Denmark

Total aid in 2011: €2,143m

About Denmark's aid commitments:

*Changes in 2011 *

In 2011, Danish ODA fell by 2,4% to 0,86% of GNI. This was expected as ODA in 2010 rose due to front loading that is sometimes the result of the Danish accounting guidelines, despite government promises to keep it frozen. So a realignment of ODA was not surprising. The new Social Democrat government has promised to unfreeze and increase ODA until it reaches 1%, though no timetable for this goal has been given. It is still extremely problematic that such a large proportion of ODA continues to be used for housing and receiving refugees. Although Denmark is keeping its promises on fast start finance, it continues to count it towards its ODA targets and so the expected increase will further inflate Danish ODA. Denmark also continues to tie DKK 550 million in mixed credits and technical support to Danish businesses in 2011 while security priorities grow in prominence in the Danish foreign policy and development debate.

Aid Quantity

ODA fell from € 2.168 million. to € 2.144 million in 2011. Even with this decrease Denmark kept its ODA above the 0.7% target reaching 0.86% GNI. However after discounting the inflated aid components Denmark reached only 0.79% of genuine aid.

System

Denmark has a Development Cooperation Minister who works out of the MFA, which fully administers development cooperation. Some Danish ODA is implemented through civil and military operations, and these funds are managed by e.g. the military. The MFA are generally credited with having a relatively high poverty eradication focus. The implementing agency is DANIDA which celebrated in March 2012 its 50th birthday.

Countries and sectors

In 2011, the main recipients (in terms of commitments) were Tanzania, Afghanistan, Kenya , Somalia and Uganda. Mozambique and Ghana are also major receivers, but are not registered for disbursements in 2011, though payment will continue in 2012 onwards. Information of sectoral focus of aid is as yet not available. Denmark has also pledged to double annual aid to Somalia, mainly for security reasons.

Challenges in 2012 and beyond

It seems that the government’s goal of increasing ODA to 1% is substantially based on inflation of aid instead of genuine increases in effective, poverty focused aid. Expenditure for security, climate, refugees and tied aid to business are a large part of the Danish aid budget and risk undermining global support and legitimacy when and if Denmark finally reaches 1%. As a global leader of development, this will also open the door for other less ambitious donors to follow in Denmark’s tracks and include as much different expenditure under the aid umbrella as possible in the hope of not suffering political embarrassment in 2015.

Recommendations

 Refrain from allowing the budget line for receiving refugees to inflate aid further.

 Work against the use of development aid for Danish security interests.

 Ensure additionality of climate finance.

 Continue to work for EU member states to live up to their aid commitments.

 Improve the poverty focus of development aid by increasing the size of the Poverty Framework relative to the Global Framework.