Finland

Finland’s goal is to eradicate poverty, reduce inequality and achieve sustainable development. The 2020 official development assistance (ODA) budget marks a reversal in the five-year decline of Finland’s ODA, keeping an even split between bilateral and multilateral aid. The Ministry for Foreign Affairs (MFA) is responsible for managing Finland’s ODA budget.

Finland’s last OECD-DAC peer review was in 2017 and the OECD-DAC mid-term review is scheduled for 2021. Learn more about the 2017 OECD-DAC peer review of Finland.

Finland’s 2016 Development Policy, “One World – Common Future”, focuses on four priority areas: 1) strengthening the status and the rights of women and girls; 2) the growth of economies to generate more jobs; 3) education, well-functioning societies and democracy; and 4) climate change and natural resources. Civil society organisations (CSOs) and the private sector are important partners in Finnish development co-operation.

Finland provided more ODA in 2019 than in the previous year. Total ODA on a grant-equivalent basis stood at USD 1.1 billion (preliminary data), representing 0.42% of Finland’s gross national income (GNI) in 2019.1 The increase of 18.2% in real terms from 2018 was due especially to an increase in development investments in private sector entities. Finland ranked 11th among DAC member countries in relation to its ODA/GNI ratio in 2019. Finland is committed, at the European level, to collectively achieve a 0.7% ODA/GNI ratio by 2030. Under the cash-flow methodology used in the past, net ODA was USD 1.1 billion in 2019. Within Finland’s gross ODA portfolio in 2019 (USD 1.1 billion), 90.3% was provided in the form of grants and 9.7% in the form of non-grants.2

Finland’s ODA continued its downward trajectory until 2018, reflecting lower bilateral ODA and in-donor refugee costs, but rebounded in 2019. ODA spent in support of the climate and environment dropped significantly in 2018. Its bilateral ODA focuses on sub-Saharan Africa and South and Central Asia, with a focus on fragile contexts and least developed countries (LDCs). See the methodological notes for details on the definitions and statistical methodologies applied.

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In 2018, just over half of Finland’s ODA (51%) was provided as core contributions to multilateral organisations, including European Union (EU) institutions. Gross bilateral ODA was 49% of total ODA, of which 25% was channelled through multilateral organisations (earmarked contributions).

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In 2018, Finland decreased its total support (core and earmarked contributions) to multilateral organisations. It provided USD 633 million of gross ODA to the multilateral system, a fall of 13.5% in real terms from 2017. Of this, USD 508 million was core multilateral ODA and the rest was earmarked for a specific country, region, theme or purpose. Project aid earmarked for a specific project or purpose (tight earmarking) accounted for 28% of Finland’s non-core contributions, while the remaining 72% was softly earmarked (to pooled funds and specific-purpose programmes and funds).

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In 2018, Finland’s total contribution to multilateral organisations was mainly allocated to the EU institutions, the United Nations (UN) and the World Bank Group. These contributions together accounted for 87% of Finland’s total support to the multilateral system. The UN system received 29%, mainly through core contributions. Out of a total gross volume of USD 183 million to the UN system, the top three UN recipients of Finland’s support (core and earmarked contributions) were: the United Nations Population Fund (USD 27 million), the United Nations High Commissioner for Refugees (USD 24 million) and UN Women (USD 16 million).

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Note: See the list of UN acronyms.

See the section on “Geographic and thematic focus of ODA” for the geographical and thematic breakdown of bilateral allocations earmarked through the multilateral development system. Learn more about multilateral development finance.

In 2018, Finland reduced its bilateral spending compared to the previous year. It provided USD 494 million as gross bilateral ODA (including earmarked contributions to multilateral organisations), which represented a decrease of 23.5% in real terms from 2017.

In 2018, country programmable aid was 40% of Finland’s gross bilateral ODA, compared to a DAC country average of 49%.

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Note: NGO: non-governmental organisation.

In 2018, Finland channelled its bilateral ODA mainly through multilateral organisations, as earmarked funding, and through the public sector.

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Note: NGO: non-governmental organisation; PPP: public-private partnership.

In 2018, CSOs received USD 121 million of gross bilateral ODA. Five per cent of gross bilateral ODA was allocated to CSOs as core contributions and 20% was channelled through CSOs to implement projects initiated by Finland (earmarked funding). Between 2017 and 2018, core and earmarked contributions to CSOs increased as a share of bilateral ODA, from 20% to 24%. Learn more about ODA allocations to and through CSOs and civil society engagement in development co-operation.

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In 2018, Finland’s bilateral ODA was primarily focused on Africa and Asia. USD 150 million was allocated to Africa and USD 143 million to Asia (Afghanistan, Nepal and the Middle East), accounting respectively for 30% and 29% of gross bilateral ODA. Bilateral allocations to sub-Saharan Africa have decreased as bilateral ODA has decreased. Asia was the main recipient of Finland’s earmarked contributions to multilateral organisations. Thirty-six per cent of gross bilateral ODA was unspecified by region in 2018.

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Bilateral ODA by recipient country

In 2018, 33% of gross bilateral ODA went to Finland’s top 10 recipients. Nine of its top 10 recipients are long-term partner countries in sub-Saharan Africa and Asia. The share of gross bilateral ODA that was not allocated by country was 47%.

