Developing countries are facing an unprecedented economic crisis and Covid-19 is only making things worse. This is likely to impact public finances for years to come, derailing the SDGs and increasing poverty and inequality. But there are solutions; tax for development is one of the most crucial of these, the Nordic Alliance for Tax Justice writes.

An article in Development Today on 26 January, stating that Norway and the United Kingdom are blocking an OECD Development Assistance Committee (DAC) consensus on ODA approval of grants for the Coalition on Epidemic Preparedness Innovations (CEPI)’s research and development support for vaccines against covid-19, is not correct.

Donors committed at least USD 3.3 billion for next year at the Afghanistan Conference in November. Now is the time for pledges to be translated into actual responses to address needs among millions of Afghans trapped in war and deep poverty, writes Charlotte Slente, Secretary General of the Danish Refugee Council.

The Covid-19 crisis has hit emerging economies hard. Many companies have taken a beating. But a strong private sector is also the key to a successful recovery. Robert Wihtol, chair of the Board of Directors of Finnfund and a former director general at the Asian Development Bank, takes stock.

One in four countries is now facing a debt crisis. This calls for an urgent resolution of the sovereign debt crises that are emerging in the wake of COVID19, especially in view of reaching the Sustainable Development Goals (SDGs). The coronavirus crisis has exacerbated existing debt vulnerabilities in developing countries. It is crucial that the global financial architecture be strengthened to ensure fair and equitable solutions to sovereign debt crisis and effective prevention of accumulation of unsustainable debts.

At the World Humanitarian Summit in Istanbul in 2016 donors agreed, as part of a reform package - the so-called Grand Bargain, to channel one-fourth of humanitarian aid directly to local responders. This has not happened. Donors continue to channel emergency aid via their own national NGOs and international actors, even though locals continue to do much of the job and bear the brunt of the risks associated with operating in war zones.   

Plans are underway for an aid-financed mechanism, the Gavi Covax Advance Market Commitment (AMC), that would provide free or subsidised COVID19 vaccine to almost half the world’s population. Discussions about how it will work and how much it might end up costing have taken place largely behind closed doors. For an initiative that could well claim a significant share of a shrinking global ODA pot, necessarily taking funding away from other needs, the lack of transparency is worrying.

It is a common belief in the aid community that women’s employment can help to reduce intimate partner violence. In a unique research project led by Chr. Michelsen Institute, researchers have followed 1,500 women to find out whether this holds water in the Ethiopian context.

The ongoing COVID-19 pandemic calls for immediate action to Build Back Better and Greener. Today, the five Nordic countries - Denmark, Finland, Iceland, Norway and Sweden - launch the recapitalization of the Nordic Development Fund. The fund will make catalytic funding of EUR 350 million available to developing countries to boost climate resilient recovery, green growth and to stimulate job creation at the same time.

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The Norwegian government has proposed a budget for 2021 that would reduce aid spending by NOK 1.1 billion, while keeping the level at 1 per cent of GNI. COVID19 dominates all areas with vaccine initiatives Gavi and CEPI coming out as the biggest winners, while Norfund, development research and several UN agencies face severe cuts.

The Swedish government has presented a budget for 2021 that provides the same amount for aid as this year. The government aims to sharpen demands on rule of law and human rights in Swedish aid. Swedfund is one of the big winners in the budget, receiving SEK 1 billion in new capital.

“Green global ambitions” and efforts to curb migration are prioritised in the proposal for Denmark’s aid budget for 2021. Another clear winner is the Nordic Development Fund. The bigger picture is a proposed cut in aid of almost DKK half a billion next year.

Finland’s government has approved a budget that increases aid in nominal terms next year, despite the COVID19 crisis and a shrinking economy. Finnish NGOs applaud this growth but are preparing for austerity and tougher budget fights in the coming years.

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