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The new Danish coalition government’s changed approach to development

After Denmark’s General Election on 15 September 2011 a period of 17 days of intense and hopefully thorough negotiations followed between three opposition parties, which eventually led to a centre-left minority coalition on the 3 October based on a 76-page Government Programme. This has brought 10 years of right-wing coalition government to an end, and has provided an opportunity to review and revise Denmark’s foreign policy. Pages 37-41 of the Programme is devoted to four main development cooperation components: (1) poverty and global inequality; (2) democracy and human rights; (3) international peace and security; and (4) climate change and energy policy. At first sight it seems that the new government intends to continue the previous coalition’s development orientation and strategy. However, as always, the devil is in the detail.

In February 2010 the now-outgoing right-wing Government introduced a very ambitious domestic oriented programme based on 10 goals to be achieved by 2020. This 38-page programme devoted only one and a half pages to international cooperation, with the government summarising its own performance by stating that Denmark is one of the strongest proponents of Free Trade with a non-discriminatory approach to trade relations and competition, as well as having a strong and committed international aid programme focusing on poverty reduction. Danish foreign policy was oriented towards the advancement of freedom, e.g. freedom from fear and poverty. The latter objective became the workhorse of Mr Søren Pind, Denmark’s most ‘liberal’ Minister of Development Cooperation since the office was established in 1993. There were five development components of the active foreign policy, namely: (A) free trade (e.g. completion of the WTO’s Doha Development Round); (B) human rights and democracy; (C) Official Development Assistance (ODA) (e.g. more focused assistance and value for money through evaluation and communication, as well as the funding of a new international research project coordinated by WIDER from 2011 to 2013 to show what works in development cooperation, while preventing ODA/gross national income (GNI) from falling below 0.8% in line with the 2002 Monterrey Consensus); (D) international cooperation on climate (e.g. the COP15 chairmanship); and finally, (E) peace and stability.

Denmark spends around DKK 15 billion (around £1.767 billion) per year on ODA, subject to a continued policy that ‘money should be used where it produces most development’. DANIDA’s Programme and Project Orientation (PPO) is a database of objectives, results and the status of Danish development assistance in terms of goal fulfilment in individual programmes. Every year, the Minister for Foreign Affairs submits an evaluation programme to the Danish Parliament’s Foreign Affairs Committee for comments, alongside submission of an annual report on the activities of DANIDA’s Evaluation Department for the previous year. The latest Report for 2010 included six evaluations (three at country level, two sector evaluations and a multilateral evaluation of UNHCR), with a total of 277 out of 315 objectives achieved in 2010 (88%).

In addition, the latest OECD DAC Peer Review of Denmark published on 30 March 2011 examines the country’s progress against recommendations from the previous 2007 DAC Peer Review of DANIDA’s policies and programmes. It finds that:
  • Three out of four recommendations from 2007 regarding the ‘overall framework and new orientations’ were fully implemented and one partially implemented by 2011.
  • Of three recommendations concerning ‘promoting policy coherence for development’, one was implemented, another partially implemented and one hadn’t been implemented by 2011.
  • Both recommendations concerning ‘aid volume and distribution’ were implemented.
  • Four out of five recommendations regarding ‘aid management and implementation’ were implemented.
  • Finally, both recommendations from 2007 concerning ‘humanitarian aid’ were implemented by 2011.

So, given the positive results from both internal and external evaluations of Denmark’s development cooperation policies and programmes – in addition to the continued public support and understanding that Danish ODA has within parliament, civil society and among opinion leaders – this begs the question as to whether last week’s change of government ought to lead to a continuation or a more abrupt change in foreign policy, as in the UK (e.g. with an increased focus to show that aid works through using an evidence-based approach – see the appointment of Stefan Dercon as DFID’s new chief economist). This is a legitimate concern since African countries, which received an average of nearly 50% of Denmark’s gross bilateral ODA in 2008-09, do not know how much development assistance they will receive in the coming years. This lack of predictability in aid disbursement makes it difficult for these developing country governments to plan public investments and current expenditures.

On closer inspection of the new coalition’s Programme, it seems that the previous government’s emphasis on private-sector driven and market-based economic growth and free trade will be complemented by closer collaboration with, and increased ownership by, recipient countries through General Budget Support coupled with an entitlement approach. Or, in the spirit of this week’s Nobel Prize, it seems DANIDA has partially replaced its ‘ideological’ sources of inspiration of Friedrich Hayek and Bertil Ohlin with Amartya Sen.

Denmark’s new Minister of Development Cooperation, Dr Christian Friis Bach, should certainly be congratulated for having reconfirmed the country’s intention to implement the Paris Declaration on Aid Effectiveness and honour its commitment to increase ODA despite the ongoing global financial crisis, although no fixed deadline has yet been set, unlike the UK’s deadline of 2013.