Denmark was among the most generous aid donors from 1960 to 2000. A new government in 2001 reduced Danish assistance considerably and put more emphasis on security issues. Denmark now has a renewed focus on aid, particularly in Africa.
Denmark did not get involved in development cooperation until the early 1960s. However, it quickly agreed to adopt the UN standard of rich countries dedicating 0.7% of their gross national product (GNP) to official development assistance (ODA). By1979, in spite of its relatively late start, the country was among the first to attain this target.
In 1992, Denmark’s ODA passed the 1% mark, and with minor fluctuations it stayed at that level for the next nine years. In 1993 Denmark began giving special environmental assistance to both low- and medium-income countries. This new form of assistance was introduced following the Rio Conference on Environment and Development in 1992 to aid developing countries in achieving more environmentally friendly development. The Danish parliament, or Folketinget, set the target for environmental assistance – in addition to development assistance – at 0.5% of its GNP.
Over the years, Danish political parties have held different views on development assistance. Right-wing parties such as the Progress Party and the Danish People’s Party were very critical of large-scale government spending on assistance. The extreme left wing argued that assistance was overly supportive of the Danish business community. But the dominant parties – both in the traditional labour movement, the centre and the centre-right – agreed that Denmark had a duty in the world, and that it benefited Denmark to fulfil. Doing so made little Denmark ‘larger’ on the world scale.
In 2001 the political situation in Denmark changed drastically. At the parliamentary elections the social-democratic minority government under Poul Nyrup Rasmussen lost to a coalition of two centre-right parties: the traditionally liberal Venstre and the Danish Conservative Party. This coalition, called V and K, formed a minority government supported by the right-wing Danish People’s Party. The new prime minister was Anders Fogh Rasmussen of Venstre.
V and K had promised to improve the Danish health system, and argued that funding new investments in Danish health would require cutting back on assistance to poor countries. The new target for ODA became 0.8%. Special environmental assistance was reduced by more than half and was later dismantled and integrated into the reduced development assistance fund.
A memo from 2003 compares budgetary estimates from the outgoing government with the new government’s projections. The total Danish development and environmental assistance for 2002 had been planned at DKK 12.5 billion (approximately US$ 2.2 billion), but was cut back to DKK 11 billion. Environmental assistance was to grow from 2002 to 2005 to close on DKK 2 billion annually according to the former government’s plans, but instead was frozen at DKK 500 million annually and subsequently absorbed into development assistance. Development assistance was locked at 0.8%, which was DKK 10.5 billion in 2002.
In 2002 the total savings was approximately DKK 1.5 billion, and the amount rose over the coming years. In 2005 total Danish development assistance was DKK 11.6 billion, whereas overall environmental and development assistance, according to the previous government’s projections, would have been more than DKK 15 billion that year. The annual savings had grown to DKK 4.5 billion.
Early assistance
With the wave of decolonization in the 1940s and 1950s, Danish NGOs and committed politicians saw a potential for a Danish presence beyond Europe. There was political consensus on the importance of development assistance based on:
- Humanitarian considerations that were partly rooted in the tradition of Christian relief work and Christian thinking appealed to many political parties, particularly the centre-right wing.
- The Scandinavian welfare model was seen as a ‘golden mean’ between capitalism and socialism, and hence as a model that would inspire newly independent states. Denmark barely had a colonial past, which eased political cooperation with new nations. Its philosophy of solidarity appealed to many parliament members, particularly the centre-left.
- Danish businesses needed help entering markets in independent new states, and development assistance could open up new markets to trade and industry. This appealed to the business community and its political backers.
- Development assistance could help give Denmark, a small country, greater international gravitas.
Only tax resisters and the extreme left wing were sceptical. They thought there were too many Danish business subsidies built into the assistance policy. For many years assistance operated with firmly fixed return percentages – 50% of assistance was supposed to make its way back to Denmark by being spent on Danish wages or supplies, and for a long time government loans were tied to purchases of Danish goods.
But Danish assistance also had strong idealistic components. One was intense support for multilateral deployments through the UN system. Denmark, like other Scandinavian countries, was politically influenced by its geographical position between east and west during the Cold War. East Germany (DDR) was adjacent to Denmark, and the partition of Europe placed the UN high on the Danish foreign policy agenda. As a result, Denmark concentrated for a long time on ensuring that about 50% of development assistance would be channelled through multilateral organizations. One reason was to consolidate the UN’s role in the world. The large-scale Danish multilateral assistance formed the basis for a policy of ‘active multilateralism’. Denmark attempted to be active both in strategy development and reform processes within the UN system.
Civil society was heavily involved in early Danish assistance. A Danish International Development Assistance (Danida) advisory board was established in the early 1960s with representatives from both the business sector and NGOs. The board continues to deal with all major assistance grants. Danish NGOs engaged in development and relief work were granted sizable state subsidies, and for over ten years more than 15% of the total Danish bilateral assistance was channelled through these NGOs. A large part of the Danish public information work relating to development problems was also undertaken by NGOs, backed by Danida funding. The Danish programme for sending volunteers out to developing countries was run by an NGO, the Danish Association for International Cooperation (MS), with government funding.
