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Principles of development policy and development cooperation

Kuva: Satu Ryynänen.Hundreds of millions of people still live in extreme poverty today. Photo: Satu Ryynänen.

The world is undergoing a redivision of wealth and power. The map of the developing countries has changed significantly, and development has taken many new directions.

Some countries with large populations, such as China and India, but also a few of the African countries such as Namibia and South Africa, have raised themselves to the level of middle income countries.

But some of the world’s countries have regressed and are now coping with multiple problems. They have become so-called fragile states. Poverty and inequality are still the everyday lot of much of the world’s population. We can make a difference here through development policy and development cooperation.

The power relationships between the actors on the world political stage have also changed. Development policy and development cooperation are a part of this changing global political environment, and they are changing with it.

What is development policy and why is it necessary?

Development policy is an important part of Finland’s coherent foreign policy and security policy. One of the aims of policy is to continually strive to improve the effectiveness of measures taken, and their coherence with other policy sectors.

The basis for Finland’s development policy is the set of Millennium Development Goals (MDGs) established by the United Nations, which aim at eliminating extreme poverty.

In addition to reducing poverty and inequality, Finland supports the longterm goal of freeing developing countries from their dependency on aid, through strengthening their own resources.

Official development assistance (ODA) and other financial resources for developing countries

Official Development Assistance (ODA) is the public funding provided to developing countries through the Organisation for Economic Cooperation and Development’s (OECD) – Development Assistance Committee (DAC). The aim of this funding is to increase prosperity and well-being along with economic development. ODA donors include 22 member countries and many multilateral organisations.

ODA is defined as those cash flows of which at least one-quarter is donor aid. Changes in the global economy have also affected ODA: its relative share of development funding has decreased to c. 13% (2009). An increasing share of development country cash flows are from other sources of funding. These also come from countries outside DAC, for example the middle-income countries; and the statistics available on such funding are not as precise as those for ODA.

Kuva: Liisa Takala.Extreme poverty is more common in the countryside. Photo: Liisa Takala.

Common goals lead to better results

As a Member State of the EU, Finland is committed to giving 0.7% of its GDP as development cooperation funding by 2015. In addition to public development aid, Finland seeks to increase innovative sources of funding, such as EU Emissions Trading System (ETS) auction revenue, and to divert these funds to development.

Instead of funding many individual projects of their own, more and more development cooperation is carried out as cooperation among donors. Donor cooperation strives to adapt to the development planning of the partner country. This increases the effectiveness and efficiency of aid, and creates an environment in which both donors and partner countries are responsible for the outcomes of development.

Global development aid principles were most recently agreed upon at the Busan Conference in 2011. In addition to official development aid (ODA), best practices for actors operating outside ODA were also approved.

The Development Policy Programme provides guidelines for development cooperation

Finland´s Development Policy Programme

Finland’s new Development Policy Programme provides guidelines for development policy and development cooperation. These new guidelines allow Finland to respond better to the needs of a changing world and an uncertain future.

The basis of Finland’s development policy is that all people have an equal right to affect and participate in both the planning of their development and the activities involved in the implementation of development plans.

Even people who live in extreme poverty have rights, and support should be given to strengthening their ability to work to improve their lives.

Finland’s Development Policy has four areas of emphasis:

1. A democratic and accountable society that promotes human rights
2. An inclusive green economy that promotes employment
3. Sustainable natural resources management and environmental protection
4. Human development.

Three Crosscutting Objectives should be a part of all development activities:

  • Gender equality
  • Climate sustainability
  • Reduction of inequality.
Kuva: Pirjo-Liisa Heikkilä.One of Finland's priorities in development policy is to enhance the participation of women. Photo: Pirjo-Liisa Heikkilä.

Where and how does Finland carry out development cooperation?

Finland concentrates development cooperation in partner countries. Finland’s primary partner countries are currently Ethiopia, Kenya, Mozambique, Nepal, Zambia, Tanzania, and Vietnam.

In future, all development cooperation will be concentrated more and more in the least developed African countries, as well as in the so-called fragile states such as Afghanistan, South Sudan and Palestine.

Finland’s diverse forms of cooperation, such as budget and sector support, as well as cooperation with civil society organisations (CSOs and NGOs) can be part of reducing poverty and equality. Development cooperation is a channel Finland uses in partner countries to, for example, strengthen public financial management, increase the functionality of various government sectors, increase the availability of services, support economic activity, strengthen the civil society, and decrease opportunities for corruption.

Finland further strives to increase the possibilities for private enterprise and public actors to participate in development cooperation, and to strengthen dialogue between the State and business and industry, as well as to develop forms of private sector development cooperation.

Development Policy Committee

The Development Policy Committee set up by the Finnish Council of State comprises representatives from the Parliament’s political parties, lobbying groups, NGOs, and researchers.

The Committee evaluates the coherence, quality, and effectiveness of development aid, as well as monitoring the level of public development cooperation appropriations. It also promotes discussion in Finland of global development questions, and seeks to strengthen the role of development funding coming from outside the public sector. 


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