Immediately after the invasion of Iraq in March 2003, Denmark moved fast to announce pledges of reconstruction and humanitarian aid and to position itself to reap potentially huge economic benefits. But initial optimism has been crushed by the reality of the security situation in Iraq. Aid funds remain unspent. All Danish NGOs but one have pulled their staff out of the country. And the expected rush of commercial contracts has simply failed to materialise.
Sweden continues to step up its development assistance through the UN and the World Bank to record levels. In a few years, Sweden has doubled its funding of IDA and UN agencies like UNFPA, UNAIDS and the WFP. Swedish aid is rising by no less than 20 per cent next year. This is impressive, but it’s not quite the 1.0 per cent of GNI that the government claims. SEK 638 million of the budget frame, mainly for Eastern Europe, cannot be reported as aid to the OECD. Moreover, the Swedish aid administration will be hard pressed to swallow this increase. Last year unused Swedish aid funds from earlier aid budgets amounted to SEK 2.2 billion.
A report commissioned by Norway and the UK on Malawi shows corruption has become widespread over the past decade. Politicians and civil servants have destroyed the state’s capacity to make policy. Donors have made matters worse. The report warns against stepping up budget support in Malawi.
The Finnish Ministry of Foreign Affairs has appointed two new officials to handle development policy. Marjatta Rasi becomes the new Under-Secretary of State for Development Policy. She replaces Pertti Majanen, who is now Finnish Ambassador to the OECD in Paris.