Results even in exceptionally difficult times

Crises have shown that development cooperation is a key instrument of Finland's foreign and security policy. Results are achieved through cooperation.

The Report on Development Policy Extending Across Parliamentary Terms adopted by Parliament in February 2022 states that development policy is an integral part of Finland's foreign and security policy, which aims to strengthen security and well-being through international cooperation. In its memorandum on the report, the Parliamentary Foreign Affairs Committee states that while participating in solving global problems, Finland will also strengthen its foreign policy, economic position and international policy influence.

This report presents the results of development policy and cooperation for 2019-2021 in both the five priorities selected by Finland and humanitarian aid. In addition, the report describes the implementation of development policy and external evaluations as well as the response to the recommendations included in the previous results report issued in 2018. This report also responds to the observations made by the parliament concerning the Report on Development Policy Extending Across Parliamentary Terms.

Finland's development policy and cooperation meet their objectives and produce results. By operating as part of the Nordic group and the EU and participating in multilateral cooperation, Finland supports sustainable development globally through promoting its key values and objectives. In addition to funding, the results are influenced by the innovations, dialogue and policy influence created in the programmes. The significance of these is difficult to analyse, which is why the report mainly presents the overall results of the programmes, without specifying Finland's contribution.

Appropriations grew in 2019-2021

Official development assistance is divided into exclusive and other official development financing. In 2021, exclusive development financing accounted for 60.5 per cent of the total. Statistics for other development cooperation include the costs related to the reception of refugees, the share of development cooperation in the EU budget, as well as loan and investment type of development financing.

  • E: Exclusive official development assistance
  • O: Other development cooperation

Download data file 1 Download data file 2 Source: MFA

Global context has grown more difficult

The period covered by the results report has been exceptional in many ways. The COVID-19 pandemic, conflicts, increased authoritarianism and climate change as well as migration caused by these circumstances have turned the development trend globally and locally - including in Europe. In addition, international policy and competition between super powers also impact development policy. For example, China's increased role and influence are reflected in the country's presence in developing countries, in its nominations in UN organisations and in its funding. China is also challenging the current multilateral system with its own development and security initiatives.

These changes have highlighted the importance of development policy as part of Finland's foreign and security policy. When developing countries face crises, a significant share of Finland's support is funded from development cooperation appropriations.

As a result of the COVID-19 pandemic, the inequality both between rich and poor countries and within countries has further increased. The pandemic highlighted shortcomings in both the crisis resilience and security of supply in many countries. Finland responded quickly to international needs. In 2021, Finland donated EUR 15.6 million worth of COVID-19 vaccines to be distributed through the COVAX AMC mechanism and supported the mechanism with EUR 15.2 million through vaccine alliance Gavi.

Ongoing development cooperation programmes, for example in the education and water sectors, were adapted to respond to the changed situation. In addition, Finland directed funds to humanitarian aid. Thanks to international support and solidarity, many developing countries received support for the financial consequences of the pandemic and avoided becoming insolvent.

Finland's development cooperation expenditure is of EU average

In 20211, Finland's development cooperation expenditure totalled EUR 1,214 million. Expenditure rose due to loan and investment type of development financing that included EUR 175 million to development cooperation.

Download data file Source: OECD

Value-based development policy

Development cooperation is a means, not the goal. Finland's objective is to support developing countries so that in the future they can be responsible for the well-being and livelihoods of their citizens, as well as the stability of society. For this reason, Finland supports structural, system-level reforms - from strengthening school systems to developing social security, taxation and international corporate responsibility.

Development cooperation is a means, not the goal.

Development policy often responds to the same questions that have been discussed also when developing the Finnish society. As a nation, Finland has built maternity health services, energy efficiency and many other technological and social innovations, which can now play an important role in achieving the Sustainable Development Goals.

With a strong value base, the promotion of human rights, the rule of law, democracy, peace, freedom, non-discrimination and equality steer all development policy activities by Finland. The global increase in authoritarianism has further underlined the importance of promoting democracy and the rule of law, as well as strengthening civil society activities in developing countries.

A significant part of Finland's development cooperation focuses on so-called fragile countries and situations where the need for assistance is greatest. It has been estimated that up to 2/3 of the world's poorest people live in fragile countries or those afflicted by violence or conflict. Operating in poor countries with weak governance inevitably poses risks to work. Thus, anticipating and managing these risks is a key part of the implementation of cooperation.

Development policy promotes values and objectives that are important for Finland.

Supporting people who live in difficult circumstances and are in the most vulnerable situations is often most difficult, expensive and uncertain. Nevertheless, in accordance with the objectives and principles of Finland’s development policy, it is the most important in order to achieve lasting change.

