Development cooperation appropriations
According to the Government’s budget proposal, the appropriations for development cooperation will be subject to EUR 200 million cuts annually beginning in 2016 as a part of the general government adjustment measures. In addition to this, EUR 130 million of grant aid will be converted into loans and capital investment and channelled to the developing countries through enterprises committed to corporate social responsibility.
Development cooperation appropriations consist of the exclusive ODA budget item administered by the Ministry for Foreign Affairs and other development cooperation funding. The cuts are directed at the exclusive ODA budget item administered by the Ministry (EUR 330 million) and the increase will be targeted at loan and capital investments (EUR 130 million).
In 2015, the development cooperation appropriations in the Budget amount to EUR 1012 million. The share of the exclusive ODA budget item administered by the Ministry for Foreign Affairs is EUR 785 million.
The cuts will apply to the appropriations reserved for the exclusive ODA budget item of the Ministry in 2016, amounting to approximately EUR 815 million. After the cuts, the 2016 exclusive ODA budget item will be approximately EUR 485 million.
The Ministry for Foreign Affairs is preparing the targeting of the savings as part of the budget proposal and the general government fiscal plan on the basis of the government's guidelines.
The new government has also decided to stop the channelling of revenue from emissions trading into development cooperation, which will result in a considerable reduction of funds available for development cooperation. In 2014, for example, the amount of emissions trading revenue channelled into development cooperation was EUR 69 million.
The Ministry for Foreign Affairs is responsible for Finland’s exclusive ODA budget item
Development cooperation appropriations are divided into the exclusive ODA budget item administered by the Ministry for Foreign Affairs and other development cooperation funding. The Ministry for Foreign Affairs is responsible for the exclusive ODA budget item.
In statistics, other development cooperation funding includes costs arising from refugee reception, Finland's share of the EU development cooperation budget, and other disbursements counted as development assistance in various administrative sectors.
The 2015 development cooperation appropriations amount to EUR 997 million, accounting for 0.48 per cent of Finland's gross national income (GNI). Finland is committed to raising the share of official development assistance to 0.7 per cent of GNI.
The appropriations under the exclusive ODA budget item administered by the Ministry for Foreign Affairs are designated to nine budget allocation table lines:
- Multilateral development cooperation
- Country-specific and regional development cooperation
- European Development Fund
- Non-country specific development cooperation
- Humanitarian assistance
- Planning, support functions and communication of development cooperation
- Evaluation and internal audit of development cooperation
- Support to development cooperation conducted by civil society organisations
- Concessional credits
In development cooperation, the amount of the appropriations allocated for a given year differ from the funds actually used (i.e. the disbursements), because the appropriations are “deferrable appropriations”. This means that if for some reason not all the allocated appropriations can be used in the first year, they are still available in the subsequent two years.
As development cooperation often takes place in difficult circumstances, it is important to have a flexible timeframe for the use of the appropriations. On the other hand, it takes years to achieve lasting development results, and a long-term commitment to cooperation is therefore needed.
During the Finnish government's term of office 2011–2015 it was decided that auction revenues obtained from the Emissions Trading System will be channelled to development cooperation and climate funding. This has increased funds available for development cooperation; in 2014, for example, this increase totalled EUR 69 million. The new government has decided that revenue from emission auctions will no longer be directed to development cooperation.
How were development cooperation funds used in 2014?
The Finnish official development assistance actually used (i.e. the disbursements) amounted in 2014 to EUR 1.232 billion, or 0.60 per cent of GNI. The amounts of bilateral cooperation assistance and multilateral cooperation assistance were EUR 716 and EUR 516 million respectively.
During the government term 2011–2015 appropriations have been allocated in particular to:
- international organisations: of UN bodies particularly UNFPA (Population Fund), UNICEF (Children's Fund), UNDP (Development Programme) and WFP (World Food Programme);
- development cooperation conducted by civil society organisations;
- support to fragile states;
- development of taxation and the private sector in developing countries.
Statistics on Finland's development assistance disbursements in 2014:
- Development cooperation statistics 2014, Part 1 (in Finnish) (pdf, 35 Kt)
- Development cooperation statistics 2014, Part 2 (in Finnish) (pdf, 25 Kt)
The chart below shows the distribution of Finland's bilateral development assistance into different sectors. In 2014, the most important sectors receiving development aid were humanitarian assistance, agriculture, forestry and fishing, governance and civil society, as well as education.
"Other sectors" includes many areas, such as funding related to climate protection, while "unspecified" covers horizontal aid, targeting different fields of activity.
Development cooperation disbursements 1990–2014
In 2014, Finland's development cooperation disbursements increased by approximately EUR 150 million compared to the previous year. In the longer term, development cooperation disbursements have doubled from EUR 600 million in the early 1990s to EUR 1.2 billion in 2014.
The share of development assistance of GDI reached the 0.7 per cent level in 1991, but it dropped to 0.3 per cent in just a few years. Since then, the share of GDI has grown slowly to reach 0.6 per cent in 2014.
Disbursements to main partner countries
In 2014, development cooperation disbursements to Finland's long-term partner countries (Ethiopia, Kenya, Mozambique, Nepal, Tanzania, Vietnam, and Zambia) amounted to EUR 186.5 million, which was EUR 23.3 million more than the year before. The largest recipient was Kenya largely due to increased Finnfund financing.
Disbursements to the largest recipient countries
The 10 largest recipient countries or regions of Finnish development assistance in 2014 were Kenya, Tanzania, Ethiopia, Afghanistan, Nepal, Zambia, Mozambique, Somalia, Vietnam and Iraq, who received a total of EUR 245.9 million.
Statistics on the use of development cooperation funds
The Ministry for Foreign Affairs maintains a database of Finland's development cooperation statistics, which contains data and information on planned and committed appropriations as well as disbursements. Click the link below to examine the development cooperation statistics of Finland.
Official Development Assistance (ODA) is monitored on the international level through the reporting of the member countries of the OECD Development Assistance Committee (DAC). The statistics showing the OECD/DAC member countries' development cooperation funds are available on the DAC website.
Finland promotes the international transparency of development cooperation
Committed to the promotion of the transparency of development cooperation, Finland also supports this objective internationally. Finland is one of the founders of the International Aid Transparency Initiative (IATI).
The purpose of IATI is to assemble and publish development cooperation information in an easily accessible and comparable form, and more than 130 development cooperation actors from government donors to foundations and NGOs have committed to it. The aim is to create a common open standard for different development actors. When the various parties report their data in a common form, they are easier to compare and the flow of information becomes more transparent.