Minister Hautala’s speech in Signing Ceremony of Bilateral Co-operation of Zambia
 

Minister for International Development Heidi Hautala gave a speech in Signing Ceremony Bilateral Co-operation Agreement in the Ministry of Finance of Zambia May 22.

Finnish support to Zambia demonstrates the strong will of both Finnish and Zambian Governments towards a sustainable development at the level of human capacities.

It also brings new elements into our co-operation, creating new partnerships between Zambia and Finland, building a concrete bridge towards transition in our development co-operation.

Zambia’s economic growth has been rapid, but poverty levels prevail high, particularly in the rural areas. The triggle down effect has not contributed to poverty reduction as expected. Finland commends Zambia’s initiative to set poverty reduction high on the bilateral agenda, which is visible through the agreements signed today.

Finland has supported the implementation of Zambia’s national plan with the objective to contribute to poverty reduction through the provision of general budget support. This support has added up to 25 million euros between 2007 and 2012.

We have now signed an amended agreement under which Finland will provide budget support to Zambia in 2013 and 2014. Up to a total of 12 million Euros will be allocated for this purpose. 6 million Euros for both years, and as a matter of fact the first transfer is currently being processed and should arrive to the accounts of the Zambian Government by the end of the month.

Poverty reduction budget support is only one of the instruments through which Finland supports the development in Zambia. Others include bilateral project specific support such as the Social Protection Programme that we just signed, support through multilateral institutions such as the UN and the development banks and support to non-state actors such as Zambian National Farmers Union or civil society organizations. However, poverty reduction budget support has corresponded to 30-40% of the support provided by Finland in the recent years.

Budget support has provided an excellent way for cooperating partners to harmonize cooperation, lessen transaction costs and fully use government systems and thus follow the principles sets in Paris, Acra and Busan. It has also provided a useful forum for dialogue between the cooperating partners and Zambian government to together look at the challenges of better contributing to equal development of all Zambians.

Recent evaluations have shown progress in some key social sectors such as health and education. On the other hand some challenges remain. Zambian economy has grown at a respectable speed and your country has emerged as a middle income country with ever increasing domestic revenues. However, poverty rates have remained at persistently high levels, which would indicate that more work is needed in terms of ensuring equal access to services by all Zambians.

Social cash transfers as a way of social protection has proven to be an effective and cost-effective way to tackle poverty amongst the most vulnerable groups in several countries. Small, predictable cash transfers to poor families with children, the elderly or persons with disabilities, have shown to improve food security and nutrition status of families, children’s wellbeing as well as enhancing families’ small-scale economic activities. The preliminary impact assessment data in Zambia looks encouraging and in line with the evidence from across the world.

Finland’s development policy emphasizes inclusive sustainable growth and reduction of inequalities. For Finland, the Social Protection Programme is an addition to our sectoral interventions in agriculture, environment and natural resources, and private sector development, to address the abject poverty and to promote inclusive development in Zambia.

The Government of Zambia has taken commendable steps towards building social protection for its citizens through the overarching social protection policy development process that will establish Zambia as a low middle income country that also takes care of its vulnerable citizens and promotes inclusive development.

Finland together with other cooperating partners, through this bilateral agreement, contribute towards building the Government’s capacity to run social cash transfer programmes efficiently and in a transparent and coordinated manner to fulfill their full potential in poverty reduction.

Finland, together with other cooperating partners providing poverty reduction budget support, will continue to engage in the dialogue over the underlining principles that the Zambian government has agreed to follow. The principles are:

Commitment to sound macroeconomic management
Commitment to good governance, including anti-corruption and strengthening of public financial management
Commitment to peace, human rights, democratic principles and the rule of law
Commitment to fighting poverty

Most recently some issues related to the underlining principles were taken up in the PRBS Joint Steering Committee meeting on the 3rd of May by the cooperating partners.

We believe that together we can find ever better ways to ensure that development reaches every person in Zambia, more jobs are created and that the country will become more prosperous and assume even more important role as a partner for Finland and other countries in the global arena.

ODA currently corresponds only to less that 5% of the budget and the forms of cooperation between Finland and Zambia are evolving towards more sustainable forms of cooperation, that of cooperation between different institutions and companies of our two countries.

This is also reflected in the composition of our delegation to Zambia today. I am accompanied with my colleague, Dr. Alexander Stubb, the Minister for European Affairs and Trade, and a delegation of Finnish businesses of more than fifteen companies representing different areas of trade.

We are here to touch base with our Zambian colleagues and friends. I am hoping that during this short visit contacts are created between Finnish and Zambian companies, and that those contacts lead to partnerships that strengthen the already strong relationship between our countries. And of course, that some mutually beneficial business ventures are started.