Questions to Sweden from the House of Commons International Development Committee - Definition and Administration of ODA Inquiry

The Swedish Ministry for Foreign Affairs welcomes the opportunity provided by the House of Commons International Development Committee to present information on Swedish ODA administration.

The issue of ODA administration is of great importance, as it contributes to the effectiveness of the international development co-operation. ODA remains equally if not more relevant in the new development landscape, and its strategic use will be crucial in order to deliver on the 2030 Agenda. This will be specifically important for the implementation in the least developed countries and in situations of fragility and conflict. It is also clear that financial resources beyond ODA will be required in order to reach the sustainable development goals. ODA is a scarce resource and should be provided where it is most needed.  Its integrity should be guarded as to ensure both quality and sufficient quantities of official development assistance. Safeguarding the internationally agreed definition and respecting the criteria for ODA contributes to the quality of ODA and the achievement of development results, which is expected by the general public.

While guarding the integrity and improving the quality of ODA, it should be used catalytically to leverage additional financial flows. An effective response to the 2030 Agenda requires new methods, innovation and broad-based partnerships across actors and sectors. A combination of a firm commitment to ODA and innovative instruments and financing modalities, such as challenge funds and guarantees, is key to ensure an effective contribution of international development co-operation to the 2030 Agenda.

1. What percentage of ODA is administered directly through Sida? What percentage is administered through other departments/ mechanisms? Is there coordination between departments and, if so, who oversees this?

The Swedish government authority for development cooperation, Sida, manages approximately half of the Swedish aid budget and is responsible for implementing cooperation strategies, decided by the Government. Sida is subject to the Swedish Ministry for Foreign Affairs (see attachment on further information about the Swedish management model). In addition, a large part of the development aid budget is managed directly by the MFA (mainly grants to multilateral development banks and core support to UN system organizations and other multilateral organizations). See table below:

2. Who has ultimate responsibility for ensuring that Swedish aid is DAC compliant? Is there a Minister responsible for aid and do they sit at Cabinet level?

The ultimate responsibility lies with the Cabinet, with the Cabinet Minister for International Development Cooperation and Climate Isabella Lövin as the responsible Minister.

The government has tasked Sida in its ordinance (“instruction”) that the agency should coordinate and report on statistics on the Swedish ODA to the government offices as well as to OECD-DAC, in accordance with DAC directives.

3. Could you tell us more about the Letter of Appropriation?

The central government budget is a long process that begins more than a year before the start of the fiscal year concerned. The process begins in December when the Ministry of Finance presents forecasts for economic development to the Government. Discussions within the Government on the orientation of the central government budget are held in March. The overall focus for the coming years is set out in the Spring Fiscal Policy Bill, which is presented to the the Swedish parliament (Riksdag) in April. Work continues in the ministries throughout the spring and summer, and the Government submits proposals for the central government budget for the coming year – the Budget Bill – to the Riksdag in September.

While the Riksdag is considering the Budget Bill, the ministries produce appropriation directions (“letters of appropriation”) for the government agencies. The Government adopts the appropriation directions for the government agencies before the end of the calendar year. Each ministry is responsible for a number of government agencies tasked with applying the laws and carrying out the activities decided on by the Riksdag and the Government.

Every year the Government issues appropriation directions for the government agencies. The practical work of producing appropriation directions and ordinances is done in the Government Offices. The appropriations directions set out, among other things, the goals an agency is to reach in its operations, how much money the authority has at its disposal and how the money is to be distributed between its different activities. The ordinances contain various general administrative provisions concerning how the agencies are to carry out their work.

The Government therefore has substantial scope for directing the activities of government agencies, but it has no powers to interfere with how an agency applies the law or decides in a specific case. The government agencies take these decisions independently and report to the ministries. In many other countries, a minister has the power to intervene directly in an agency's day-to-day operations. This possibility does not exist in Sweden, as 'ministerial rule' is prohibited.

Public sector resources must by law be utilised in an optimal manner and used where they are most needed. Agencies' activities and results must therefore be followed up and evaluated. Every year agencies submit an annual report to the Government containing information about, inter alia, expenses, revenue and results. On the basis of the reports the Government can follow up and evaluate agencies' operations. The annual reports together with budget data submitted by agencies are also the basis for work on next year's national budget and appropriation directions.

4. Have there been any significant changes to how ODA is administered in Sweden over the last 5 years? 

There have been no significant changes in recent years to how ODA is administered in Sweden. All Swedish development cooperation is governed by the following principles:

-          There is a broad parliamentary support for the 1% of GNI-target for Sweden’s ODA, a principle that has guided our development assistance for decades. However, due to the introduction of a new EU standard for calculating GNI, Sweden’s development aid budget fell below the 1 % target for three consecutive years (2015-2017). In the budget bill for 2018, as passed by parliament in December 2017, Sweden once again reaches the 1 % of GNI-target.

-          Already in 2003 the Swedish parliament decided on a Policy for Global Development (PGD), a whole-of-government approach to global development. This describes how all policy areas should contribute to equitable and sustainable global development.

-          In December 2016 the Swedish Government presented a new Policy Framework for Swedish development cooperation and humanitarian assistance to Parliament (see attachment and link to Government web site[1]). In this Communication the Government outlines the direction of Swedish development cooperation and humanitarian assistance. It aims at better addressing global challenges and strengthening the principles of effective development cooperation. The goal of the Government was to develop a knowledge-based, broad-based framework stemming from the new global development agenda as well as the situation in the world. The Framework highlights the overall objective to create prerequisites for better living conditions for people living in poverty and under oppression, with a clear perspective that people themselves are agents of change who can influence their own development.

-          Sweden has a multidimensional view of poverty. This means that poverty encompasses not only a shortage of material assets but also a lack of power and influence over one’s own situation, choices, safety and over respect for human rights. Sweden’s development cooperation is characterised by the perspective of poor people on development and a rights-based perspective. The government has included three thematic perspectives in the aid policy framework: 1) Conflict perspective, 2) Gender perspective, and 3) Environmental and climate perspective.

-          Priorities and objectives for Sweden’s development cooperation with individual countries and organizations as well as for certain thematic areas are described in multi-year strategies, decided by the government.

-          According to the fundamental principles of Swedish aid, it is the responsibility of each recipient country to adopt its own strategy for economic development and the eradication of poverty. These national strategies form the basis for Sweden’s development cooperation strategy.

-          Swedish development cooperation rests on internationally agreed principles of effective development cooperation. All development cooperation is to contribute towards results that benefit people living in poverty and under oppression. The changes that take place are often the result of complex processes that may take time. The impact of Swedish development cooperation should be seen in a broad and long-term perspective.