Government’s supplementary budget proposal includes support for global development in helping tackle COVID-19 pandemic
The Government’s proposal for this year’s seventh supplementary budget contains a package of more than EUR 100 million for the Ministry for Foreign Affairs and the agencies and bodies within its administrative branch. The additional appropriations will enable Finland to support a global solution for the coronavirus (COVID-19) crisis and to promote Finnish exports.
The support of the international community is needed more than ever if developing countries are to cope with the worst of the crisis and to move towards recovery. Post-crisis reconstruction offers the opportunity to build societies that are more sustainable socially, economically and environmentally. Finland’s development policy focuses on promoting such a development path.
The COVID-19 pandemic has caused a massive economic and social crisis in developing countries. The favourable development results seen in recent decades are at risk, and it is estimated that the virus crisis has increased the number of people living in extreme poverty by as much as 150 million. Achievement of the UN’s Sustainable Development Goals is slipping ever further away, endangering the stability of societies.
“The pandemic is a huge crisis, but management of the post-pandemic situation will be an opportunity to steer global development in a better direction. The supplementary budget will strengthen Finland’s role in offering comprehensive solutions to global mega-challenges, such as climate change, safeguarding biodiversity and the learning crisis. At the same time, investment will be made in new types of export promotion tools. This will be of benefit not only in terms of the UN’s Sustainable Development Goals but also for Finland's export efforts,” says Minister for Development Cooperation and Foreign Trade Ville Skinnari.
Increase in Finnfund’s capital will support jobs and business in developing countries
The supplementary budget proposal includes an increase of EUR 50 million in the capital of the Finnish Fund for Industrial Cooperation (Finnfund).
Increasing the share capital is the most effective way to secure the ability of Finnfund to operate effectively. This significant increase in capital will safeguard the capital adequacy of the company and provide opportunities for innovation and responsiveness in fast-changing situations. This is particularly important during the COVID-19 crisis, as Finnfund’s operating environment has become more challenging and risk laden.
Support for humanitarian situation and pandemic-related crisis in developing countries
The supplementary budget proposal allocates EUR 5 million to the World Health Organization’s work to tackle the COVID-19 pandemic in developing countries, and EUR 24.5 million to humanitarian aid in response to the humanitarian consequences of the pandemic.
As a result of the pandemic, the number of people in need of emergency relief has almost tripled to 420 million, and the need for humanitarian funding has grown by 50 per cent to USD 40 billion in all. It is feared that the number of people living in hunger will double to 270 million by the end of the year.
Allocation of the additional humanitarian funding will be based on needs and will adhere to humanitarian aid principles. It will be channelled via established international and Finnish organisations. The emphasis will be particularly on food security, responding to the pandemic, assisting refugees, and education in crisis situations (including school meals).
Climate finance for both mitigation and adaptation
The supplementary budget proposal includes EUR 18 million for climate finance. Climate change and loss of biodiversity are issues affecting the future fate of humanity. The need to respond to these crises is in danger of receiving too little attention due to the virus pandemic.
In accordance with the Government Programme, climate finance is being scaled up, with the aim of an evenly balanced split between support for climate change mitigation and for adaptation. Urgent additional investment is required in the support for sustainable use of natural resources and for tackling biodiversity loss.
Virtual service platform for export promotion
The supplementary budget proposal reserves EUR 2 million for the development of a virtual service platform for the Ministry for Foreign Affairs. The aim is to enable a new way of presenting virtual export promotion events and Finland’s strengths, and to examine the scope for also bringing together other important business services offered by different authorities.
The seventh supplementary budget proposal for 2020 will be submitted to Parliament on 29 October, when it will also be published on the budjetti.vm.fi website (in Finnish).
- Kirsi Airio, Special Adviser to the Minister for Development Cooperation and Foreign Trade, tel. +358 295 350 528
- Supplementary budget package: Risto Hakoila, Financial Director, tel. +358 295 351 287; Katja Bordi, Head of Financial Planning, tel. +358 295 351 284
- Development cooperation: Ramses Malaty, Director of Unit, tel. +358 295 351 001
- The Foreign Ministry’s email addresses are in the format firstname.lastname@example.org
- Prime Minister's Office press release: Government reaches agreement on seventh supplementary budget proposal for 2020