The DAC recently conducted a special review of Iceland and concluded that it has established a legal foundation for its development co-operation, a comprehensive strategy and a clear commitment to increase its aid budget despite a challenging economic context. Iceland is a small donor, but compares favourably to several strong DAC performers in many areas. In 2011, Iceland’s ODA stood at USD 26 million, equivalent to 0.21% of its national income.
Iceland's legal and policy framework bring together all of their development co-operation - bilateral, multilateral and humanitarian - and are backed up by a strategy that has been adopted by the Parliament. These development co-operation strategies and policies are generally in line with DAC good practice.
Iceland: Taking the initiative on aid effectiveness
Iceland has engaged in the international aid effectiveness forums over the last six years, and has endorsed the Paris Declaration on Aid Effectiveness; the Accra Agenda for Action (OECD, 2008) and the Busan outcome document (Fourth High Level Forum, 2011). However, as Iceland was not a DAC member at the time, they were not part of the monitoring process for the Paris Aid Effectiveness targets and therefore had not been assessed against the targets. In 2011, Iceland’s bilateral aid agency – ICEIDA - under its own initiative, carried out a systematic assessment of its progress in meeting the Paris Aid Effectiveness Declaration targets. This followed changes in ICEIDA’s legal statutes in 2008, which have enabled ICEIDA to be more able to legally deliver aid in the ways outlined by the Paris Declaration. As a result of its own assessment, ICEIDA has established an ambitious and clear timetable for meeting some of these by 2014. For example, it has set itself the target of ensuring that 70% of its ODA uses partner countries public financial management systems in 2014. In 2009, only 2% went through country systems.