Reclassifying Aid

In late September, news surfaced claiming that Swedish former Minister for Foreign Development Cooperation Gunilla Carlsson had received her salary directly from the development aid budget. This stirred up intensive debate, given that that 20m SEK (£1.9m) over four years had gone to Carlsson’s wallet rather than to aid. Although Carlsson’s slightly irregular source of salary may rightfully cause a stir (there is no Swedish precedent of departments paying ministers’ pays), the whole case acts as a rather symbolic example for OECD governments’ attitudes towards aid budgets at large.

The load ready to go!

According to the charts, the Scandinavian countries are exceptional when it comes to development aid.  As one of the few OECD countries who have actually met the 0.7% of Gross National Income goal, Sweden now spends 1% of its GNI on development aid. All is well, one might say. A closer look, however, suggests otherwise. Much of this money never leaves Swedish soil. The Swedish aid budget for 2013 shows that more than 4 billion SEK (£380m) is spent on ‘refugee costs,’ corresponding to 12% of the total budget.

Since the 1990s, it is normal practice for the Swedish government to allocate aid funding to the costs of supporting arriving refugees. The Development Assistance Committee of the OECD defines what donor countries can include as Official Development Aid (ODA). Costs of assistance to refugees in donor countries have also been included in this definition. What is not clearly defined, however, is what these costs can include. Does these costs include the costs of only refugees or asylum-seekers at large? Does it include those who are refused? Ultimately, the donor country is left with the decision. As an implication, the ‘refugee cost’ bracket of the Swedish aid budget has experienced a dramatic increase in the last decade.

Although Sweden is unmatched in classifying refugee costs as aid, similar trends can be identified in other donor countries. So far the UK aid spending on refugee costs amounted to a mere £20m in 2011. However, pushing to reach the 0.7% mark, a liberalisation of the classification of aid can be identified in the UK debate. The Foreign and Commonwealth Office said in 2010 it would seek to reclassify some of its already existing funds to ODA. This goes in tandem with David Cameron’s comments on the possibilities of allocating more aid funds to peacekeeping.

This change in perceptions regarding the use of aid funding comes with a price. This can be identified in three ways.

First of all, this means that less money goes to those who need it. In the Swedish case, an increase of the aid budget to 1% of the GDI has not meant an increase of the amount spent on development aid in real terms. If fulfilling the Millennium Development Goals is at the heart of the donor countries attitudes towards ODA, using funding for the purpose of immigration costs is a horribly inefficient path. Unsurprisingly, the stated aims of OECD countries on development aid are hardly aligned with the sufficient actions. In 2001, the UK decided to untie its aid, thus enabling international competition over its aid-funded contracts. Findings show, however, that the vast majority of contracts by the UK Department for International Development were still given to UK companies.   According to OECD-DAC, aid costs are 25% higher due to tied aid , costs that affect the quality of ODA implementation in favour for donor country companies. The increasing reclassification of aid spending is yet another way in which recipients of ODA appear to be the losers.

A second implication of letting border and migration agencies in on the aid budget is that it plays into the hands of Europe’s host of ‘immigration-critical’ right-wing parties; parties that are already generating significant momentum.

The rhetoric of these right wing parties, such as Sverigedemokraterna in Sweden, often refers to the inefficiency of dedicating funds to the few refugees who have made it to the borders of northern European countries rather than funding emergency aid to the masses of displaced persons closer to conflict-ridden areas. In itself, this argument is barely grounded in reality. First, ‘immigration-critical’ parties generally seek to reduce development aid budgets. Second, the perceived conflict between immigration costs and development aid is rarely materialised. The increasing trend of classifying immigration costs as ODA does, however, serve this exact purpose. It creates a direct trade-off between spending money on actual aid and spending it on the costs of refugees and asylum-seekers. This trade-off only serves to legitimise the ‘immigration-critical’ rhetoric.

Most importantly, however, the reclassification of refugee costs as aid has the potential to externalise the issue of migration. Migration is inherently both a domestic and international issue. It strongly affects the domestic as well as the foreign policy of a country. Increasingly funding the costs of refugees and asylum seekers through the aid budget could result in a dangerous attitude shift. Instead of immigration being perceived as a natural phenomenon deserving a stable position within domestic policy, immigration becomes viewed in terms of aid, philanthropy, and generosity. These attributes create the illusion that migration is something the donor countries of the developed world can simply leave outside the door if needed. Sweden’s, and other countries’, aid policies contribute to this end.

Peacekeeping, embassy costs, refugee costs, and ministers’ salaries. Will the diluting of aid funding cause a push for stricter regulation on what aid can and cannot be? Or will the creative reclassification trend continue? What is evident, however, is that aid does not simply mean aid.

A Swedish language version of this article has been republished by:


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