.4. Appendix 4. Associations and foundations providing social services in Bistriţa-Năsăud

    county………………………………………………………………………………………….33

    7.5. Appendix 5. Associations and foundations providing social services in Cluj county……34

    7.6. Appendix 6. Associations and foundations providing social services in Maramureş

    county……………………………………………………………………………………….…38

    7.7. Appendix 7. Associations and foundations providing social services in Sălaj county…...40

    7.8. Appendix 8. Associations and foundations providing social services in Satu Mare

    county………………………………………………………………………………………….42

    7.9. Appendix 9. Sate support for NGOs in chief towns of counties through Law 34/1998….44

1. INTRODUCTION

    Reducing and eliminating human poverty has become the urgent task in the world in this new century. In the past a few years, with the economic reform and globalization, the condition of the poverty in Romania has been changed, the problems caused by urban poverty are raising.

    After the transformations of 1989-1991, Romania was in very different situation and developed very different strategies of adaptation to the new economical, social, political and legal environment. Romania was affected by the disintegration of the communist economic system and the collapse of the Eastern market. These led to a dramatic fall in the life standards and the aggravation of social problems. Since 1989, Romania has undergone a difficult transition to new political institutions and a new economic framework. Economic restructuring has lead to social exclusion, and certain regions of the country, such as mono-industrial centers and rural areas, have been hit even harder. The transition increased poverty and the risk for larger categories of people to become marginalized (Zamfir 2001).

    To know what helps to reduce poverty, what works and what does not, what changes over time, poverty has to be defined, measured, and studied. As poverty has many dimensions, it has to be looked at through a variety of indicators: levels of income and consumption, social indicators, and indicators of vulnerability. It is important to find out what the poverty really is and then to take programs accordingly. In related studies, when researchers talk about how to eliminate poverty, they usually refer to the role of the Government (Arpinte 2006, Preotesi 2006).

     Throughout the difficult transition period, Romanian NGOs have provided vital social services with the help of international funding. Over the last decade, civil society organizations have built, developed and maintained a wide range of social services for vulnerable groups. This

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    has been possible with the support of foreign donors and EU programs. It is generally recognized that the social services provided by non-governmental agencies offer higher quality, standards and responsiveness to community needs than public ones. State funding, however, is directed almost exclusively to public social services.

    Nowadays in the context of rapid urbanization an urban NGO sector is emerging, but the nature of NGOs relationships with communities, and the real impact of their work, are little understood. In my research, I approached the subject of eliminating urban poverty from the roles

    1, Romania. Here, NGOs refer to the social of the NGOs in North Vest Development Region

    organizations (associations and foundations) that are formal, non-profitable and involved in pro-

    2poor. I will try to find out what roles do the NGOs play in helping the urban poverties to meet their needs, to combat their poverty.

    In Romania there are researches about poverty as well as poverty reduction, how far poverty is reduced, what are the causes of poverty, the role of government to reduce poverty etc. No research yet to find how the NGOs in Romania perceive the term poverty and what are the factors influencing the NGOs to select poverty reduction programs. It is important to find out what the poverty really is and then to take programs accordingly, so that poverty can be reduced successfully. These studies emerge the question of what right to do the leaders of these NGOs’ have to decide what is the best for these people. The NGOs are active actors to combat poverty in Romania, that is why their ways of perceiving poverty and selecting poverty reduction programs is highly significant in contemporary poverty situation. Poverty should be targeted directly on its roots by overcoming the constraints that gives rise to it rather than treating the symptoms of poverty through welfare transfers. It means listening to the poor and learning from them. Emphasis should be on understanding the needs of the poor and the poverty processes that create those needs.

