Saturday, January 25, 2020

The end of Nordic aid

Dramatic aid cuts in Finland and Denmark, rumours about tremendous increases in the use of aid funds for receiving refugees in Sweden, a government proposal to reduce aid through civil society organisations by two-thirds in Norway, generalised cuts in support to UNDP, and a move of money from development to relief indicate that the Nordic emphasis on long-term development cooperation may end on New Year’s Eve 2015.     

Lars Engberg Pedersen, Senior Researcher at the Danish Institute for International Studies in Copenhagen.
Photo: DIIS

Nordic aid has been characterised by some significant common features although the differences between the countries’ development policies and practices are not trivial. Nordic aid has been relatively generous and stable for almost 50 years. It has reflected a common emphasis on poverty reduction, gender equality, environment and democratisation in poor countries. A partnership approach has to varying degrees been central. Nordic politicians have, albeit not without exceptions, accepted that a long-term commitment in specific countries is a prerequisite for development results. Moreover, multilateral assistance and the United Nations have received strong, though in recent years declining, support.

The foreign aid given by other countries share some of these characteristics, but the package is Nordic and in one particular way this package has won convincingly. The newly adopted Sustainable Development Goals (SDGs) could easily have grown in a Nordic garden. The SDGs express Nordic values and concerns, and they have been served on a silver platter for the Nordics to further influence world politics.


This is one reason why it is so astonishing that many Nordic politicians now want to significantly reduce their role in development cooperation. It is a missed opportunity in a world whose development is as uncertain as ever.

The Danish government has decided to cut aid to 0.7 per cent of GNI and, after deduction of the costs of receiving refugees in Denmark, this amounts to 0.56 per cent of GNI. The Finnish government proposes a cut from 0.5 to 0.35 of GNI. As both countries have maintained the budgets set aside for humanitarian relief, development activities have been slashed even more. The UN, and not least UNDP, experience significant cuts.

Rumour has it that Sweden is considering to use a much larger proportion than the current 20 per cent of its aid budget on receiving refugees. Within a slightly growing aid budget, the Norwegian government has allocated more money for relief and proposes to use a record-high NOK 7.3 billion on receiving refugees. To make room for this, aid through civil society organisations is down by NOK 1.3 billion compared to last year, and the UN - and the UNDP in particular - suffer severe cuts.

There is little doubt that all this will entail a shrinking Nordic influence on international development debates, even if Sweden, Norway and Denmark still belong to the few donors with more than 0.7 per cent of GNI in official aid.

Moreover, the changes constitute a significant weakening of the SDGs themselves. If the region best exemplifying the realisation of the goals strongly decreases its commitment to supporting their achievements abroad, the goals lose one of their significant proponents.

On top of this, the Danish Prime Minister Lars Løkke Rasmussen  declared a few minutes after the adoption of the SDGs in New York that a goal like the one on inequality reduction is not relevant in Denmark. This is another blow to the goals and to Nordic development cooperation, as all countries can now legitimately argue that this or that goal is not relevant in their particular situation. If the Nordic countries want to support the SDGs, they have to commit to them domestically as well as abroad.


Another reason why the decreasing emphasis on long-term development cooperation comes as a surprise has to do with the timing. After the Cold War, the Nordics consistently supported development cooperation and a strong UN although the West dominated global governance. Today, where emerging economies are challenging Western dominance and where global crises succeed one another crying out for international regulation and improved global governance, the Nordic countries have decided to disengage. It is difficult to imagine a more inconvenient moment to do so for a group of small, open countries heavily dependent on a stable, peaceful and predictable world.

Given the 50-years long commitment to development cooperation one may wonder why this change comes right now and why it is not met with stronger resistance. Here are some possible explanations: Development organisations have had difficulties in documenting their results. Despite the steadily increasing emphasis on results in the public sector since the 1980s, development organisations have not been able to communicate what difference they make to poor people. Although development is a highly complicated matter affected by numerous factors beyond the control of foreign aid, way too little effort has been used on documenting and communicating successes and failures in development cooperation. This has undermined popular support and repeated surveys indicate that while majorities support foreign aid, they do not believe in its results.

Another possible explanation is that the considerable economic growth in many developing countries, which has changed the global power balance, could be perceived as an indication that development cooperation is no longer needed. People in rich countries are likely to think that now is the time for emerging economies to take over. This could contribute to a tendency for rich country populations to withdraw from international cooperation, and this is most rapidly reflected in the politics of small, open democracies with a strong international engagement because foreign policy is less an elitist issue in such countries compared to bigger nations.

Finally, the financial crisis, concomitant austerity measures, and the current influx of refugees constitute a political conjuncture where a reduction of traditional development cooperation is very likely. Cuts in public sector expenses have become widely accepted, and as the humanitarian consequences of the Syrian war require significant resources, these are found through substantial reductions in public expenses elsewhere. Moreover, the need for climate financing is bound to grow, putting further strain on traditional aid.

What to do then? Is this the end of Nordic efforts to reduce poverty in the world? Not necessarily, but very many actors will have to start talking about how foreign affairs are central to the future welfare of the Nordic countries. Development cooperation should be reframed to address all the global crises that affect the world including the Nordics and that call for Nordic input to be solved. Resources are needed to finance a foreign policy that contributes to a peaceful, stable, sustainable and prosperous world.


Hence, development organisations must stop talking about poor children in faraway countries and start addressing the reality that people in the Nordic countries face. The world is no longer divided into rich and poor countries, but is highly interdependent, and ‘development organisations’ need to reflect this.

The current political juncture is perhaps also the moment where people in the Nordic countries can be convinced that their own welfare is dependent on what happens outside their borders. When refugees walk on highways through the Nordic countryside, events in the surrounding world become very concrete. Thus, it is a good moment to argue that foreign policies should be financed and fought for as seriously as domestic policies. Both are critical to bolster the welfare societies where few have too much and fewer too little.