Assistant Under Secretary at the Swedish Ministry of Foreign Affairs Lennart Båge will play a central role in the long overdue reform of the International Fund for Agricultural Development (IFAD).

As reported in DT 3/94, Båge will co-chair a special committee set up by IFAD’s Governing Council whose job is to break the deadlock in the replenishment negotiations.

This was prompted by an offer for funding by Saudi Arabia in autumn 1993 that was so low that Western aid officials interpreted it as a proposal to close down the agency entirely.

At the root of the problem is IFAD’s unique voting and funding structure. IFAD has three member categories with equal voting power: OECD countries, OPEC countries and non-OPEC developing countries. OPEC and OECD donors are supposed to provide 50 per cent of the funds each. But in past years, OPEC has contributed only half its share, while maintaining its full voting power.

Western donors have lived with the situation. But after the breakdown in funding negotiations in 1993, the pressure for change has increased.

March 13, 2009

© Copyright Development Today AS

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Nordic exports drop in African aid market

DT 3/92 reported on the dramatic decline in Norwegian exports to African aid markets.

Development Today’s cover story in January 1992 was about the uncertain fate of the giant hydropower project in Kashmir, Uri Dam.

An exclusive interview with Lars Wahlund, the Swedish diplomat who was expelled from Mozambique in December 1991, was on the cover of Development Today in February 1992.

Economists at Sida argue in a report entitled “Debt Trap" that the only solution for the poorest countries is total cancellation of bilateral debt. (See DT 4/92)

Copenhagen, UN city

The UN Development Program (UNDP) considers expanding its presence in Copenhagen, UNDP Administrator William H. Draper III said in an interview with Development Today 15 years ago. (See DT 5-6/92)

In April 1992, Development Today reported that following Vietnam’s withdrawal from Cambodia, Danida decided to return to Vietnam, which had been the second largest recipient of Danish aid during the late 1970s.

Drastic cuts in Finnish budget for 1993

Decline was expected, but few anticipated that it would be so drastic.

These were good times for Danish companies in the aid market.

Vietnam, Laos and Nepal were on the travel agenda of Director General Per Grimstad of Norad for his Asia tour in June 1992. (See DT 11/92) Though not priority recipient countries, the three were of interest to Norwegian hydropower and oil companies.

Eritrea, about to become a recipient country for Swedish development aid, strongly criticises Sweden’s past record in Ethiopia and its current behaviour, DT 12/02 reports in July 1992.

Four Danish companies were invited by Danida to tender for a diesel engine for a SONABEL power station in Burkina Faso.

No Norad contract for ABB in Tibet

A Norwegian subsidiary of ABB, Elektrisk Bureau, came under fire for its application to Norad for a mixed credit for deliveries to the Yang Zhou Yong hydropower plant in Tibet. (See DT 14/92)

In a re-shuffle of the government of Gro Harlem Brundtland, Greta Faremo was promoted from Norwegian Development Minister - widely viewed as a low-status post - to Minister of Justice, DT 16/92 reported.

Four major Finnish NGOs - Red Cross, Service Centre for Development Cooperation, Finnish Committee for Unicef and Finnchurchaid - criticised the cuts proposed in the budget proposal for 1993, and launched a campaign to bring Finnish aid back up to the level of 0.7 per cent of GNI by 1996. (See DT 17/02)

While the Nordic countries are often considered to be in the forefront on environmental issues, they lag far behind in the World Bank, according to American environmentalists.

Reflections on Danida’s demise

In May of 1991, the independent Danish aid agency DANIDA ceased to exist. Instead, the Danish Foreign Ministry took over responsibility for Danish development assistance, reducing “Danida" to a name on a letter head.

Denmark aims for 1.5 % of GNP aid level

As part of an agreement supported by seven of the eight parties in Parliament, Denmark’s aid is scheduled to reach 1.5 per cent of GNP before the year 2000, DT 22/02 reports. This is part of Denmark’s response to the Earth Summit in Rio de Janeiro six months earlier.

Social Democrats take helm in Denmark

DT 2/93 reports that the new Social Democrat coalition government in Denmark strengthens the aid portfolio by reinstating Danida as an automous agency.

Sweden, Japan join forces

In January 1993, Development Today reported that Japan and Sweden decided to collaborate more closely in international aid.

A special report in the February 1993 issue of Development Today reveals that a Norwegian aid-financed contract to ABB Nera will benefit a Pakistan Army-controlled organisation known to be involved in transporting weapons and drugs.

FINNIDA chief suspended from WIDER case

FINNIDA’s Director General Benjamin Bassin was accused of bad behaviour during a lunch with a candidate for the job of WIDER Institute Director.

Foreign Minister Thorvald Stoltenberg writes a letter to the Indian government asking for assistance to recover a shipment of Norwegian heavy water that ended up in the hands of the Bhabha Atomic Research Centre, a key institution in India’s nuclear weapons programme. (See DT 6/03)

Alcatel Telcom Norway has lost contracts in China worth NOK 200 million as a direct result of OECD’s new consensus regulations on mixed credits - the so-called Helsinki Package, DT 7-8/93 reports.

A committee headed by former Minister Göran Persson calls for a larger proportion of Swedish development assistance to be conditional on recipients buying Swedish goods and services.