    Furthermore I will analyze the partnership between NGOs and Local Administration, cooperation, communication with public institutions and between NGOs, the intensity of

     1 North Vest Development Region (counties: Bihor, Bistriţa-Năsăud, Cluj, Maramureş, Satu-Mare, Sălaj) in Romania

    was created in 1998. As other development regions, it does not have any administrative power, its main function being to co-ordinate regional development projects and manage funds from the European Union. 2 Although, nonprofit or non-governmental organizations come under many different names in Romania, including associations, foundations, leagues, clubs, movements, committees, councils or societies, most formally constituted organizations take one of the four main legal forms prescribed by the Law No. 21 of 1924: association, foundation,

    union or federation. In addition, there are other legal forms, such as cooperatives, trade unions and political parties, which constitute the broader section of the Romanian nonprofit sector. These latter types of organizations are not usually associated with the term non-governmental organization, which is the term most commonly used in Romania. The fact that the law does not define the term “non-governmental” is because it was not used at the time the legal act

    was created (Saulean Epure 1998).

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    partnership between NGOs and local administration, available human resources, financial resources

Main Research Questions

    ; How do the NGOs working with urban poor, conceive the term poverty?

    ; How do NGOs select their programs?

    ; What role can NGOs really play in combating urban poverty?

2. THEORETICAL BACKGROUND

2.1 Who are Romania’s Poor?

    Romania embarked on a transition to a market economy after a decade of harsh economic conditions and social distress. Two measures of poverty are currently used in Romania: relative and absolute poverty. The relative poverty measure is based on the methodology endorsed by the Laeken European Council in December 2001. This methodology was developed to allow monitoring in a comparable way member states’ progress towards the agreed EU objectives in the fight against poverty and social exclusion. The absolute poverty measure is based on a national methodology, developed in 2002 by a team including NIS and Government experts, researchers, and World Bank staff, and it is one of the national indicators included in the Poverty and Social Inclusion Monitoring System in Romania. However, while there has been significant progress in absolute poverty reduction, benefits of renewed growth have failed to reach all segments of the

    3 population (World Bank 2007).

    Table 1. Measures of absolute poverty in Romania between 2000-2006.

    Year 2000 2001 2002 2003 2004 2005 2006

    National Poverty 35,9 30.6 28.9 25.1 18.8 15.1 13.8

    Rate (%)

     Source: World Bank 2007:9.

     3 For policy making purposes, the two poverty measures discussed in this report complement each other. The poverty

    profile built using the relative poverty line provides useful information about the relative position of various groups

    against the national standard of living in a society at a given point in time. Absolute poverty, on the other hand,

    measures the number of people who cannot afford a minimum consumption basket. The poverty profiles constructed

    using each of the two methods do not contradict each other. The vulnerable groups identified by the absolute poverty measure are consistent with the ones identified by the relative method (World Bank 2007).

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    Poverty in Romania can be analyzed from a wide range of perspectives: macroeconomic,

     through means of social policy , and individual socio-demographic, and governmental

    characteristics (Dan 2005). From macroeconomic perspective the main causes of poverty are the

    economic recession, the shadow economy and the black labor force market. The most important factor that causes poverty is the economic recession. Conceptually, there are two situations that may trigger poverty. On the one hand an income shock of sufficient strength to push a household into poverty. Income shock may impoverish the households temporary. In the poverty literature, such households are called the transient (or temporary) poor (Teşliuc at al 2001). They would

    escape poverty even without outside help. In this category are included the unemployed who, in period of economic recession, loose their jobs. When economy recovers and employment increase, such individuals would reenter the labor force and may escape poverty. On the other hand, other ousehold would not be able to escape poverty even when economy recovers, because the assets h

    they own do not generate sufficient income to lift them over the poverty threshold. Such household are called permanent poor. Typically, in this category are included the disabled, or poor elderly unable to work, families with large number of children (four or above) (Teşliuc et al 2001).

