Ministry for Foreign Affairs Draft Budget for 2004

Press release 167/2003
1 August 2003



In its draft budget submitted to the Ministry of Finance on 30 May 2003, the Ministry for Foreign Affairs proposes a budget totalling EUR 775,6 million for its administrative sector for 2004. This is EUR 18,3 million above the budget framework provided by the government for the foreign service's administrative sector. Of the Foreign Ministry's proposals exceeding the government's budget framework, EUR 6,5 million are proposed for expenditure on activities, EUR 4 million for neighbouring area cooperation and EUR 7,8 million for the value added tax item of the Ministry's administrative sector. Compared with the government's decision on spending limits, the real sum exceeding the framework is EUR 9,3 million, taking account of transfers from items of other main titles of expenditure to the foreign service's main title.

The Ministry for Foreign Affairs supplemented its draft budget on 9 June by submitting a revised calculation for the government's budget session. The Ministry proposed that the appropriations of the draft budget should be reduced by EUR 9,3 million. The reductions (sums in euros in brackets) were made in expenditure on activities (EUR 2,5 million), appropriations for neighbouring area cooperation (EUR 2,0 million), peacekeeping expenditure (EUR 2,7 million) and membership fees and financing contributions (EUR 2,1 million). Due to these reductions, the Ministry has to postpone the planned establishments of an embassy in Nicosia and a consulate in Canton. Also the amount of peacekeeping appropriations is revised, without endangering the ongoing operations. Further, on 12 June, the Ministry for Foreign Affairs made a technical supplementary proposal. All supplementary proposals are included in the enclosed draft budget of the Ministry, which, after the proposed changes, totals EUR 766,3 million.

On the basis of the current government programme and the strategy work of the Ministry for Foreign Affairs, the foreign service's objectives for 2004 are
- to strengthen Finland's international position, and to improve the international operating conditions for economy
- to promote Finnish people's interests and Finnishness throughout the world
- to increase stability, security and cooperation in the neighbouring areas
- to support the enlargement and development of the European Union
- to ensure international stability, security and well-being, and to develop globalisation management.

To achieve these objectives during 2004, the foreign service will define its central objectives for the line of action, the resources needed and the development of know-how in its administrative sector, and establish criteria to indicate whether these objectives are achieved.

On the basis of the strategy work done by the Ministry, the foreign service will continue to develop its administrative sector, inter alia by introducing an incentive wage system, modernising the compensation system of the foreign missions, reducing levels of the organisation's hierarchy and streamlining lines of action.

Due to the EU enlargement, the network of missions in Europe will be strengthened. Also the mission network in Asia will be strengthened. No significant changes are proposed to the number of staff in the administrative sector. The increase of the administrative sector's development cooperation appropriations by EUR 38,7 million from 2003 is taken into account in the amount of appropriations for expenditure on activities as increased administrative expenses of development cooperation. For expenditure on activities, the Ministry for Foreign Affairs proposes a sum of EUR 175,042 million, which exceeds the government's framework by EUR 20,904 million and the appropriations for expenditure on activities for the current year by EUR 23,8 million. The Ministry proposes transfers totalling EUR 15,613 million from other items to the item of expenditure on activities, and this is the main reason for the increase.

The Ministry for Foreign Affairs proposes a total sum of EUR 545,6 million for development cooperation. According to the forecast of gross national income made by the Ministry of Finance in May 2003, the proposed level of appropriations corresponds to 0.37 per cent of the GNI. The development cooperation appropriations are increased by EUR 38,8 million from the current year. EUR 453,2 million of these appropriations are proposed for the foreign service's main title of expenditure. In respect of the development cooperation appropriations, the Ministry's draft budget is in line with the government's discussion on spending limits last spring.

As to crisis management, Finland aims at strengthening the capacity of the international community to prevent and solve conflicts and crises. It is particularly important to improve the EU's crisis management capacity as part of the development of the Common Foreign and Security Policy. The bulk of the crisis management appropriations are proposed for the financing of operations in the Balkans. Further, Finland will contribute to conflict prevention and crisis management in Afghanistan, the Caucasian region and Central Asia, and probably also in the Middle East and Africa. The Ministry for Foreign Affairs is prepared to review the amount of EUR 10,378 million proposed for civilian crisis management during 2004 to take account of, inter alia, possible new civilian crisis management operations of the European Union.

Further information:
Deputy Director General for Finance Pekka Mattila, tel: 160 55850
Development cooperation: Administrator Lotta Karlsson, tel: 160 56289
Neighbouring area cooperation: Chief Administrator Sari Kantola, tel: 160 55610