Private
finance
Debt
Tax
justice
Aid
Financial
architecture

Finland's aid cut and the EU’s credibility crisis

Added 18 Jun 2015

By Nina Mäki, Advocacy and Policy Officer, Kepa - The Finnish NGO Platform and Jeroen Kwakkenbos, the European Network on Debt and Development (Eurodad)

Also published on Euractiv.


Just as the EU is trumpeting its continuing commitment to development cooperation, it is being undermined. And by one of its most reliable members, Finland, which has announced it will cut its aid budget by almost half.

On May 26 the EU reaffirmed its collective commitment to dedicate 0.7% of gross national income (GNI) to Official Development Assistance (ODA) when it published its position ahead of next month’s Financing for Development Summit. The Finnish decision to make 43% of cuts from development cooperation funds just two weeks later (reducing its ODA contribution to 0.35% GNI) could not have come at a worse time. It is a serious blow to the EU’s credibility in a year when several major summits will decide the future of international development. 

Finnish ODA: The highs and lows

While Finland has lagged behind its Nordic neighbours in achieving the 0.7% target, it did reach 0.75% in 1991. But dramatic cuts in subsequent years meant that by 1994, Finnish aid plummeted to 0.29%, and it took nearly 15 years to recover from this slump.

By 2014, it stood at 0.6%, or 1.2 billion euros. If the new cuts are implemented Finnish aid will fall to an average of 0.35%, cut by more than 300 million euros all in one go. Incredibly, at the same time, the government’s program states that it is reaffirming Finland´s “long term commitment” to reach the 0.7% target.

The human cost

Finland’s government must realise that what it sees as a way to balance its budget has serious implications for the health and livelihoods of the poorest and most marginalised people in the world. Finnish aid has made a significant difference, particularly in education, agricultural development, gender equality, peace building and crises management as well as in politically sensitive topics such as reproductive rights and disability issues. Many of Finland´s long term partner countries – Mozambique, Tanzania and Ethiopia among others – know Finland as a reliable, transparent and trustworthy partner. Poor countries have emphasised the importance of this sustained and predictable financing.

A recent independent evaluation of Finnish aid found that Finland “provides value for money and makes important contributions […] to some of the poorest countries in the world.”

In Ethiopia, Finnish aid money was used to build more than 10,000 wells, providing clean drinking water to over 2.5 million Ethiopians. In Mozambique, Finland is a strong supporter of the education sector. In 2012 over 72 % of Mozambican children started school. Only ten years earlier the same number was as low as 36%.

It is difficult to believe that the Finnish people would accept putting all of this at risk. Such abrupt and dramatic cuts would not only jeopardise future work, but also progress already made. Over 80% of Finns consider development cooperation important. Thousands of people donate time and money to development cooperation carried out by Finnish civil society organisations

With the drastic cuts being proposed by the Finnish government this record of achievement would be all but discarded. 

If the planned cuts are implemented, many NGOs´ work will simply cease to exist. Many valued organisations raising awareness in Finland fear for their future. The government has announced a total freeze of the funding supporting global education projects for the time being.

Finland's reputation among partner countries in Africa, Asia and Latin America could also be negatively affected by the planned ODA cuts.

What does this mean for the EU?

Three major summits this year will discuss many important issues related to eradicating poverty and ensuring environmental sustainability. During negotiating sessions ahead of next month’s UN conference on Financing for Development, the EU has highlighted its achievements as a provider of development aid to establish itself as a credible partner. Meanwhile, it has sidelined other important areas that are important to poverty reduction and need reform, such as tax justice and debt resolution.

Finland has now shown the world that what Europe has been trumpeting as its greatest strength is at best a bluff and at worst a sign of self-delusion, as the difference between what it says and what it does grows larger and larger. What is apparent is that the EU and the OECD DAC are unable to hold their members accountable to the commitments they make to development. 

The message being sent is quite clear. Self-interest has trumped solidarity. This decision is not just bad for Finland, it is bad for everyone.

Since this piece was published, our partners have launched a petition to tell Finland's government that the world's most vulnerable people need our support. This will be submitted to the Finnish Government in advance of the budget negotiations to be held in autumn 2015.