Towards international goals

Share of development cooperation payments, as % of Finland’s GNI. In 20212, the share was 0.48% of the GNI and 0.15% of the GNI was steered to the least-developed countries in the world.

Download data file Source: MFA Finland

Longevity, continuity and predictability bring results

Finland has reinforced the long-term nature and consistency of development policy during the reporting period. In line with the Report on Development Policy Extending Across Parliamentary Terms(Link to another website.), Finland will focus its work on five priorities: (I) women's and girls' rights, (ii) education, (iii) sustainable economy and decent work, (iv) peaceful, democratic societies and (v) climate change, biodiversity and the sustainable management and use of natural resources.

In accordance with the report, in its development policy Finland focuses on areas of strength in which Finland has the best potential to support sustainable development and which are particularly important in achieving interconnected sustainable goals.

Work in the focus areas is guided by the theories of change, which describe what the aim is both in the short and long term, and which factors affect the achievement of the objectives. The performance maps and the related aggregate indicators can be found in Appendix 5 of this report. The information management system introduced in 2019 will assist in monitoring the results.

Strategic priorities are reflected in funding decisions

Funding decisions for 2019-2021, distributed by which development policy priority areas they support primarily. The decisions listed in the ‘Others’ section focus on several priority areas and include, for example, core funding for multilateral actors.3

Download data file Lähde: MFA

Overall picture of cooperation has changed

The report also describes changes in the nature of Finland's development cooperation. This, such as the impact of the 2016 budget cuts, is reflected in the results with a delay. Traditional projects managed by Finland itself have decreased and the focus has shifted to cooperation through international organisations, financial institutions and the EU. The change is reflected in the fact that many cooperation projects in Finland's traditionally strong water, forest and food sectors have ended. At the same time, the significance of policy influence in the direction of multilateral organisations, financial institutions and the EU has increased.

In order for Finland to be able to respond to the ever-changing demands of development cooperation, different forms of cooperation must be utilised in the best way possible. At the same time, the foreign affairs administration must give special attention to the allocation and steering of resources, the strengthening of competence and the training of personnel also in the future.

The COVID-19 pandemic increased cooperation on health issues

Payments to selected sectors in 2021, 2017, 2012 and 2006 according to the OECD/DAC classification. The sector's funding may be increased in a single year by one-off payments to multiannual programmes.4

  • * Education 2021p (84,4): Includes EUR 25 million of funding for the Global Partnership for Education.
  • ** Energy 2017 (70,0): Includes an investment of EUR 68 million in the IFC climate fund and EUR 5 million (net) in capital returned from Finnfund’s investments. EUR 7 million appropriated to exclusive ODA budget item.
  • *** Health and population policy 2021p (38,1): Includes EUR 15.3 million of funding related to the COVID-19 pandemic for the GAVI vaccine alliance.

Download data file Source: MFA

Appropriations have grown

The Report on Development Policy Extending Across Parliamentary Terms aims at securing the resources used for development cooperation. Finland is committed to the UN target of spending 0.7 per cent of its gross national income on development cooperation.

The current parliamentary term has given strong support to development policy. In 2019-2021, appropriations increased steadily and in 2021, they reached the level they were at prior to budget cuts implemented in 2016.

When reviewing the development cooperation payments during the reporting period, it is apparent that the development of public administration, society and education has remained as the largest sector. The development cooperation by civil society organisations has grown steadily during the government term, and funds for conflict prevention and humanitarian aid have been increased. Between 2019 and 2021, 76 per cent of the Ministry for Foreign Affairs' entire development cooperation funding was allocated to actions that included objectives that promoted gender equality. The human rights-based approach to development cooperation has also become more pronounced.

The share of other development cooperation payments of all development cooperation funding has increased since 2016. This growth is particularly explained by loan and investment type of development financing, which supports, in particular, climate action in developing countries, as well as economic development and the private sector more extensively. The capital invested in them will return in the long term.

Programmes continue across government terms

Exclusive official development assistance budget item payments, on the basis of the government term during which the decision to launch the programme was made 5.

Download data file Source: MFA

Praise from the OECD

In recent years, development cooperation management systems and risk management have improved. Transparency in the use of funds has also improved, as required by the parliament. At the end of 2021, the Ministry for Foreign Affairs published the OpenAid.fi(Link to another website.) website, which explains where, how and when Finland's development cooperation funds have been used.

