Proposed aid cuts put Finland’s international reputation at risk

Three former development ministers warn that Finnish bilateral aid could collapse if the new government carries through with proposed massive cuts in aid.

The new Finnish government has announced heavy budget cuts in several sectors, including aid. This would inevitably limit Finland’s international role and influence its security in a fast-changing world.

Development cooperation and humanitarian aid have proven to be efficient tools in combating poverty and responding to humanitarian crisis. The Finnish government is making a policy change at a time when the post-2015 development goals are negotiated in the UN, the Addis Abeba development finance conference is approaching and the international climate funding requires new resources. The need of the day is for more funding to international development and climate protection, not less.

The new Finnish government aims to reduce the annual allocation by 300 million euros. This means a 40 per cent cut in all its aid to the world’s poorest. The amount grows by another 70-100 million euros since the revenues from the emission trading scheme auctions are no longer to be directed to development. Finnish support to fighting poverty and climate change will collapse as the aid level of 0.6 per cent of GNI falls to 0.35 per cent. The change is historic.

Finland is increasingly distancing itself from the other Nordic countries. Sweden, Norway and Denmark have already reached the 0.7 per cent target suggested by the UN. While widening the gap with Finland’s traditional reference group, the new government is throwing away means of genuinely participating in the prevention and mitigation of global crisis. It is easy to agree with Foreign Minister Timo Soini that crises should be prevented where they arise. Development cooperation and humanitarian aid are doing precisely that. Peace-building and Finnish NGOs have also been funded from the development cooperation budget. These are issues Finland is known for.

The European Union has set a target for its member states to increase aid appropriations. In early June, Commission President Jean-Claude Juncker called it a scandal that some EU countries are reducing their funding under the pretence of the financial crisis.

Before the Finnish elections, development cooperation and its effectiveness were widely debated and criticised. An image was created of big, fundamental problems in the way aid is implemented and a shortage of real outcomes. The problem in the aid debate is that good news seldom hits the headlines. In the beginning of June, an independent evaluation of Finnish development cooperation gave strong recognition to Finland’s long-term efforts that have brought about results. Finland has contributed to reaching the millennium development goals by supporting access to potable water for 3 million people in Ethiopia. Funding for girls’ education has helped to empower girls and women in numerous countries. Environment, education and human rights have been at the core of the work.

If the announced cuts of 43 per cent become a reality, they are so large that they may put an end to support to NGO activity and bilateral aid. The long-term partner countries Tanzania, Kenya, Zambia, Mozambique, Nepal, Ethiopia, Afghanistan and Myanmar could be abandoned.

The cuts are planned already for this year and next. It will be difficult to implement these cuts in a rational way by assessing the merits of different instruments in only a few months.

Finland has prioritised aid to the poorest and most fragile countries. Another focus has been building up tax systems in partner countries. These are now being jeopardised.

We worry about Finland’s international role and reputation. Development cooperation has been part of the positive image which has also helped the Finnish private sector and export activities. The Finnish economy would certainly benefit from the long-term international development work in protecting human rights, reducing inequality and fighting climate change.

Satu Hassi, Heidi Hautala, Pekka Haavisto (former Finnish ministers of development cooperation)

Published in Development Today 12.6.2015