Tuesday, 02 September 2014

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Iceland's development aid caught in a merry-go-round

Iceland development

The Icelandic Parliament adopted the 2014 budget just before Christmas, with severe cuts to Iceland´s development cooperation - less than a year after virtually unanimously voting on a resolution to increase it considerably.

In February 2013, the Althing, the Icelandic Parliament, voted with only one dissenting vote to increase the development budget from 0.26% to 0.28% of GNI in 2014 and to reach the UN target of 0.7% by 2019.

Only ten months after the February resolution, however, the Althing decided to cut development aid to 0.23% of GNI in 2014. This is considerably less than the other Nordic countries‘s aid percentage. The three Scandinavian countries contribute around 1% to development cooperation and Finland 0.6% - and all are either continuing at the same level or even increasing their budgets. 

In the first draft of the budget, it was proposed that aid should remain at the 2013 level, but the majority of the Althing´s Committee on Finance had other ideas: to strengthen the health sector through funds taken from development aid.
All in all the Committee proposed a 35% cut. Its chairman, Vigdís Hauksdóttir, was the only Member of Parliament to vote against the February development resolution.   

The centre right won the April 2013 elections to the Althing, and subsequently, the Independence Party and the Progressive Party formed a coalition government.

“This issue was not discussed at all in this year´s electoral campaign, except by the Progressive Party´s populist arm. But it is clear that these cuts do not harm support for the government coalition, perhaps the contrary,“ says political commentator Egill Helgason, in an interview with the Newsletter.  

Reactions to the Committee on Finance´s proposed cuts were harsh, not least in social media. Critics pointed out that no sooner had the government taken power than it cut taxes on the lucrative fishing industry. The amounts in question would have covered not only the proposed cuts in aid, but the whole development budget. As a matter of fact, one company´s profits from fishing in the economic zone of African nations would have covered the entire devel-opment budget, according to an investigative report in the daily newspaper DV.

Award winning author Jón Kalman Stefánsson wrote in an op-ed that the cuts were “cold and cruel…“ and amounted to a dangerous lack of decency.“  

"Many of the Members of Parliament of the governing coalition are young and have small children. Can they vote for this resolution and then go home and look their children in the eyes without blushing, having  if not sentenced children in faraway countries to death, at least decreased their chances of having a decent life, fit for human beings“, wrote Mr. Stefánsson.  

Even the Foreign Minister, Gunnar Bragi Sveinsson, opposed the cuts. A third of the cuts were returned but the development budged was nevertheless deeply affected.  

"I cannot remember such reactions in the last seven years that I have followed closely the debate on international development cooperation in this country,“ says Gunnar Salvarsson, chief of communications of ICEIDA, the Icelandic Development Agency,  in an interview with the Newsletter. "It is striking how positive in general Icelanders are when it comes to development cooperation, although it should not come as a surprise given the results of  a recent opinion survey.“

More than 90% of Icelanders supported the current or increased levels of devleopment aid in a survey conducted in October 2013.

Stefán Ingi Stefánsson, the General Secretary of UNICEF Iceland,  calculated that up until  2013 Iceland had actually received more funds in development aid than it had donated. Iceland even received a substantial Marshall aid, although it did not suffer any damages in World War II. It also received funds from UNDP, the UN Development Programme, as late as the late 1970s.  

"In other words, in this year of our Lord, 2013, we have at last given more than we have received. That is beautiful,“ wrote Mr. Stefánsson

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