The reforms have brought Finland praise from the OECD Development Assistance Committee (DAC). Thanks to streamlined systems, Finland has also been able to respond flexibly and efficiently to the challenges posed by factors outside our own influence. Together with its partners, Finland has produced concrete results that improve the functional and crisis resilience of people and societies in developing countries. The DAC states that this is due to the long-term priorities set out in Finland's development policy, our flexible way of working with our partners and our ability to influence global actors.

The share of loan and investment type of development financing among all funding has grown

Breakdown of funds by modality and/or partner 2006-2021. Includes payments of official development cooperation and investments made by Finnfund in other development cooperation (net) as well as loan and investment type of development financing.

  • 2015: The nearly 40 per cent budget cut in development cooperation financing targeted multilateral cooperation the most.
  • 2016: A new development policy investment item was introduced. The first funding decision was a convertible bond of EUR 130 million for Finnfund, entered as a payment at a later stage.
  • In 2020, the COVID-19 pandemic and conflicts increased the share of humanitarian assistance.

Download data file Source: MFA

Strategic longevity pays off

The results of development cooperation can be seen over different time periods. A good example of this is Nepal, with whom Finland has engaged in systematic cooperation for a long time. 
The results of development policy and development cooperation can be divided into outputs, outcomes and impacts. For example, in cooperation with the field of education, an output may be a rewritten textbook or a teacher who has received training. Examples of outcomes include reformed teaching methods while those of long-term impacts include improved learning outcomes. 

Some of the results and impacts of development cooperation are concrete, while others are more difficult to discern. For example, influencing people's attitudes is work that produces results slowly. 

The further we proceed in the results chain, the more the impact of action taken by other actors beside Finland grows. If the situation changes, the implementation of the programmes will be altered. At the same time, however, conflicts and crises cannot be solved through development policy instruments alone, and other tools, such as crisis management and peace mediation, are also needed.


Results visible in Nepal

Nepal, with whom Finland engaged in cooperation since the 1980s, is a good example of the different timeframes of results, the multigenerational nature of societal changes and the importance of a long-term partnership. 

Finland has supported Nepal in forestry, water management, improving sanitation and hygiene, and in the education sector. Finland has also resolutely worked to promote the realisation of women's and girls' rights. The support has been based on the country's own development plans and jointly agreed objectives. Nepal's own commitment to the objectives is illustrated, for example, by the fact that the country’s government has financed a large part of the joint programmes itself, from state level to communities.
In the early years of cooperation, Nepal was one of the poorest countries in the world, where only one in five people could read. During the partnership, the country has faced civil war and natural disasters, but in spite of them, poverty has decreased, literacy rates have risen and clean water is available to almost everyone. The country is expected to graduate from the least developed countries category to that of lower-middle income countries in the next few years.
The timeline illustrates how long-term cooperation has adapted to changing challenges and contributed to the development of Nepal. 

Local ownership plays a key role

According to evaluations, good results are produced by such things as close dialogue with the partner country.
According to evaluations, Finland's work responds to the correct need. Furthermore, a systematic long-term approach, local ownership by actors in partner countries and close cooperation with different partners and networks have contributed to effectiveness of development cooperation. Relying on development policy priorities, country strategies and programmes as well as a comprehensive network of embassies will also promote effectiveness and resource allocation. In addition, Finland is known as a flexible actor capable of seizing new opportunities and adapting to changing situations.
 
Analysis of monitoring data at the level of development policy, priorities, forms of cooperation and projects will help the Ministry for Foreign Affairs to steer its work towards better results. In the current increasingly difficult circumstances, performance comes about from supporting local ownership, engaging in cooperation with different actors, creating a clear profile and expertise, and engaging in active political dialogue.

Results visible in Nepal

1980

 
1983: Finland's development cooperation begins.
1980
Child mortality among children under 5 years of age: 20.8%.
1981
Nepal led by a king. Economy in trouble.
1981
2% of the population have access to sanitation systems.
1985
Nepal opens its economy, trade is freed and industrialisation begins.

1990

 
Finland supports:
  • Forest management and administration
  • Map production
  • Access to water and sanitation
  • Education sector
1995
45% of the population live in extreme poverty.
1996
Civil war begins and the economy begins to deteriorate. Many migrate to work in other countries.

2000

 
Development cooperation priorities:
  • Local ownership
  • Sustainability of results
  • Gender equality

Remittances maintain the economy.

Finland supports the peace process and the development of the judicial system.

2000
36% of girls and 20% of boys out of school.
2000
NWomen make up 6% of Parliament.
2006
The civil war ends.
2008
Nepal abolishes the monarchy.
2008
Women make up 33% of Parliament.

2010

 
2011: Finland supports women affected by the conflict in accessing different forms of support.

Finland supports access to clean water and sanitation along with continued school attendance.