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In 2018, the LDCs received 30.6% of Finland’s gross bilateral ODA (USD 151 million). This is above the DAC country average of 23.8%. Finland allocated the highest share of gross bilateral ODA to the LDCs and the second-highest share (16.2%) to lower middle-income countries in 2018, noting that 47% was unallocated by income group.

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Note: LDC: least developed country; LIC: low-income country; LMIC: lower middle-income country; UMIC: upper middle-income country; MADCTs: more advanced developing countries and territories.

Support to fragile contexts reached USD 200 million of gross bilateral ODA in 2018 (40.4% of gross bilateral ODA). Extremely fragile contexts received 46.1% of this amount. Learn more about support to fragile contexts on the States of Fragility platform.

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Note: The chart represents only gross bilateral ODA that is allocated by country.

In 2018, most of Finland’s bilateral ODA was allocated to social infrastructure and services. Investments in this area accounted for 42% of bilateral ODA commitments (USD 298 million), with a focus on support to government and civil society (USD 155 million) and education (USD 54 million). Bilateral humanitarian aid amounted to USD 53 million (8% of bilateral ODA). ODA for production sectors totalled USD 51 million, of which USD 12 million was for business and other services. Seven per cent of bilateral ODA commitments (USD 50 million) were for administrative costs of providers. Earmarked contributions to multilateral organisations focused primarily on social infrastructure and services and humanitarian aid in 2018.

In 2018, Finland committed USD 9.7 million of ODA to the mobilisation of domestic resources in developing countries, amounting to 1.7% of bilateral allocable aid. Finland also committed USD 81.3 million (14.1% of bilateral allocable aid) to promote aid for trade and improve developing countries’ trade performance and integration into the world economy in 2018.

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In 2018, Finland committed 59% of its bilateral allocable aid to gender equality and women’s empowerment as either a principal or significant objective (down from 61% in 2017),3 compared with the DAC country average of 42%. This is equal to USD 344 million of bilateral ODA commitments in support of gender equality. Out of this, the share of bilateral allocable aid committed to gender equality and women’s empowerment as a principal objective was 12%, compared with the DAC country average of 4%. A significantly higher share of interventions on social infrastructure and services addresses gender equality than those on economic infrastructure. Finland screens virtually all activities against the gender marker (99.9% in 2018). Learn more about ODA focused on gender equality and the DAC Network on Gender Equality.

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In 2018, Finland committed 23% of its bilateral allocable aid (USD 133 million) in support of the environment as either a principal or significant objective, down from 37% in 2017 (the DAC country average was 33%). Six per cent focused on environmental issues as a principal objective, compared with the DAC country average of 11%. Nineteen per cent (USD 108 million) focused on climate change as either a principal or significant objective, down from 35% in 2017 (the DAC country average was 26%). Finland has a slightly higher focus on mitigation (13% in 2018) than on adaptation (12%). Learn more about climate-related development finance.

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Data analysis for the OECD initiative Sustainable Oceans for All shows that Finland committed USD 5.4 million in support of the conservation and sustainable use of the ocean in 2018, amounting to 1.0% of bilateral allocable aid. Learn more about ODA focused on the ocean economy.

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In 2018, Finland’s development finance institution, Finnfund, mobilised USD 210.8 million from the private sector through direct investment in companies or project finance special purpose vehicles (SPVs) and shares in collective investment vehicles (CIVs).

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Note: CIV: collective investment vehicle; SPV: special purpose vehicle.

Of the country-allocable finance mobilised from the private sector in 2017-18, 36% targeted middle-income countries and 64% targeted the LDCs.

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Note: LDC: least developed country; LMIC: lower middle-income country; UMIC: upper middle-income country.

Finland’s private finance mobilised in 2017-18 mainly related to activities in the banking and financial services (50%); energy (14%); agriculture, forestry and fishing (11%); and communications (11%) sectors. Learn more about the amounts mobilised from the private sector for development.

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 within the MFA is responsible for Finland’s international development and humanitarian policy, development finance, and overall planning and monitoring of development co-operation. The Development Policy Committee, Finland's government-appointed advisory body, monitors and reviews Finland's development co-operation and policy. 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.

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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) within the MFA 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 an evaluation of its country strategy approach in fragile contexts. Read Finland’s 2020-22 evaluation plan.

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

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

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

Finnfund: https://www.finnfund.fi/en

Finland’s Development Policy Committee: https://www.kehityspoliittinentoimikunta.fi/en/development-policy-committee

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

The methodological notes provide further details on the definitions and statistical methodologies applied, including the grant-equivalent methodology, core and earmarked contributions to multilateral organisations, country programmable aid, channels of delivery, bilateral ODA unspecified/unallocated, bilateral allocable aid, the gender equality policy marker, and the environment markers.

← 1. DAC members adopted the grant-equivalent methodology starting from their reporting of 2018 data as a more accurate way to count the provider’s effort in development loans. See the methodological notes for further details.

← 2. All 2019 statistics in this paragraph are expressed in current prices and, therefore, they may differ from values in the ODA volume chart, which uses constant prices. Non-grants include sovereign loans, multilateral loans, equity investment and loans to the private sector.

← 3. The use of the recommended minimum criteria for the marker by some members in recent years can result in lower levels of aid reported as being focused on gender equality.

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https://doi.org/10.1787/2dcf1367-en

© OECD 2020

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