OECD Development Co‑operation Peer Reviews: Finland 2024

Annex A. Progress against the 2017 peer review recommendations

 

2017 Peer Review Recommendations	Progress
1. Apply the 2017 guidelines for civil society, ensuring that partnerships are leveraged to enhance and complement country strategies, that civil society in developing countries is strengthened and local co-operation funds are made more predictable.	Partially implemented Overall Finland has maintained strong engagement with and support for civil society that leverages civil society’s strengths. In countries where Finland has a country programme document, grant applicants are required to align to the strategy. Project duration for local co-operation funds has been extended from one to two years. The MFA’s programmatic funding for Finnish CSOs allows for local partner capacity development, and accessible funding procedures include flexibility for partners to adapt to changes in context. Overall consultation with CSOs on policy appears to have weakened and new ODA conditionalities bring uncertainty for future funding frameworks.
2. Develop an overarching strategic approach for engaging with multilateral partners as a basis for strategic dialogue.	Partially implemented Overall Finland is perceived as a trusted partner keen to ensure stable funding for its multilateral partners and as effective in channelling funds multilaterally in line with its strategic priorities. Two strategic evaluations relating to Finland’s MFA’s multilateral influencing were undertaken in 2020 and 2022. Multilateral partners would welcome more formal partnership agreements to ensure continued stability and clarity around strategic dialogue. Some key multilateral partners express concern about the potential for significant funding cuts in the coming years.
3. Clarify Finland’s approach to partnering and working with the private sector and ensure that this is aligned with development priorities. Build the capacity of the Ministry for Foreign Affairs to co-ordinate and manage private sector instruments, including in field offices.	Partially implemented Instruments, funding mechanisms and key partnerships for working with the private sector have been defined. Internal capacity within the MFA (Development Policy Department) has been strengthened. Country strategies outline how private sector instruments and programmes align with development priorities. However, the MFA is still lacking an overall strategy for how working with the private sector (and use of related instruments) contributes to development impact. There is scope to improve co-ordination and coherence between the MFA’s private sector work within the respective departments of development policy and international trade and across other actors at country level.
4. Enhance the use of results information for multiple purposes (accountability, communication, direction, learning) at multiple levels (corporate, sectoral, project) and align the information to the SDG priorities and results frameworks of partner countries.	Partially implemented Finland benefits from a robust results system that supports the four uses of results data (accountability, communication, direction, learning), and is aligned with the SDGs. The main challenge relates to ensuring systematic implementation of various steps across modalities, and potential changes to how Finland defines its overall objectives (including closer integration of trade and development). Preliminary data from the 4th Global Partnership for Effective Development Co-operation monitoring round show continued good practice in aligning bilateral projects’ objectives to those of partner countries, but less progress on alignment of results indicators and use of partner country data for monitoring.
5. Apply the good practice of mainstreaming gender to improve how environment and climate change adaptation and mitigation are taken into account throughout Finland’s development co-operation.	Partially implemented Finland recognised the need to clarify the definition of its climate objectives, and in 2019 the climate objective was changed to two objectives: climate resilience (adaptation) and low emission development (mitigation) in line with the goals of the Paris Agreement. Work on new cross-cutting objectives to be included in instrument-specific guidelines to better support mainstreaming is ongoing. Finland’s reported share of ODA that is targeting climate and environment objectives (either principal or significant) has increased. In 2021-22, Finland committed 29.7% of its total bilateral allocable aid (USD 211.6 million) in support of the environment and the Rio Conventions (the DAC average was 35.1%), up from 25.3% in 2019-20.
6. Finland should reverse the decline of ODA – including to least-developed countries – and approve a roadmap with annual targets to achieve its commitment to provide 0.7% of GNI as ODA and 0.2% of GNI to least-developed countries.	Not implemented As a share of GNI, Finland’s ODA reached 0.57% in 2022, up from 0.47% in 2021 and 0.42% in 2017. However, the share to LDCs fell to just 0.11%. According to the 2021 report on development policy, Finland is committed to reaching the 0.7% ODA/GNI target and the 0.2% ODA/GNI target for LDCs by increasing the funding for development co-operation gradually and systematically over several parliamentary terms. The target year set for attaining the 0.7% level is 2030, and Finland aims to attain the target of 0.2% of GNI to LDCs as soon as possible. However, a scheduled roadmap has not been prepared to reach these objectives and the ODA/GNI ratio is expected to decrease. As of 2023, Finland’s ODA is projected to decline over the next four years, to 0.43% of GNI in 2024 and 0.36% in 2025, and then to fall to 0.33% in 2028. The 2024 report on trade and development policy does not provide a roadmap for reaching the two targets.