    Romanian specialists appreciate that more than two thirds out of poor are living in temporary poverty (Teşliuc et al 2003). Unemployment rates have only gradually increased to 8

    percent in 1994, and remain amongst the lowest in Eastern Europe. The decline in employment consists mainly of lay-offs or retirement of (mostly female) blue-collar workers in large state-owned enterprises which were producing textiles, metal products, and machinery. Over one-third of the layoffs, plant closings, and firings have occurred in the Northeast region, which now has one of the highest unemployment rates in the country. The small drop in employment coupled with a sharp decline in output has reduced labor productivity and contributed to a fall in real wages. Romania experienced one of the steepest declines in real wages in Eastern Europe. In 1993, real wages were only 66 percent of their 1989 level (Zamfir 2001).

    From socio-demographic perspective, poverty has been caused by a great deal of factors,

    among which: household dimension and the number of children, the head of the family’s sex, ethnicity, educational level or professional status (Dan 2005). The household size and the number

    of kept children have an important influence on poverty. Earlier studies do not find statistically significant difference in the risk of being poor for families of one, two or three persons, while larger families (five members and more) faced higher risk of poverty. Poverty is further associated with mono-parenting. Families with one parent face higher poverty risk than families with two

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    parents (Teşliuc et al 2003). Another important factor is the age. To the question who ends up

    being poorer, the children, the elderly or the adults, the answer is: by age, the highest risk of poverty is found among children, especially during the adolescent period (15-24 years old). Regarding the gender, female and female-headed households in particular face higher risk of poverty compared to males, due to the higher share of mono-parental households and old widows living on low survivorship pensions that are found in this category. Earlier analyses show that the gender dimension is an important one when speaking about the vulnerability (Teşliuc et al 2001,

    Zamfir 2001). The human capital of a household or the educational level is another important

    factor in the analysis of poverty. The majority of the Romanian’s poor are members of households whose heads are primary school graduates, secondary school graduates or vocational school graduates (Dan 2005). Another characteristics associated with the household’s human capital is the occupation of the household head and participation in the formal or informal economy. The largest groups of poor are employee- and pensioner-headed households. Within the group of employees, households with a larger number of dependants, with only one wage-earner, or with low wages are facing higher poverty risk (Teşliuc et al 2003).

    Poverty in Romania was also influenced by improper measure of social policy, such as

    early retirement (before the entire length of service or before legal age) and compensation payments. In order to create more jobs and to reduce unemployment, the Romanian authorities resorted to retirement. The number of taxpayers diminished and the degree of dependence

    between the inactive population and the active one increased. If in 1990, there were three taxpayers who supported a pensioner; in 1999 the proportion was 1:1. The compensation

    payments given to the dismissed person (especially miners) were another improper social measure taken by the Romanian authorities. Although it was strongly recommended that the money should be invested in private business ventures that would generate new jobs, their owners did not have the proper education level, the money was quickly spent and poverty could not be alleviated (Dan 2005).

    From the individualistic perspective, the most common causes of poverty are: alcohol and

    drug dependence, physical or mental handicaps and diseases, socializing deficiencies (orphans, abandoned children, and elder people), the extent to which the poor exert themselves to enter the labor market and are not discouraged from this by state.

     As we could see, transition period generated not only welfare, but poverty as well, mainly because: the market economy could not fully absorb the existed labor force, which led to a high rate of unemployment; the high-qualified and well-paid labors were backed up by low-qualified

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    and low-paid jobs, which generated poverty; the poor categories (unemployed, old, handicapped

    person, unqualified laborers, single-parented or big families) are more and more ignored because

    of their lack of economic and political resources; the social assistance offered to those in need

    often creates a culture of dependence and by this reduces the individual effort for coming out of

    poverty (Zamfir 2001).