With increasing emphasis gradually being placed on partnership and local ownership in the recipient countries – in line with developments in international assistance policy – project assistance was eventually superseded by assistance for selected government sectors in the individual programme countries. It became easier for the recipient countries themselves to plan on the basis of Danish assistance pledges. There were no more tie-ins to purchases of Danish goods.
Almost from the start the focus of assistance was on poverty. The fundamental principle of bilateral assistance was that cooperation would be concentrated on a number of programme countries. But there were political disputes over which would be chosen. Did the poverty focus mean that only the very poorest countries should receive assistance, or were slightly richer countries with massive poverty problems also eligible? In practice, most Danish programme countries were in Africa.
An distinctive feature of Danish aid, however, was its size in relation to the other foreign-policy areas. While defence spending in most countries is far greater than spending on assistance, this was not so in Denmark. In the 1997 Danish Foreign Policy Yearbook Per Fischer, senior advisor at the prime minister’s office, wrote that while Denmark’s total defence spending in 1988 was DKK 14 billion and thus almost double the total international assistance of 8 billion, the 1997 figures were equal for the two areas: DKK 15.5 billion on defence and DKK 15.5 billion on international assistance. According to Fischer, this reflected the new concept of ‘soft security’ and the corresponding more activist line in Danish foreign policy.
At the end of the 1990s Denmark sought to be a pioneering country in international environmental policy. The Danish Ministry of the Environment was expanding and was given more tasks, including international and climate-related activities.
From soft security to tougher and more activist foreign policy
From 2001 onwards development assistance was reduced sharply by Denmark’s new government. A majority was in favour of reinforcing the domestic health system by making large cuts in spending on development and environmental assistance. This meant a clear restructuring of Danish international policy.
Between 2001 and 2004, more changes were implemented to Danish defence, security and foreign policy, including
- The reduction of development and environmental assistance, and the establishment of a new ODA target of 0.8%.
- Denmark’s military contribution in Afghanistan since 2002; Denmark’s alliance with the US and other coalition partners on the invasion of Iraq in 2003; and a number of subsequent, partly derivative decisions, including on ‘The Arab Initiative’, based on a decision that Denmark would play a more active role in dialogue with the Middle East.
- The implementation of a new defence agreement in 2004 and the shift in focus from domestic defence to greater active Danish participation in international military deployments.
In assistance policy terms, the interaction between civil and military deployments became an important new topic after Denmark became involved in military deployments in both Iraq and Afghanistan. The debate was coloured by Denmark’s membership in the United Nations Security Council in 2005.
In pivotal speeches in 2003 about Denmark’s international duties, Prime Minister Anders Fogh Rasmussen clearly said the focus was on security rather than development assistance. In a September 2003 speech on the new world order, Rasmussen did not mention Danish development assistance explicitly, and focused on the fight against terror, democratic development in the Arab countries, international free trade and Danish interaction with the EU and US. Assistance was only mentioned indirectly in a discussion about disease prevention through cleaner water and better sanitation.
In a speech to the Royal Danish Defence College Rasmussen declared that Denmark ‘must increase its capacity to participate in international military operations’ and ‘produce more soldiers for the international operations’. Danish national defence was to ensure greater visibility of Denmark internationally. He also stressed the importance of Denmark improving its record at co-conceptualizing military deployment with development assistance, reconstruction assistance and humanitarian assistance. ‘It is important that the local population should not only see armoured personnel carriers but also perceive an effort to secure necessary supplies and rebuild infrastructure’.
The new 2004 defence agreement made it possible, in principle, to make 2,000 Danish soldiers available for international operations each year. Recruiting shortages, however, made that problematic. Nevertheless, Denmark will probably deploy more military than civilian young people to international operations in the future. The timing of the growth in military despatches coincided with a reduction in the despatch of Danish development workers. This reduction was brought about primarily because Danish volunteers and exchange workers in new partnership strategies for development cooperation were largely replaced by increased local manpower.
Danish grassroots development organizations have criticized the cutbacks and changes in Danish foreign policy. NGOs have been highly critical of the large cutbacks in civil deployment taking their toll on the poverty perspective in Danish development assistance. There has been a sizable reduction in the bilateral assistance to the least developed countries.
Despite the huge cutbacks, civil development assistance was supposed to be instrumental in financing far more topics and areas of deployment. There was far less funding available than before, but it was now also supposed to help finance civil development assistance and relief aid in Iraq and Afghanistan, and finance the Arab Initiative.
