Financial investments increased Finland’s development cooperation disbursements in 2021
On 12 April, the Organisation for Economic Co-operation and Development (OECD) released preliminary data on development assistance by the EU Member States that are members of the Development Assistance Committee (DAC). Finland’s official development cooperation expenditure in 2021 amounted to EUR 1214 million. Compared to the previous year, the highest increase was reported in development policy investments.
The actual amount of Finland’s ODA expenditure in 2021 grew by EUR 93 million compared to 2020. The share of GNI remained at 0.47 per cent, because Finland’s GNI grew by about six per cent in 2021. Last year, the total amount of the exclusive ODA budget item administered by the Ministry for Foreign Affairs was EUR 710.7 million.
The most significant growth in Finland’s development cooperation expenditure last year was seen in development policy investments, which amounted to EUR 175 million. In terms of euros, the growth was EUR 76 million. Development policy investments differ from grant-based assistance in that the invested capital returns to the investor, which enables the private sector’s participation in development cooperation. The private sector plays a key role in responding to climate change, for example, and innovative solutions offered by companies contribute to the achievement of better and more sustainable results.
A significant proportion of Finland’s development cooperation funding in 2021 was channelled via multilateral organisations, such as the EU (EUR 252 million), the UN (EUR 302 million) and the World Bank Group (EUR 97 million). It is estimated that approximately EUR 410 million of this sum, that is 0.16 per cent of GNI, was directed to the least developed countries (LDCs).
Last year, Finland granted EUR 104 million to humanitarian purposes, which is part of the development cooperation funding. Humanitarian assistance is an efficient means to respond rapidly to sudden crises, such as the COVID-19 pandemic, and to provide immediate support to Ukrainian civilians suffering from Russia’s military actions amid the humanitarian crisis.
Development cooperation appropriations increased also in other OECD and EU countries
Globally, development cooperation flows in 2021 amounted to USD 179 billion (EUR 151 billion), which represented an increase by 4,3 per cent in real terms compared to the previous year. The largest donors were USA, Germany, Japan, The Great Britain and France. Of the OECD/DAC members, Denmark, Germany, Luxemburg, Norway and Sweden exceeded the 0.7 per cent target set by the UN. DAC members’ average ODA to GNI ratio was 0,33 per cent.
The EU Member States that are members of DAC, reported ODA flows of USD 81,3 billion (EUR 69 billion), which corresponds to 45 per cent of all documented ODA and 0,49 per cent of EU DAC members’ GNI. In real terms, the EU/DAC members’ ODA expenditure rose by 4,2 per cent from 2020. Finland’s GNI ratio remained slightly below the average level of the DAC-EU countries.
Of the OECD Development assistance Committee’s DAC members, development cooperation expenditure increased in 23 countries, the most significant of which were Italy, Korea, Slovenia, Ireland, USA, New Zealand, Spain, Japan and Iceland. At the same time, ODA expenditure fell in 13 DAC member countries. The biggest reductions were recorded in six countries.
Development cooperation continued to be one means to respond to the COVID-19 pandemic in 2021. According to preliminary information, in 2021, OECD/DAC member countries used USD 18,7 billion (EUR 15,8 billion) of their development cooperation funds to combat the COVID-19 pandemic and mitigate its effects.
Preliminary data of the actual disbursements will be updated in the final statistics, for example concerning the allocation of funds to different regions. The share of GNI may change when the revised data published by Statistics Finland are available.
Development cooperation is used to build a more stable and fair world
Finland exerts influence through its development policy to promote the UN Sustainable Development Goals. For example, Finnish support has helped 1.6 million Nepalese to gain access to clean water, which, among other things, opens up opportunities for women to go to work and facilitates girls’ access to education. In Africa, more than five million people enjoy clean energy. Finland has also supported more than 50 countries to improve their weather and early warning services, which helps them in preparing for extreme phenomena caused by climate change. Almost 300 million people in Africa and Asia benefit indirectly from ongoing meteorology projects.
The results reached through development cooperation help to build fairer and more stable societies. Development cooperation means sustained efforts over a long period of time with due regard to risk management with, for example, UN organisations, development finance institutions, civil society organisations and business enterprises. Development policy is an integral part of Finland's foreign and security policy.
Jasper Hakala, Programme Officer, Unit for Administrative and Legal Development Cooperation Matters, tel. +358 295 350 796
Titta Maja, Director General, Department for Development Policy, tel. +358 295 350 017
The email addresses of the Ministry for Foreign Affairs are in the format firstname.lastname@example.org.
See also openaid.fi, which contains comprehensive information on Finland’s development cooperation disbursements
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