     Regional dimension of poverty. There are substantial differences in the incidence of

    poverty by region. The higher risk of poverty is in the North-East, 47% higher than the national

    average (77% higher rate of extreme poverty as well). This region also hosts the larger number of

    poor (25% of total poor, and 30% of extreme poor). Bucharest, the capital city, enjoys the lowest

    risk of poverty, about one third of the national average. After 1996, regional disparities in total

    and extreme poverty attenuated slightly (Teşliuc et al 2003). Both the incidence and the number

    of poor is higher in rural than in urban areas. Despite a constant trend toward convergence, in

    2002 the risk of poverty was still more the double in rural than in urban areas.

     Community-poverty measures the availability of publicly provided services within a

    community.

    Table 2. Community poverty.

    National Urban Rural

    Non Poor Poor Total Non Poor Poor Total Non Poor Poor Total

     Poverty status

     Total poverty 71 29 100 82 18 100 58 42 100

     Population in the group 100 100 100 100 100 100 100 100 100

    Of which

     Community

     Lack of post office in the locality 6 12 7 - - - 15 18 16

     Lack of health service in the locality 5 11 7 - - - 14 17 15

     Lack of pharmacy in the locality 14 28 18 0 1 0 38 41 40

     Lack of cultural/entertainment center 10 19 13 2 2 2 24 27 25

    in the locality

     Lack of playground for children in the

    locality 36 63 44 7 12 8 85 89 87

     Living in a highly insecure area

    (affected by violence, burglaries, etc.) 2 2 2 3 4 3 1 1 1

    Living in an area with a highly

    deteriorated roads infrastructure 13 17 14 10 7 9 19 21 20

    Source: Teşliuc et al 2003:12

    The measure of community-poverty used here does not take into account potential differences in

    the quality of the services among poor and not-poor neighborhoods, or potential discrimination in

    the access to such services within a certain neighborhood. Still, there is a strong difference in the

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    type of community-poverty by areas of residence. While the rural areas are affected by lack of access to services and infrastructure, urban areas are affected mostly by insecurity.

     Perception of poverty. About half of the Romanian households declare that they cannot

    buy enough food, while two thirds consider that their income do not match their currant expenditures. These percentages are higher for the poor than for the non poor, and do not vary substantially in rural versus urban areas. The dissatisfaction with the current level of consumption is substantial even for the non-poor: 42% of them consider their income insufficient to cover their food needs, and 59% assess that current incomes are not enough to cover current expenditures.

Table 3. Perception of poverty.

    National Urban Rural

    Non Poor Poor Total Non Poor Poor Total Non Poor Poor Total

     Poverty status

     Total poverty 71 29 100 82 18 100 58 42 100

     Of which

     Nutrition

     Could not buy enough food 42 69 50 41 68 45 44 70 55

     Incomes cannot cover current

    expenditures 59 86 67 59 88 64 59 84 70

    Source: Teşliuc et al 2003.

2. 2. Civil Society in Romania

     In Romania, civil society developed historically at a later stage and to a lesser degree than in other East Central or Western European countries. The emergence of civil society in Romania, as in other post-communist countries in Central and Eastern Europe, is the result of a relatively recent social process. The space, created by the post-communist institutional upheaval since 1989, between the market and the state is being filled by this emerging civil society. Until the mid-nineteenth century, there were no significant civil society activities in Romania. Civil society traditions developed at a relatively late stage in the history of the country (CIVICUS 2005, Epure et al 1998).

     In the context of the dramatic changes that Romanian society has undergone to cope with the dynamics of the complex transition process, it has become increasingly clear that the expansion of social and civic movements in general, and the development of nongovernmental organizations specifically, have become important factors in the post communist evolution of society (Saulean Epure 1998).The fall of the Ceausescu regime triggered a growth process in the

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    number of non-governmental organizations (the most commonly used term for nonprofit organizations in Romania), which are considered an essential part of civil society in Romania

    Communism destroyed all traces of civil society and replaced it with party-controlled nation-wide associations of all kind, from women’s groups to professional and sport organizations

    (Pippidi 2002:147). A civil society began to develop in the 1970s and 1980s. In this period, civil society did not have the militant character that was beginning to develop in other Eastern European countries and mainly consisted of outdoor clubs (for hiking and caving), and environmental protection and cultural associations. In some cases, these NGOs had a significant number of voluntary members and were mainly funded by the state or through communist organizations (CIVICUS 2005).