The overall retrenchments in assistance also affected Danish NGOs. There were general cutbacks in funding to NGOs, and the government decided that the organizations’ own fundraising had to be raised as a condition for receiving government funds. At the same time, special cutbacks were made in the grants that had been used to provide developing countries with information via the NGOs since the 1960s. While the principle thus far had been that general information about the developing countries and assistance was best provided by independent organizations, the new policy reinforced the Ministry of Foreign Affairs’ own direct information efforts.
Although the protests were extensive, the new government had a stable majority for its changed policy. However, the Conservative People’s Party also made its fundamental policy to once again start increasing development assistance from its reduced level of 0.8% of GNP.
Renewed focus on Africa and climate
From 2005 there were new signals coming from the Danish government about the significance of development assistance to Africa. Rasmussen’s statements after a trip to Tanzania and Mozambique in October 2005 clearly showed that the trip had made a great impression. He has since spoken much more actively and positively about the need for large-scale development assistance, even though he still stresses the importance of free trade as a crucial prerequisite to development. Most recently in 2008, he has established in more ideological terms that assistance needs to get away from the ‘developmental socialism’ of previous eras and move towards assistance that stimulates and supports development of the private sector to a greater extent.
Rasmussen has since spearheaded a number of Africa-related initiatives, including the creation of a Danish-funded Africa Commission with himself as chairman. The commission held its first meeting in 2008, three years after the international Commission for Africa aid initiative, established by the British government, submitted its report in 2005. Although the Danish commission also has international participation, it does not reflect mapping and analysis of African problems as extensively as the British commission. Objectively speaking, it would probably have been more constructive to further develop recommendations from the British 2005 report.
However, the Danish commission does signal that the assistance effort in Africa is again being bolstered, not least with a campaign to increase employment. At the same time, assistance efforts in recent years have received greater funding. Substantial economic growth has meant more assistance funds, even when the target of providing 0.8% of GNP in assistance remains the same. Furthermore, in 2007 the government again decided to go for a slight rise in the share of assistance measured in terms of GNP. In 2009 development assistance is expected to total DKK 15.3 billion, and the target is 0.82% of GNP.
The many new objectives and responsibilities have placed great pressure on the Ministry of Foreign Affairs. Though Danida still has its own advisory board, it is today administratively fully integrated into the rest of the foreign service. All staff is foreign service staff, and Danida is just a brand for official assistances activities.
The structure of the foreign services has been carried chiefly by a North Column, with its more traditional foreign policy and diplomatic activities, and a South Column, which attends to assistance activities in particular. Between 2001 and 2004, foreign ministry staff was cut by about 25% in an effort to make the central administration more efficient. By the same token, the individual embassies have been given enhanced powers as part of the ministry’s delegation.
Along with the staffing cutbacks, the many new assignments in climate, trade, security and assistance have increased pressure on the foreign service. The division into North and South Columns has simultaneously become far less logical than before, as central political themes cut across the North-South divide. In February 2009 it was announced that the organizational structure of the ministry of Foreign Service will be changed to better reflect the new realities.
Danish NGOs fear that development assistance is losing priority. Three organizations publicly approached the ministry at the beginning of 2009 to ensure that there will be adequate resources for development assistance.
The 1997 peer review of Danish development assistance by the Organization for Economic Cooperation and Development (OECD) is generally positive, but notes that Denmark’s highly consensus-based culture engenders flexible pragmatism and ‘may inhibit innovative thinking and risk-taking’. Regarding resourcing problems, it stated that ‘in the coming years, Danida will face a resource constraint: in common with other Danish public administrations, it reduced its administrative costs by 25% between 2001 and 2004. This decreasing trend in administrative resources [which] raises the question of how far Danida can reduce its resources without negatively affecting quality and its ability to adapt to new aid modalities’.
Danish development assistance does not take many risks. This may have to do with limited resources, but it is also a result of the relatively big role official development assistance for many years has played in Danish public policy. The high profile has led to a focus on control and risk avoidance. At a time when the overall international development since the Paris declaration is headed toward more untied budget support and less national flagging, Danish governments have been hesitant. They consider it important to be able to indentify the specific role of Danish taxpayers’ money for development. This may inhibit innovation.
The author would like to thank Nils Boesen and Lars Engberg-Pedersen for their comments on an earlier draft of this article.
Footnotes
- Heldgaard, J. Besparelser på ulandsbistanden [‘Savings on assistance to developing countries’]
- 1 euro = DKK 7.45 (March 2009)
- Heurlin, B., Mouritzen, H. (Eds). (1997) Danish Foreign Policy Yearbook 1997. Danish Institute of International Affairs.
- Prime Minister Anders Fogh Rasmussen’s speech on the Anniversay of Danish Industry Day on 30 September 2003: ‘The New World Order–The Political Challenge’.
- Denmark in the World’. Prime Minister Anders Fogh Rasmussen’s speech to mark the Royal Danish Defence College’s anniversary on Friday, 31 October 2003.
- www.commissionforafrica.org
- OECD Development Assistance Committee. Peer Review Denmark. OECD Journal on Development 2007. 8(4).