Iceland has influence beyond its size in global development


19/06/2017 - Despite a small aid budget, Iceland stands out among donors for its commitment to supporting the poorest countries and using its expertise in areas like renewable energy, land restoration and gender equality for aid programmes that advance global goals, according to a new OECD report.


The first DAC Peer Review of Iceland finds the country to be an active, flexible and transparent partner whose development efforts benefit from good aid management and a prioritisation of resources since the merger of its bilateral and multilateral aid organisations. Iceland should now focus on ensuring tangible results across all development programmes.


Iceland provided total aid of USD 50 million in 2016, up 11.6% in real terms from 2015 and equating to 0.25% of its gross national income (GNI). In 2015, the year studied in the review, 40.8% of Iceland’s aid went to least-developed countries – mostly to fragile states – a much higher share than the Development Assistance Committee (DAC) average of 28.4%. The top six recipients of Icelandic aid in 2015 were Malawi, Uganda, Mozambique, West Bank and Gaza Strip, Syria and Afghanistan.


“Barely three years after joining the DAC, Iceland is already an active and influential member, capitalising on its domestic strengths to build solutions for least-developed countries that are in line with the global development goals,” said DAC Chair Charlotte Petri Gornitzka. “At the same time, Iceland’s aid budget has not caught up with the robust pace of its economic recovery and Iceland should now do more to meet its commitments.”


Iceland’s aid budget is the smallest of the DAC’s 30 members, but its 0.25% aid to GNI ratio ranked in 19th place in 2016, just below Australia and New Zealand. Iceland’s aid to GNI ratio was 0.36% before the 2008-11 financial and banking crisis. It then dropped to an average of 0.22% over the following five years, prompting Iceland to push back the timing of its long-standing ambition to join donors who have reached a UN target of 0.7%.


As its economy continues to recover, Iceland should use its five-year budgetary framework to increase official development assistance (ODA) in real terms and revive its ambitions to work towards the 0.7% goal, the report says. This should be done in parallel with sharpening development priorities in the wake of the merging of the country’s bilateral aid agency into the foreign affairs ministry in early 2016 and a new government taking office in 2017.


Iceland’s humanitarian budget has jumped from USD 1.03 million in 2012 to USD 5.8 million in 2015, boosted by a USD 3.4 million allocation in 2015 for the Syria crisis. Spending on refugees within Iceland has also risen from 1% of Iceland’s gross ODA in 2013 to 12% in 2015. An additional allocation of USD 15 million (ISK 2 billion) for refugee costs in 2015-16 is helping to avoid refugee costs undermining aid predictability for recipient countries.


Iceland joined the DAC in 2013. Each DAC member is reviewed every five years in order to monitor its performance, hold it accountable for past commitments and recommend improvements. Reviews use input from officials in the country concerned and a partner country – Malawi for this Review – as well as civil society and the private sector. Read more on DAC Peer Reviews.


The DAC Peer Review of Iceland is available at:  An embeddable data visualisation of Iceland’s aid versus other donors is available at:   


For further information, or to speak to the report’s author, journalists are invited to contact Catherine Bremer in the OECD Media Office (+33 1 45 24 97 00).



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