Finland

Introduction

The aim of Finland’s development policy is to eradicate poverty and inequality and promote sustainable development. To do so, as found in the 2017 DAC Peer Review, Finland focuses its action in four priority areas: 1) the rights and status of women and girls: 2) the growth of economies to generate more jobs, livelihoods and well-being; 3) democratic and better-functioning societies; and 4) food security, access to water and energy, and sustainable use of natural resources.

The Development Policy Committee, the body that monitors and evaluates Finnish development co-operation, called for an approach adapted to global challenges such as climate change and poverty in a May 2019 report. The report also highlights the fact that the new government could institutionalise the Development Policy Committee so that its mandate is automatically renewed after elections to allow it to fulfil its mandate consistently.

Official development assistance

Finland’s official development assistance (ODA) continued to decrease in 2018, primarily due to lower bilateral ODA and in-donor refugee costs. Finland remains a strong and committed multilateral partner. Its bilateral ODA focuses on sub-Saharan Africa and least developed countries (LDCs). Investments in the energy sector feature prominently in its bilateral portfolio.

In 2018, Finland provided USD 983 million in total ODA (preliminary data, current prices), using the new “grant-equivalent” methodology (see the methodological notes for further details) adopted by DAC members on their reporting of 2018 data as a more accurate way to count the donor effort in development loans. This represented 0.36% of gross national income (GNI). Under the “cash-flow basis” methodology used in the past, 2018 net ODA was USD 983 million, which represented a fall of 14.6% in real terms from 2017, due to cuts in the bilateral aid programme.

In 2017, in-donor refugee costs were USD 77 million, a decrease of 42.1% in real terms over 2016, and represented 7.1% of Finland’s total net ODA.

Finland’s share of untied bilateral ODA (excluding administrative costs and in-donor refugee costs) was 98.3% in 2017 (up from 95.3% in 2016), while the DAC country average was 82.1%. The grant element of total ODA was 100% in 2017. Non-grants, which referred to equity investments, represented 3.5% of gross ODA.

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In 2017, 55.6% of gross ODA was provided bilaterally, of which 34.9% was channelled through multilateral organisations (multi-bi/non-core contributions). Finland allocated 44.4% of total ODA as core contributions to multilateral organisations. Learn more about multilateral development finance.

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In 2017, country programmable aid was 36% of Finland’s bilateral ODA, compared to the DAC country average of 48% (see the methodological notes for further details on country programmable aid). Project-type interventions accounted for 65.9% of this aid.

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In 2017, Finland channelled 37.0% of gross bilateral ODA through the public sector (compared to 37.8% in 2016). The share of bilateral ODA channelled through private sector institutions was 3%. In 2017, Finland channelled USD 17 million through universities or other teaching and research institutions, equal to 2.8% of its gross bilateral ODA. See the methodological notes for further details on channels of delivery.

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In 2017, USD 121 million of gross bilateral ODA was channelled to and through civil society organisations (CSOs). Between 2016 and 2017, ODA channelled to and through CSOs increased as a share of bilateral aid (from 18.3% to 19.8%). Learn more about ODA allocations to and through CSOs and the Civil Society Days.

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In 2017, bilateral ODA was primarily focused on sub-Saharan Africa and South and Central Asia. USD 140.9 million was allocated to sub-Saharan Africa and USD 64.8 million to South and Central Asia.

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In 2017, 28.1% of gross bilateral ODA went to Finland’s top 10 recipients. Eight of its long-term partner countries are among its top 10 recipients of bilateral ODA. Support to fragile contexts reached USD 210 million in 2017 (34.6% of gross bilateral ODA). Learn more about support to fragile contexts.

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In 2017, 27.5% of Finland’s gross bilateral ODA (USD 168 million) was allocated to the LDCs, which received the highest share of bilateral ODA in 2017. This is down from 30.6% in 2016. The DAC country average for 2017 was 23.5%. Lower middle-income countries received 12.9% of bilateral ODA in 2017, noting that 52.9% was unallocated by income group.

At 0.13% of GNI in 2017, total ODA to the LDCs (including imputed multilateral flows) was lower than the UN target of 0.15-0.20% of GNI.