    However, during communism there was no such thing as an independent civic movement. In its recent history, since 1989, two different stages of development of Romanian civil society can be identified. At the beginning, in the early 1990s, civil society had to liberate itself from the legacy of the totalitarian regime and fight to create an autonomous space, outside the state. In the second half of the 1990s the political environment improved and civil society began to have a better profile and play more diverse roles in Romanian society. There is a widespread recognition that the NGO sector has expanded hugely worldwide. Although according to Alan Allen

    (2000:213) this increase is not likely to be the result of a sudden expansion of interest in charity work, or of an outbreak of solidarity with the poor. Furthermore this increase may be largely connected with the decline of the state as an institution.

    In Romania after 1989 a large number of nonprofit organizations were settled in people’s

    will to participate in social life and to influence social policies. They were addressed to different categories of beneficiaries, from those who couldn’t satisfy their basic needs like food, clothes and shelter to those looking for professional fulfillment and self-actualization. In time, factors like foreign financial support, politics, economy, cultural and geographical particularities shaped the dimensions of the nonprofit sector. Even poverty alleviation is not declared as mission for many NGOs, the nonprofit organizations remain involved against poverty and for the observance of human rights. According to Pralong (2004:236) a new, distinctive, socioeconomic category is emerging in Romania: the NGO professional as a “private civil servant”, whose livelihood is directly linked to the amount of international assistance destined to support local civil societies.

    Many NGOs address poverty through market relationships, trying to improve local people’s access to outside income. While recognizing that poverty is not just about money, they know that many resources, from education to housing, can be purchased in the cash economy

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    (Eversole 2003). Thus, finding ways to increase poor people’s access to cash is often a priority in antipoverty efforts. Other strategies for poverty reduction may not involve any income generating component whatever, whether in cash or in kind. Rather, strategies may focus on building up a range of key nonmonetary resources. Thus, NGOs that work in areas such as the environment, education, literacy, health care and so forth may have an antipoverty focus as they seek to improve poor communities’ access to resources, both in the short and long terms.

    The changes that occurred in Romanian in 1989 attracted the attention of international donors, which helped to develop Romanian civil society and the third sector. Grants from foreign donors continue to be the major source of funding for NGOs, which have failed to make strides toward achieving financial sustainability or promoting their programs and public images. Not all NGOs represent grassroots concerns or have been created from the bottom up: the majority actually was not. Yet their very attachment to the West (via both funding and programming) is an asset, for in this way NGOs create local awareness of issues that may otherwise have taken years to bring forth (Pralong 2004:237). Neither the government nor the private sector has so far been able to direct significant financial resources to this sector. As a result, much of the recent growth has been fueled by private and public international support. While this opens the question as to what degree international support accounts for the re-emergence of the sector in Romania, it also leaves the nonprofit field relatively dependent on foreign assistance (Saulean Epure, 1998).

    Limited access to financial resources and the weak economic capacity of voluntary association rational bodies, governments or private foundations, is still extremely high. By contrast, domestic revenue sources, including membership fees, corporate giving, governmental subsidies and contracts, or the establishment of community foundations are not yet feasible financing options for most organizations.

3. RESEARCH METHODOLOGY

    In this research I selected urban NGOs providing social services in the mentioned five counties, having significant poverty alleviation programs. I involved any NGO which are officially registered and had begun operating in 2004 or later because a minimum of at least five years duration is viewed as necessary for significant impact on poverty to have been attained.

    Empirical data was collected by various methods: the first-hand data was collected from field survey: a questionnaire consisting of both structured and open-ended questions was

    developed and administrated both by mail and face-to-face, to gather detailed information,

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