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5 Facts About Denmark’s Foreign Aid

Denmark's Foreign Aid
When it comes to foreign aid, one of the most widely-commended countries is the small nation of Denmark. The Danes are well-known for their generous aid spending and both donor and recipient nations recognize Denmark as a highly effective partner in the fight against global poverty. Here are five facts about Denmark’s foreign aid.

5 Facts About Denmark’s Foreign Aid

  1. Denmark is a world leader in foreign aid spending. In 2019, Denmark spent $2.55 billion on foreign aid, a seemingly small figure compared to the $34.62 billion the United States spent, but Denmark’s population is only about 1.76% that of the U.S. When adjusted for population, Denmark’s foreign aid totals $447 per-capita, much higher than the United States’ $95 per-capita. In fact, Denmark is the fourth-highest per-capita spender of all OECD countries after Norway, Sweden and Luxembourg.
  2. Denmark has consistently been a world leader since the 1970s. The United Nations uses foreign aid as a percentage of Gross National Income to measure a country’s proportional spending, and Denmark is one of the few countries that has met or exceeded the U.N.’s target of 0.7% of GNI since 1978. Denmark’s foreign aid currently amounts to 0.71% of its GNI, trailing only Luxembourg, Norway and Sweden among OECD countries. However, for a brief period during the 1990s, Denmark actually increased this number to over 1%.
  3. Low-and-middle-income countries rate Denmark high for usefulness, influence and helpfulness in foreign aid. In a new study that AidData conducted, leaders from 40 aid-receiving nations ranked Denmark as a top development partner. Besides meeting the U.N.’s foreign aid target, Denmark scored second among all countries for its usefulness regarding policy advice, second for its influence in setting agendas and first for its helpfulness regarding reform implementation. Since 2009, these reforms have included promoting greater private sector expansion and focusing on social progress as a catalyst for economic growth. Denmark’s long-term commitments to implementing such policies in a small number of prioritized nations have proven to be highly effective in reducing extreme poverty.
  4. Denmark manages its foreign aid spending and implementation through DANIDA, the Danish International Development Agency. DANIDA’s top priorities for 2020 are advancing human rights and equality, developing sustainable green growth, providing humane asylum for displaced people and maintaining international cooperation in all global efforts. Denmark’s foreign aid reaches over 70 low-and-middle-income countries, but those of the highest urgency include Afghanistan, Somalia and Niger. Efforts in Afghanistan largely center around education as Danish aid provides teacher education, updated textbooks and curriculum development. In Somalia, DANIDA works to develop safety nets, human rights advancements and strengthen national and local governance. Niger receives policy advice on properly handling the irregular number of migrants in the country as well as basic delivery of living essentials to impoverished children.
  5. Denmark can still improve. While the country is one of only six to meet the U.N.’s target of 0.7% GNI in 2019 with 0.71%, this is a substantial drop from 2015 when Denmark spent 0.85% of GNI on foreign aid. Addressing this cutback, which was largely due to increased spending on refugees within the country, should be a top concern. Reverting back to 2015’s percentage or higher is a positive step Denmark can take, and such a move is all the more likely now as Denmark’s 2019 net migration was negative for the first time in almost a decade. As the country spends less on internal migrants, more of the Danish budget is available to supplement the once-highly-robust foreign aid sector.

One of the most effective ways developed governments can help to improve conditions in poverty-stricken nations is by properly funding and managing healthy foreign aid budgets. By taking Denmark’s example, more countries should seek to meet the U.N.’s 0.7% GNI target and implement this aid in a manner that best fits the needs of impoverished individuals in low-income countries.

– Calvin Melloh
Photo: Flickr

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Danida: The World-Leading Agency of Denmark’s Foreign Aid

Danida Denmark's Foreign Aid
Denmark is one of the world’s leading providers of foreign aid. Not necessarily by dollars, but by Gross National Income (GNI). The U.N. set a target for 0.7 percent of a well-developed nation’s GNI be set aside for foreign aid. Denmark’s foreign aid meets that goal and its funds are distributed by Danida.

Denmark passed its first law regarding foreign assistance in 1962. Nine years later, the name Danida appeared to distribute Denmark’s foreign aid. Since its inception, it has gained its own logo and place within the Danish Ministry of Foreign Affairs.

Denmark’s Foreign Aid Through Danida

Denmark is one of the few nations that consistently meets and exceeds the U.N.’s goal. In 2015, Denmark allocated 0.85 percent of its GNI toward international development. Only six other nations met or exceeded the goal that year. Since 1978, Denmark has allocated at least 0.7 percent of its GNI toward Danida. This year will be no different. 

Danida operates in countries from Belarus to South Africa and from China to Chile. In recent years, Danida has centered its focus on Africa through various programs. Danida also supports non-governmental organizations already working in these countries. Like other nations, Danida also provides research grants to organizations and individuals through its Danish Development Center. In 2018, Danida will focus Denmark’s foreign aid to four main areas:

  1. Streamlining development cooperation projects and humanitarian aid projects in countries with conflict
  2. Focusing on immigration and the proper readmission of migrants not legally able to stay in Denmark
  3. Increasing employment of migrants and people in countries where there are Danish businesses
  4. Educating young people and providing more funding to women’s health and rights 

The Goal: Eradicating Poverty

Danida’s goal is to eradicate poverty in order to stabilize societies and governments. To achieve its goal, Danida funds programs that encourage the following:

  • Social and economic development
  • Human rights
  • Democratization
  • Security and counterterrorism
  • Humanitarian assistance including disaster relief
  • Environmental protection
  • Eliminate HIV/AIDS

Spending Foreign Aid Domestically

In 2016, Denmark began to roll-out a new strategy. According to the CPH Post, 30 percent of the money from Denmark’s foreign aid allocated to combat the refugee crisis abroad will be used to help migrants who have already reached Denmark. This system received mixed reviews. It was praised due to the benefits it would provide migrants in Denmark, including food vouchers, housing and healthcare.

However, critics say that by using this funding at home there is less money to help stabilize the nations the refugees are fleeing. There would be no need to spend this money domestically if these nations were stabilized in the first place.

Denmark is following the lead of other Scandinavian countries such as Sweden and Norway, who also spend 20 to 30 percent of the same allocated funds domestically. Both Sweden and Norway also consistently spend 0.7 percent or more of their GNI on foreign aid.

The 2018 budget outlines foreign aid plans and funding for Danida through 2021, staying at 0.7 percent of its GNI. The plan also hints that Denmark wants to keep this going until 2030. Hopefully, Danida will continue to operate well into the future and well past 2030.

– Nick DeMarco
Photo: Flickr