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In 2017, 29.2% of bilateral ODA commitments (USD 188 million) was allocated to economic infrastructure and services, with a strong focus on energy (USD 154 million). Humanitarian aid amounted to USD 82 million. In 2017, Finland committed USD 6 million of ODA to support developing countries to raise domestic revenue, amounting to 1.2% of bilateral allocable aid. Finland also committed USD 223 million (43.1% of bilateral allocable aid) to promote aid for trade and improve developing countries’ trade performance and integration into the world economy in 2017.

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USD 314 million of gross bilateral allocable ODA supported gender equality. In 2017, 60.6% of Finland’s bilateral sector-allocable aid had gender equality and women’s empowerment as a principal or significant objective (up from 53.2% in 2016), compared with the DAC country average of 36%. A high share of Finland’s aid to population and reproductive health, other social infrastructures and services, health, and education focuses on gender. Learn more about ODA focused on gender equality and the DAC Network on Gender Equality.

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USD 191 million of bilateral ODA commitments supported the environment. In 2017, 36.9% of Finland’s gross bilateral allocable aid supported the environment and 35.1% (USD 182 million) focused on climate change, compared with the respective DAC country averages of 33% and 25%. Allocations supporting the environment increased from 22.1% in 2016 and those focused on climate change increased from 12.3% in 2016. The proportion of bilateral allocable ODA focusing specifically on adaptation increased from 9.3% in 2016 to 28.0% in 2017 and the proportion focusing specifically on mitigation from 6.4% to 35.0%. Learn more about climate-related development finance.

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Other financial flows and amounts mobilised from the private sector

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In 2017, the Finnish development finance institution – Finnfund – mobilised USD 276.4 million from the private sector through direct investment in companies and project finance special purpose vehicles (SPVs), syndicated loans, shares in collective investment vehicles (CIVs), as well as credit lines.

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Of the country-allocable private finance mobilised in 2012-17, 54% targeted middle-income countries and 46% the LDCs.

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Finland’s private finance mobilised in 2012-17 mainly related to activities in the banking and financial services (33%); energy (27%); agriculture, forestry and fishing (18%); and communications (9%) sectors. Learn more about the amounts mobilised from private sector for development.

Institutional set-up

Finland’s development co-operation structure is integrated – development policy is an essential part of foreign and security policy. The Ministry for Foreign Affairs (MFA) is under the direction of three ministers dedicated to foreign affairs, foreign trade and development, and Nordic co-operation. The Department for Development Policy is responsible for Finland’s international development and humanitarian policy, development finance, and overall planning and monitoring of development co-operation. The Political Department and Department for External Economic Relations provide policy guidance to the regional departments responsible for their respective geographic areas. Finnfund is Finland’s development finance institution. The MFA also partners with Business Finland (new merger of Tekes and Finpro) for the business with impact programme (BEAM).

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Evaluation system

The institutional arrangements and responsibilities for evaluation in Finland are defined in the Decree on the Ministry for Foreign Affairs 550/2008 (1280/2013) and the Evaluation Norm 1/2015. The Unit for Development Evaluation (EVA-11) is an independent administrative unit formally responsible for the development of the evaluation system, commissioning large-scale evaluations and ensuring its effective use. EVA-11 undertakes comprehensive and strategic evaluations to assess policy effectiveness, country strategies, financing instruments, processes, results, theme or sector-based programmes, and partner programmes. Learn more about evaluation in Finland.

The evaluation unit is currently undertaking a meta-evaluation on decentralised project and programme evaluations and assessing the country programmes of Finland’s bilateral development co-operation. Read Finland’s evaluation plan.

Visit the DAC Evaluation Resource Centre website for evaluations of Finnish development co-operation.

Performance against the commitments for effective development co-operation

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Explore the Monitoring Dashboard of the Global Partnership for Effective Development Co-operation.

Ministry of Foreign Affairs, Development policy and development co-operation of Finland: https://um.fi/development-policy-and-development-cooperation

Member of the OECD Development Assistance Committee (DAC) since 1975.

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