Iceland

Introduction

The 2017 DAC Peer Review recognised that Iceland is a committed and active member of the international community, using its diplomatic influence in a strategic and effective way to address global development issues. International development co-operation is an integral part of Iceland’s foreign policy, whose efforts are concentrated in least developed countries (LDCs) in Africa, focusing on promoting human rights and gender equality, peace and security as well as the fight against poverty.

Iceland’s bilateral development agency, ICEIDA, was merged into the Ministry for Foreign Affairs in 2016. The 2017 DAC Peer Review recommended that Iceland ensure it remains a responsive, flexible and high-quality development co-operation provider despite the restructuring and improves guidance on how to select future partners as well as funding instruments. Iceland is a valued partner for its priority multilateral organisations, by which it is appreciated for its willingness to champion start-up initiatives on environmental sustainability and gender equality.

Official development assistance

Despite the relatively small size of its aid budget, Iceland was the 13th most generous OECD-DAC donor by the percentage of gross national income (GNI) provided as official development assistance (ODA) in 2018. Its priority partner countries (which are Malawi and Uganda) reflect its commitment to allocate aid where it is most needed, focusing on social infrastructure as well as those sectors where it has forged a comparative advantage (e.g. gender equality, geothermal energy and fishing).

In 2018, Iceland provided USD 81 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 0.31% of GNI. Under the “cash-flow basis” methodology used in the past, 2018 net ODA was also USD 81 million, which represented an increase of 17.4% in real terms from 2017.

In 2017, in-donor refugee costs were USD 22 million, an increase of 24.3% in real terms over 2016, and represented 32.5% of Iceland’s total net ODA.

Iceland’s share of untied bilateral ODA (excluding administrative costs and in-donor refugee costs) was 100% in 2017 (as in 2016), while the DAC country average was 82.1%. The grant element of total ODA was 100% in 2017.

Share
        
Share
        

In 2017, 79% of gross ODA was provided bilaterally, of which 27% was channelled through multilateral organisations (multi-bi/non-core contributions). Iceland allocated 21% of total ODA as core contributions to multilateral organisations. Learn more about multilateral development finance.

Share
        
Share
        

In 2017, country programmable aid was 28% of Iceland’s bilateral ODA, compared with the DAC country average of 48% (see the methodological notes for further details on country programmable aid). Project-type interventions accounted for 67% of this aid.

Share
        
Share
        

In 2017, Iceland channelled 66.9% of gross bilateral ODA through the public sector, an increase from 62.6% in 2016. See the methodological notes for further details on channels of delivery.

Share
        

In 2017, USD 3 million of gross bilateral ODA was channelled to and through civil society organisations (CSOs). Between 2016 and 2017, ODA channelled to and through CSOs fell as a share of bilateral aid (from 12% to 6%). Learn more about ODA allocations to and through CSOs and the Civil Society Days.

Share
        

Bilateral ODA was primarily focused on sub-Saharan Africa, which received USD 15 million in 2017.

Share
        

In 2017, 31.2% of gross bilateral ODA went to Iceland’s top 10 recipients. Its two priority partner countries with an embassy – Uganda and Malawi – and its other three priority countries – Mozambique, Afghanistan and West Bank and Gaza Strip – are also among the top recipients of its ODA. In 2017, support to fragile contexts reached USD 16 million (29.5% of gross bilateral ODA).Learn more about support to fragile contexts.

Share
        
Share
        

In 2017, 25.4% of Iceland’s gross bilateral ODA (USD 14 million) was allocated to the LDCs, compared to the DAC country average of 23.5%. This is down from 28.7% in 2016. The LDCs received the highest share of bilateral ODA in 2017, noting that 66.5% was unallocated by income group.

At 0.08% 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.

Share
        

In 2017, 27% of bilateral ODA commitments (USD 14.6 million) was allocated to social infrastructure and services, with a focus on support to government and civil society (USD 3.6 million) and water and sanitation (USD 1.7 million). Humanitarian aid amounted to USD 4.2 million. In 2017, Iceland committed USD 8 million (29.6% of bilateral allocable aid) to promote aid for trade and improve developing countries’ trade performance and integration into the world economy.

Share
        

USD 22 million of gross bilateral allocable ODA supported gender equality. In 2017, 79% of Iceland’s bilateral sector-allocable aid had gender equality and women’s empowerment as a principal or significant objective (down from 86% in 2016), compared with the DAC country average of 36%. Iceland has a strong focus on gender in all sectors except economic infrastructure. Learn more about ODA focused on gender equality and the DAC Network on Gender Equality.

Share
        

USD 20 million of bilateral ODA commitments supported the environment. In 2017, 72% of Iceland’s gross bilateral allocable aid supported the environment and 37% (USD 11 million) focused on climate change, compared with the respective DAC country averages of 33% and 25%. Allocations supporting the environment increased from 69% in 2016 while those focused on climate change rose from 33% in 2016. The proportion of bilateral allocable ODA focusing specifically on adaptation increased from 33% in 2016 to 35% in 2017 and the proportion focusing specifically on mitigation from 16% to 19%. Learn more about climate-related development finance.

Share
        

Other financial flows

Share
        

Institutional set-up

In 2016, Iceland integrated its bilateral development agency, ICEIDA, within the Ministry for Foreign Affairs. According to the 2017 DAC Peer Review, this move strengthened its institutional framework and operational capacity for development co-operation. The Ministry for Foreign Affairs manages around 59% of Iceland’s ODA, and within the ministry, the Directorate of International Development Cooperation is responsible for Iceland’s development co-operation policy formulation, planning, administration, evaluation and co-ordination.

Share
        

Evaluation system

The Ministry for Foreign Affairs has a dedicated unit for evaluating the portfolio of development initiatives and funding under Icelandic ODA. The Director of Evaluations is responsible for ensuring that the DAC guidelines and procedures for evaluations, as well as other applicable standards, are applied. Read more about Iceland’s evaluation system.

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

Performance against the commitments for effective development co-operation

Share
        

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

Ministry for Foreign Affairs: https://www.government.is/topics/foreign-affairs/international-development-cooperation

Member of the OECD Development Assistance Committee (DAC) since 2013.

End of the section – Back to iLibrary publication page