7. Take steps to attract and retain people with sufficient development policy and programming expertise within the Ministry for Foreign Affairs and in embassies. Finland should also invest in greater career planning and learning opportunities for all staff.	Partially implemented Development policy human resources are considered part of the MFA’s overall human resources planning. The total number of staff working on development has not increased and is not expected to increase. A “strategic staff capacity development plan” was approved in 2020 and was implemented from 2021 until 2023. A new plan will be drafted based on a self-assessment and after the current MFA reform processes have been finalised, by 1 August 2024. Development policy and development co-operation staff training have been updated and basic-level training is compulsory for all staff in charge of development co-operation.
8. Ensure that Finland keeps its focus on poverty and untied aid as it increasingly makes investments linked to Finnish businesses.	Partially implemented Finnfund’s ownership steering memoranda for 2017-23 required at least 75% of new investments to be in LMICs or poorer countries. In guidance for its private sector instruments, the MFA has placed a strong emphasis on supporting poorer countries and generating development impact. Finland states that all Finnfund investments are untied. There is a concern in the MFA and among partners that the focus on inequality and poverty is likely to suffer under the growing focus on trade and export promotion.
9. Review and set out guidance by the competent ministries on how to apply the Discretionary Government Transfers Act and other legal frameworks, with a view to fostering innovative partnerships, including in complex fragile environments.	Partially implemented Since 2017, new partnerships with the UN and World Bank and with civil society and start-ups have been forged in fragile and conflict contexts. The 2021 mid-term review found that MFA teams are increasingly working together early on when a new initiative and partnership are being considered for funding to determine what is possible and identify any roadblocks ahead of time. However, legal restrictions related to discretionary government transfers continue to pose barriers, including for Finnfund.
10. Develop a comprehensive overview of Finnish activities in long-term partner countries.	Partially implemented Country strategies were drafted for all long-term partner countries and approved by management of the relevant regional department in 2020. The strategies cover the period 2021-24 and identify different policy sector country-level actions, development co-operation, foreign and security policy, and trade relations and how these are linked to Finland’s strategic goals in the country. All country strategies expire in 2024 and plans to develop new strategies have been delayed, awaiting publication of the new policies on foreign and security policy and trade and development co-operation which were published in June and July 2024 respectively. Some embassies have developed a comprehensive list of all Finnish activities in the country to complement country strategies. and reflecting the need to manage fragmentation.
11. Ensure that risk management actions are built into programme design and implemented, and that risks are regularly monitored.	Implemented The MFA’s 2021 ODA risk management policy requires systematic assessment of risks in all stages of project management. Risk assessment and risk management plans are compulsory for all new financing decisions, and the MFA has invested in strengthening guidance and practices to support these. At the same time, evaluations find that there remains scope to build a stronger culture of risk management within the MFA, including to support greater risk tolerance, and the MFA highlights challenges around human resources in terms of fully implementing its risk management policies. The shift in focus towards a greater use of private sector investments and instruments in contexts such as Ukraine will also necessitate continued reflection on risk management practices.
12. Finland should expand the use of existing knowledge platforms and develop a system that can easily connect officials, partners and other stakeholders with relevant information and evidence to improve decision making.	Partially Implemented Since 2017, the MFA invested heavily in strengthening the strategic management, operational processes and guidance for staff related to Finnish development co-operation. This included updates to various MFA knowledge management platforms and tools. At the same time, recent evaluations on the use of evaluative evidence in decision making and discussions during the peer review suggest there is continued room for improvement in this regard.