Development cooperation highlights local ownership and gender equality in decision-making.

2010
25% of the population live in extreme poverty.
2015
9,000 people die in an earthquake.
2015
The new Constitution strengthens women's participation in local decision-making.
2015
The economy takes a hit due to the Indian embargo.
2017
Nepal becomes a federal state.
2019
All people in Nepal have access to sanitation.

2020

 

Finland supports distance learning methods, the access to water and sanitation services and the prevention of violence against women and girls. Finland sends a cargo plane filled with material assistance through the EU rescue mechanism to Nepal.

2022: Suomi julkaisee siirtymäkauden strategian yhteistyölle Nepalin kanssa.

2020
71.1% of children and young people complete lower secondary school.
2020
The Covid-19 pandemic interrupts school attendance. Poverty increases.
2022
The transition period during which Nepal will become a middle-income country begins.

Ukraine receives extensive support also through development cooperation

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Russia's large-scale illegal invasion of Ukraine in February 2022 has caused enormous human suffering in Ukraine, while also destroying infrastructure and the environment. The country's economy has collapsed and poverty has increased. A third of the population has been forced to flee their homes: around 7 million Ukrainians have been displaced by war within their country and nearly 7.5 million have fled to other European countries. Some 40,000 Ukrainians have applied for temporary protection in Finland.
 
The invasion also has extensive global impacts. The more precarious security situation, the increase in forced displacement and the deterioration of food and energy security are particularly evident in countries that were dependent on imports of cereals or energy from Ukraine and Russia. The cereal shortage also influences the work of aid organisations. One half of the cereals purchased by the World Food Programme (WFP) for countries including Afghanistan and Yemen previously came from Ukraine and Russia. According to the UN, the impact of the Russian illegal invasion has the most catastrophic impacts on 69 countries, with 1,2 billion inhabitants.
 
The international community has supported Ukraine with many ways. Moldova, which has taken in refugees from Ukraine, has also received aid. In addition to military and material assistance to Ukraine, a significant part of Finland's support to Ukraine comes from development cooperation funds. Since February 2022, Finland's support has both been increased and adjusted to respond to the acute emergency and to strengthen society in the midst of war. The aim is also to limit the negative long-term impacts of the war and to prepare for the recovery of society from the war. Finland has granted Ukraine an additional EUR 91 million in aid through development cooperation and humanitarian aid in 2022. 

Finland's longer-term support for the development of Ukraine will also continue. Finland's objective is to strengthen the crisis resilience of Ukrainian society and to support the country's own reforms in the long term. This is done especially by supporting the development of basic and vocational education, the development of rule of law, sustainable energy and climate solutions. 

Persistent efforts to advance gender equality

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Gender equality is one of the key objectives of Finland's development policy and cooperation. It is promoted in all development cooperation. In addition to funding, Finland promotes equality through policy influencing. 

According to evaluations, the promotion of gender equality has been Finland's most effective and visible development policy theme of influence. In this report, these results of advocacy work are presented in connection with all priority areas. 

Finland's key partner in the promotion of gender equality is UN Women, whose largest single donor Finland has been in recent years. The strategic nature of the partnership is enhanced by the fact that UN Women's task is to ensure that gender equality is taken into account in all UN activities. For example, the organisation ensured that a gender perspective was at the centre of the UN's COVID-19 response Finland has also ensured that a gender perspective is strengthened in various international organisations, such as the UN’s children’s organisation UNICEF, the World Food Programme (WFP) and the Food and Agriculture Organization (FAO). Together with the other Nordic countries, Finland influenced the quality, implementation, and impact assessment of the World Bank's Gender Equality Strategy.

Finland's role in promoting gender equality has been further emphasised as the rights of women and girls are challenged globally. Together with like-minded countries, Finland has ensured that internationally agreed standards related to the rights of women and girls are not weakened. As a member of the UN Human Rights Council 2022-2024, Finland also emphasises the rights of women and girls. In the current challenging circumstances, Finland has opposed attempts to weaken gender equality and the rights of persons with disabilities, and has promoted addressing multiple and intersecting forms of discrimination.

Development policy guidelines decided on and drawn up in 2019-2021

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  • Finland as a donor of humanitarian assistance (2019)
  • Action Plan for Climate Smart Foreign Policy and the establishment of a climate network (2019)
  • Development policy investment plan (2019)
  • Taxation for Development Action Programme (2020)
  • Guideline for the implementation of cross-cutting objectives (2020)  
  • Guidelines for the coordination of development, humanitarian aid and peace work (2020)
  • Report on Development Policy Extending Across Parliamentary Terms (2021)
  • Tax Responsibility Principles in Finland’s Development Cooperation Funding to the Private Sector (2021)
  • Plan for the Implementation of Finland’s Public International Climate Finance (2022) 
  • Outlines for Sustainable Development Financing (2022)
  • Guidance note: The triple nexus and cooperation with fragile states and regions (2022)

What progress has been made in the conclusions of the 2018 results report?

