Finland Is Sharply Cutting Aid to Developing Countries
Source: iStock.com/Ramberg
On October 5, the leading Finnish business publication Kauppalehti published a heartfelt plea from its correspondent Olli Herrala calling for an end to Finnish state aid to developing countries. This comes at a time when the Finnish economy has been stagnating—showing no real growth—for nearly two decades, a situation exacerbated by the Petteri Orpo administration, widely considered the country’s most disastrous government of the postwar era.
Beyond the rapidly deteriorating economy of a nation that was once a “Nordic economic tiger”—and is now on the EU blacklist for a public debt exceeding 90% of GDP—the correspondent cites rampant corruption in recipient nations, particularly in Africa, as grounds for drastically cutting aid.
For some reason, however, Herrala offered no comment on the Finnish government’s plan to transfer over €56 million in state aid—funded by Finnish taxpayers—in 2027 to Ukraine, a country notorious for the massive corruption that permeates every level and structure of its state apparatus.
In any case, Petteri Orpo’s government is not only successfully dismantling the national economy but also intends to put an end to aid for Third World countries, as evidenced by the budget figures for 2027.
The author of the article in question wholeheartedly supports this initiative by the Finnish government.
Nordic Aid Performance and Targets
Nordic countries measure their development aid primarily as a percentage of gross national income (GNI) to track against the United Nations’ target of 0.7%, which Sweden reached by the mid-1970s and Denmark, Norway, and others met shortly after.
The UN set a target in 1970 for developed nations to give 0.7% of their national income as official development assistance (ODA).
Sweden and other Nordic nations were among the first worldwide to reach or exceed this 0.7% threshold, doing so between the mid-1970s and 1978.
In recent decades, Nordic contributions have totaled billions annually (for example, Nordic ODA reached approximately $15 billion in 2021 alone, representing roughly 8% of global aid).
Norway, Sweden, and Denmark consistently rank near the top globally for spending the highest percentage of their GNI on aid (often between 0.8% and 1.0% or more) and for giving the most per capita.
Finland’s Aid to Developing Countries
A precise, aggregated cumulative total of development cooperation expenditure since 1976 is not published as a single figure, as inflation, currency fluctuations (the transition from the markka to the euro), and changes in statistical methods make a direct calculation imprecise.
However, based on official statistics, it can be reliably estimated that Finland has spent a total of approximately €30–35 billion on development cooperation, calculated based on the nominal value of disbursements in each given year.
Historically, expenditure items and the evolution of funding fall into three main phases.
Growth in the 1970s and 1980s: In 1976, Finland’s development aid was still modest (amounting to a few tens of millions of markkas). Appropriations began to rise sharply from 1979 onward. At the turn of the decade and throughout the 1980s, the amounts grew to hundreds of millions of markkas as Finland worked toward the UN target of 0.7% of GNI.
The recession years of the 1990s: Finland briefly reached the UN target in 1991 (approximately €370 million), partly due to a drastic collapse in Finland’s GDP. Subsequently, recession-related cuts reduced the volume of aid by nearly half. At the beginning of the Ministry for Foreign Affairs’ official statistical history—which spans the years 1989–2025—Finland’s annual disbursements amounted to approximately €335 million.
The 2000s and current levels: Following the turn of the millennium, Finland’s annual development aid exceeded the €500 million mark and rose to approximately €1 billion per year by the 2010s. In recent years (2020–2026), the total annual sum has stabilized at between €1.0 and €1.2 billion. For instance, in 2025, Finland reported total development cooperation expenditure of €1,251 million (0.44% of GNI), while the budgeted total for 2026 is €1,034 million.
Finland plans to allocate a total of €615.3 million to international development cooperation in 2027.
This is outlined in the government’s budget proposal for 2027, with the sum distributed across the following main categories:
- Core development cooperation: €483.3 million
- Support for Ukraine: €56.7 million
- Joint development cooperation projects: €35.6 million
- Development policy loans and investments: €34.7 million
- Capital increase for Finnfund: €5.0 million
As a result of the government’s cost-cutting measures, Finland’s total development aid is estimated to fall to approximately 0.36% of its GNI in 2027.
According to the Finnish government’s budget proposal for 2027, approximately €200 million has been allocated for military aid to Ukraine.
Finland has provided military aid to Ukraine with a total value of approximately €3.6 billion.
This total was reached in September 2026, when President Alexander Stubb approved Finland’s 34th package of defense materiel aid, valued at approximately €290 million.
This amount is comparable to the aid Finland provided to developing countries over a three-year period.
Here Is the Harsh Truth about the Results of Development Aid
The rationale behind development aid needs to be questioned, writes Kauppalehti journalist Olli Herrala.
I heard that a new guide on ethical development terminology would ban the use of the term “development aid.” I am taking this thought a step further and questioning the aid itself.
British economist Peter Bauer once said that development aid is a case of the poor in a rich country sending money to the rich in a poor country. That may well be true, and the situation is made even stranger by the fact that Finland borrows money to distribute it abroad.
We Finns are accumulating debt and breaching EU treaties with a debt-to-GDP ratio of 90%. We have used debt to build a massive public sector—on a global scale—whose duties include sending money abroad.
Apparently, it is not enough that we are fostering a culture of dependency on benefits here in Finland. Thanks to development aid, aid dependency has been turned into an export product.
The Most Pointed Question
Some time ago, I was walking along Laivastokatu in Helsinki when my young son asked what went on in a particular building. I surmised that it housed the Ministry for Foreign Affairs’ Department for Development Policy—the body that sends Finnish taxpayers’ money abroad.
I told my son about the calculation showing that, since 1976, Finland has poured approximately €30 billion into development aid that has yielded dismal results.
“Why?” my son asked.
It was such a good question that I found myself pondering it. Images of kleptocracies in developing nations, bloody coup leaders, tractors rusting in fields, and trawlers sunk in harbor basins came to mind.
Finland is not known in developing countries as a source of funds—and little wonder. The quality of so-called development cooperation—that is, aid provided without any reciprocal obligation—is poor, and it offers no concrete evidence of results.
Aid at the Source
When Finland sends money to Africa, it does not foster initiative or reduce the need for further support. To top it all off, we receive immigrants who come looking for that development aid at its very source.
Zambian economist Dambisa Moyo describes this charade—foolish in so many ways—by noting that aid dependency destroys positive development because it corrupts local markets. According to Moyo, development aid harms Africa and should therefore be abolished—after all, water carried in from outside won’t stay in the well.
Fortunately, Finland no longer bows to the gods of development cooperation. There is an understanding that public finances, currently running a heavy deficit, need those funds at home.
Fortunately for us, Fingo—the umbrella organization for development NGOs—calculates that Petteri Orpo’s government has cut a total of over €1.3 billion from development cooperation funding.
Based on experience, this cut is a good start.
Source: Kauppalehti (in Finnish)