The Swedish business aid agency BITS and Norad have taken opposite stances over a hydropower project in Chile. What seemed to be “no way!" in Norway was “no problem!" in Sweden. (See DT 9/93).

SIDA forces consultants to cut fees

In January 1993, the Swedish International Development Authority (SIDA) cancelled all its framework agreements with consultants in an attempt to lower consultant fees. (See DT 11/93)

FINNIDA has agreed to provide USD 5.6 million in support for a planned World Bank forestry programme in Laos. SIDA and environmentalists are critical of the approach. (See DT 12/93)

The Danish govnernment is alarmed over the record low rate of return on bilateral aid, and has mobilised its ministries to find ways of increasing procurement in Denmark. (See DT 13/93)

A consortium of Nordic companies has signed an agreement with the government of Laos to build a hydropower plant at an estimated cost of USD 270 million. (See DT 14/93)

As the third largest individual donor to UNDP, Denmark provides 10 per cent of the agency’s budget. (See DT 15/93)

Heavy criticism of a Norconsult study of the Nam Theun 1/2 hydropower project in Laos has forced NORAD to concede its mistake in relying on a feasibility study made by a company seeking further contracts in the project. (See DT 17/93)

UN agencies must take a stand on Nordic UN reform proposals by November 1993 or face more funding cuts. (See DT 18/93)

Sweden is providing development assistance to Lithuania that is helping to keep the Ignalina nuclear reactor alive for the time being.

Denmark is ready to put DKK 135 million into the creation of trust funds administered by international finance institutions. (See DT 1/94)

Multi-millions in Danish aid spent on grain silos - 32 storage and drying projects in 18 different countries - are criticised in an evaluation. (See DT 2/94)

After just losing the Finnish presidential race, Elisabeth Rehn is aiming for the post of Director General of UNICEF. (See DT 4/94)

Thai food master plan to rescue Finland

In a parody of Finnish forestry aid to Thailand, Thai environmentalist Witoon Charoen proposed a “food master plan" for Finland at a seminar in Helsinki. (See DT 5-6/94)

The ABB concern is the undisputed champion of the commercial aid league in Norway. During 1986-1992, ABB companies received 51 per cent of NORAD mixed credit grants and 45 per cent of parallel financing grants. (See DT 7/94)

The Asian Development Bank (ADB) procured goods and consultancy services worth more than USD 3.5 billion in 1993, a large part of this in areas where Nordic firms have technology and expertise.

Meat and dairy producers in Denmark are up in arms over a decision to shift food aid to WFP from cheese and meat products to wheat and peas. (See DT 9/94)

Denmark reported the highest aid level - 1.03 per cent of GNI - among OECD countries in 1993, while other donors’ development assistance fell by an average of 10 per cent. (See DT 10/94)

Approval from the Norwegian Agency for Development Cooperation (NORAD) for mixed credits to Kværner and Norconsult for the Pangue Dam in Chile has been delayed for months.

OECD steps up fight against corruption

The OECD Council of Ministers has agreed on measures aimed at curbing the growing practice by Western companies of bribing public officials in Eastern Europe and developing countries as part of doing business. (See DT 12-13/94)

Though some say Elisabeth Rehn is destined to lose the battle for the top job in Unicef “because she is a woman and not an American", the Nordics are standing together behind her candidacy. (See DT 15/94)

A report to the Danish Ministry of Foreign Affairs reveals overpricing by 30 per cent on aid-financed contracts compared to prices for the same commodities purchased on the world market. (See DT 17/94)

Major cuts in Norwegian aid to Tanzania

The Norwegian aid budget for 1995 indicates further cuts in aid to Tanzania. During 1992-5, aid has been reduced by almost 30 per cent.

A Swedish-Norwegian aid financing package for the Pangue hydropower project in Chile violates OECD rules for aid disbursement because the project is commercially viable and could have been financed on market terms. (See DT 19/94)

Too many cooks spoil the broth. That is part of why four Swedish aid agencies are being combined into one super-agency, dubbed “Fenix”. (See DT 21/94)

The powerful Finance Ministry has, once again, inflated the estimates for expenses related to asylum seekers in the aid budget for 1995. The “unused” funds are likely to be taken away from the Foreign Ministry later next year. (See DT 22/94)

Sweden drops aid level to 0.87% of GNI

The Swedish Social Democrat government is cutting the aid budget in the 1995-6 fiscal year to 0.87 per cent of GNI, down from 0.93 per cent. (See DT 1/95)

An expert commission appointed by the Norwegian government recommends sweeping changes in Norway’s North-South policy. (See DT 2/95)

Sweden, Norway cut aid to Tanzania

Norway and Sweden have cut aid to Tanzania as part of an international shock treatment aimed at getting rid of widespread corruption and tax evasion in the country. (See DT 6-7/95)

Soft credits worth less than SDR 2 million are exempt from OECD regulations on mixed credits. Ericsson and Alcatel are making good use of this loophole to boost exports to China. (See DT 6-7/95)

Nordic aid financing of Pangue Dam on the Biobío River in Chile was based on assurances that it was a stand-alone project. Now the Chilean utility ENDESA has announced the start of survey work for a second dam, Ralco, to be commissioned in 2001. (See DT 8/95)

In spite of a willingness from the Foreign Ministry to play a coordinating role, Danish firms show little interest in joining forces to better their chances in the emergency relief market.