The 2018 results report contained six conclusions that aimed at developing operations. The plusses illustrate the response to the recommendations and the minuses illustrate the things that require improvement.

  1. Finland should focus its resources towards the most important objectives.
    • More attention has been given to gender equality, education and climate.
    • Bilateral cooperation country strategies and programmes 2021-2024 and plans for influencing multilateral cooperation have been prepared to support the attainment of outcomes and outputs.
    • The GNI share of development cooperation has increased from 0.36 per cent (2018) to 0.47 per cent (2021p).
    • The loan and investment type of development financing decided upon is expected to leverage more than EUR 1.7 billion in other financing for climate and development finance.
    • The Report on Development Policy Extending Across Parliamentary Terms sets the target GNI at 0.7 per cent for 2030. However, there is still no roadmap with timetables and interim goals towards reaching the target.
  2. Results require long-term commitment and responsiveness.
    • The Report on Development Policy Extending Across Parliamentary Terms (2022) strengthens the long-term nature of development policy and cooperation.
    • Finland has been able to adapt its operations quickly and flexibly in the midst of the COVID-19 pandemic and other changes in the operating environment.
    • The adaptation of the country programmes to changes has been increased.
    • Commercial cooperation has been increased in partner countries, where the country’s development has made it possible.
    • The COVID-19 pandemic saw the realisation of a risk, the scale of which we were not prepared for. Conflicts and natural disasters also caused backsliding in the development achieved in the past and slowed down the implementation of cooperation programmes.
  3. Adhering to values makes the policy more impactful.
    • Finland has promoted the realisation of human rights, democracy and the rule of law extensively as an integral part of foreign policy.
    • The human rights-based approach to development cooperation has been strengthened.
    • Gender equality funding has increased. Finland requires its partners to implement principles and standards that prevent sexual exploitation, abuse and harassment. The Finnish Foreign Service's own preventive guidelines are also under development.
    • Finland’s international profile as an advocate of the rights of persons with disabilities has grown, and accessibility is better taken into consideration in development cooperation.
    • Climate finance is on a solid growth path; Finland’s Action Plan for Climate Smart Foreign Policy and Finland's Plan for the Implementation of International Climate Finance (2022) strengthen climate action.
    • The GNI share of the least developed countries has increased from 0.11 per cent (2018) to 0.15 per cent (2021p).
    • Funding for promoting the rights of persons with disabilities has remained low.
  4. Fragile states and countries affected by conflicts must be supported to get back on their feet.
    • Finland has continued to support fragile countries and regions because the need for assistance is greatest there.
    • Finland has comprehensively supported Afghanistan, Myanmar, Ethiopia, Somalia, the Palestinian Territory, Syria and Iraq.
    • Finland has created triple nexus guidelines for supporting the coordination between humanitarian aid, development cooperation and peace actions.
  5. 5. Reforms in development cooperation practices and development finance need to continue.
    • Theories of change for development cooperation priority areas and humanitarian aid as well as the new information system support the planning, reporting and guidance of cooperation.
    • Loan and investment type of development financing has become an established part of Finland's development cooperation.
    • Risk management in development cooperation has been reformed and the risk management policy for development cooperation was completed in 2021.
  6. A more comprehensive approach can lead to better development results.
    • The Report on Development Policy Extending Across Parliamentary Terms and the Africa Strategy encourage cooperation between different actors.
    • Country strategies aim to expand and diversify partnerships.
    • The Action Plan for Climate Smart Foreign Policy, the Rule of Law Centre, the Finnish Centre of expertise in Education and Development (FinCEED) and the work carried out in the field of water diplomacy strengthen cooperation across sectoral boundaries.
    • The combination of public and private funding has increased the overall funding of sustainable development and its development impacts.
  • 1

    Preliminary data, OECD.

  • 2

    The data for 2021 is preliminary. Later, this will be marked as 2021p.

  • 3

    The entries are made on the basis of target-setting in connection with new funding decisions. The alternatives are primary or significant objective. 

  • 4

    The figures only include selected sectors. Moreover, they do not include payments that are not allocated to individual sectors (such as administrative expenditure, humanitarian assistance and core funding of multilateral organisations). 

  • 5

    The bars depict payments made during each calendar year. The payments are divided by government term, according to the government that made the last funding decision concerning the payment.