Austerity measures in development cooperation are specified

The budget reductions set out in the Government Programme will focus especially on region and country-specific development cooperation. The Country Programmes with Afghanistan, Kenya, Mozambique and Myanmar will be discontinued during the government term. Reductions will also be made in multilateral cooperation, humanitarian assistance and development policy loans and investments.

As outlined in the Programme of Prime Minister Petteri Orpo’s Government, funding for exclusive development cooperation administered by the Ministry for Foreign Affairs and development policy loans and investmentswill be reduced by a total of EUR 1,030 million compared to the previous budgetary framework during the government term.

The biggest reductions concern country- and region-specific cooperation, which will see a total reduction of slightly over EUR 500 million during the spending limits period. The overall amount of multilateral cooperation will decrease by around EUR 160 million. Humanitarian assistance will see a reduction of around EUR 130 million. The reduction will be made in the exclusive ODA budget item. Preparations have been made to duly respond to Ukraine’s humanitarian needs as part of the overall support to Ukraine. In addition, development policy loans and investments will be cut by EUR 60 million annually.

“The cuts are intended to implement the policies outlined in the Government Programme and take into account the commitments that have already been made. It is better to focus adjustments on clearly defined areas of development cooperation than to make equal cuts across the board,” says Minister for Foreign Trade and Development Ville Tavio.

Finland’s support to Ukraine continues to be unwavering. During this parliamentary term, Ukraine is by far Finland's biggest partner country in development cooperation. Intergovernmental cooperation will also continue in Ethiopia, Nepal, Somalia and Tanzania. In Palestine, cooperation will continue on the basis of a report completed in December, taking into account changes in the operating environment.

The Country Programmes with Kenya and Mozambique will be discontinued in a controlled manner during the current government term. In Asia, the greatest reductions will be made in the development cooperation budgets for Afghanistan and Myanmar. Finland does not cooperate with the governments of these two countries.

In addition to the Country Programmes, adjustments will be made across the board in development cooperation. Last autumn, cuts were made to the Green Climate Fund and the International Fund for Agricultural  Development (IFAD), which is a UN organisation.

The reductions will be gradually implemented towards the end of the government term to enable controlled adjustment and efficient planning of development cooperation appropriations. The current Country Programmes will continue until the end of 2024. In 2024–2025, decisions will be made on the continuation of support allocated by country and on new funding rounds for civil society organisations and development banks.

In the coming years, the exclusive ODA budget item will vary between EUR 600 and EUR 630 million per year. Additionally, development policy loans and investments amount to EUR 70 million per year. Ukraine will receive EUR 58 million annually through a separate budgetary item. The priorities for the government term will be specified in the report on Finland’s international economic relations and development cooperation in spring 2024.