Denmark changes approach for development cooperation

The Danish Government is shifting its modalities for the part of the development cooperation that is carried out by NGOs. The priorities will be closer linked to political goals.

By Jacob Rosdahl, LO/FTF Council

From the 2018 fiscal year onwards, the modalities of a big chunk of government-funded aid and development cooperation carried out by Danish civil society organisations and NGOs are going to change from a framework-based system to one that is strategically aligned with current political objectives.

The funds administered by the NGOs amount to around 135 million euros a year. The changes will affect the number of development cooperation NGOs eligible for 4-year government funding agreements and the criteria for development cooperation programmes and projects will change. Another major change will be the introduction of a public procurement process for the allocation of the funding. In future, organisations will compete for government funds.

The new modalities reflect the government’s desire to turn the incumbent 4-year Framework Agreements into Strategic Partnership Agreements (SPAs). Until now, NGOs have been allowed to establish somewhat individual and independent long-term development approaches. The current transition to SPAs implies that the development approaches and programmes for each NGO will be more narrowly aligned with the priorities of the Danish Government.

Challenges long-term based approach

Mads Bugge Madsen, Director of LO/FTF Council, the Danish Trade Union Movement’s development cooperation organisation, says that the change of modalities could be the end of the long-term based approach to development cooperation :

“The NGOs will have to apply for funds every four years, which means that the organisations who are best at pursuing the government’s development strategies and priorities will gain. This challenges long term development approaches, but also the very idea of civil society,” he says.

Currently, there are 17 Framework Agreement NGOs funded by the Danish State Budget. Amongt these is the LO/FTF Council. Others are Red Cross, CARE, Save the Children, Oxfam, ActionAid, DanChurchAid, Danish Refugee Council, etc.

Focus on Danish interests

The intentions of Denmark’s right-wing government in pursuing this change are seen as double. On the one hand it aims to reduce the number of SPAs in comparison with the former Framework Agreements. On the other, it aims to align the funding with the recently approved development cooperation strategy and priorities for Denmark in order to be able to rapidly adjust to global crises and issues, e.g. on migration and refugees.

The four new over-arching priorities are : poverty reduction, Danish national security interests, Danish business interests, and migration. Simultaneously, there is a decrease in the number of poor countries eligible for Danish aid and an increased focus on transition economies and emerging markets.

“This shows a greater interest in economic growth and employment. But at the same time a decreased focus on poverty reduction, even though it says so. The key words are Danish interests. Overall, the priorities address economic growth and employment in the formal economy, but leave a lot to be desired when it comes to the informal economy. What also worries me is, if a narrow and vague definition of economic growth and employment will have the entire public sector left out,” says Mads Bugge Madsen.

Modalities for labour market issues

The new system comprises three modalities : One is the modality of public procurement of development aid administered by NGOs, another is an expected modality for minor CSOs, and the third is a modality designed for employment, economic growth and labour market issues. The latter will be the most appropriate for the LO/FTF Council and other labour market actors to seek funding from.

The entire design and procurement process of the change in modalities are still vague, and communication from the Ministry of Foreign Affairs has been scarce. However, it is likely that the entire application process will be finalised around June, as this is the deadline for the 2018 Finance Bill proposal.