Multilateral development cooperation
A significant share of Finland’s development cooperation funding is channelled multilaterally. Finland’s multilateral development cooperation partners are international organisations such as the United Nations, and financial institutions specialising in development, such as the World Bank. Finland also uses these organisations and institutions as common forums for political advocacy among the many actors who are members.
Funds which Finland provides to these organisations and development financial institutions as part of a multilateral approach to aid, become part of their resources and they themselves decide where the money will be used. Finland’s international environmental cooperation and financing of work on climate change are also considered part of multilateral development cooperation.
Finland’s goal in multilateral cooperation is to reduce fragmentation of implementation of development policy and development cooperation, and to ensure that multilateral development cooperation also complements the partner country’s own poverty reduction programme. In addition, Finland considers it important to participate in cooperation and dialogue with the Nordic countries and with other donor countries whose operations are similar to those of Finland.
The UN Agencies are the cornerstone of international development
The Millennium Declaration of the United Nations General Assembly of 2000, to which the UN Member States are politically committed, focuses on reducing the inequalities prevailing in the world, trying to solve the challenging problems of development, and establishing common global development goals.
In developing countries, the UN system is represented by the field operations of different agencies. These operations are divided into three groups:
- funds and programmes,
- operations of specific organisations, and
- the partner organisations.
The great majority of these UN field operations are concerned with questions of development.
The UN operations’ funds and programmes play a significant role in Finland’s development aid, since approximately one-third of Finland’s multilateral development assistance is distributed through these channels.
Many of the UN organisations’ field operations in development are coordinated by the UN Economic and Social Council (ECOSOC), and follow ECOSOC guidelines. In addition, efforts are being made to increase the coordination of development assistance through the Secretary General’s special development group in the United Nations Development Programme (UNDP), as well as through the special coordination process set up at the 2005 World Summit.
This resulted in the One UN model. The One UN seeks to harmonise country level activities so that the various UN actors in the country be overseen by only one country manager, with a single, integrated, programme and budget. Furthermore, at the UN Headquarters level, the models for field operations are also being harmonised and integrated.
Development Finance Institutions (DFIs) are a way to global know-how
Development finance institutions (DFIs), also called development banks, are multilaterally owned institutions that provide financial and technical assistance to developing countries. The basic mission of DFIs is to provide loans to support the reduction of poverty and the promotion of sustainable development, as well as to provide extension services and carry out research.
Participation in the activities of DFIs offers Finland an important opportunity to participate in the development dialogue and to have an effect on international development policy and the directions taken by development financing, and in that way also having an effect on improving conditions in developing countries.
The World Bank is the second most important channel for Finnish Official Development Aid (ODA), after the EU. Of the regional development banks, the African Development Bank and Fund (AfDB), is the most important for Finland. Finland also takes part in decision-making in DFIs, and sits on their boards. While working in DFIs, Finland has access to know-how, research results, and opportunities for collaboration, which can all be beneficial in other development cooperation.