A shift in aid for Latin America

    A street in Sullana, a town in Peru. Photo by: Alex Proimos / CC BY

    The economy of Latin America is booming and donors like Finland are seeing it.

    In its newly released development plan, Finland is signalling a shift toward local capacity building across Latin America’s emerging economies. In lower-income countries such as Haiti, meanwhile, aid will continue to flow on a project-by-project basis.

    “Finnish development cooperation is being revised in Latin America,” says Finland’s Latin America and Caribbean Action Plan, released Feb. 13 at the House of Estates but posted on the government’s website on Feb. 18 only. “Currently, the countries in the region, except Haiti, are at the medium income level.”

    Finland’s development program is part of a broader action plan for Latin America and the Caribbean which also includes political and cultural relations, trade and investments, research and education, and public diplomacy.

    The action plan notes: “As modernization progresses in these countries, traditional project-based and program-based development cooperation will gradually be phased out and replaced with capacity building to respond to local needs, reinforcing the countries’ own development potential while supporting human rights and democracy.”

    The plan suggests that Finland will invest more in capacity building and supporting commercial, academic and inter-institutional cooperation. NGOs will remain key partners.

    “International cooperation at the civil society level will continue to be reinforced by supporting the work of Finnish NGOs in countries in the region,” the plan states.

    The European donor also wants to explore increased cooperation in the area of rule of law.

    Finland is tapping various instruments to assist government officials and encourage trade, link Finnish businesses with local partners and fund NGO projects.

    Information exchange will also play a key role in Finland’s plan for Latin America.

    “The cross-cutting goals of Finland’s development policy and development cooperation – gender equality, social equality and climate sustainability – are being promoted in Latin America, and they are taken into account in all Finland’s activities in the region,” the action plan reads.

    This is in line with Finland’s development policy, which was adopted last year. The policy focuses on rights-based approaches to development.

    Finland’s total aid to Latin American nations has increased annually by 19 percent on average, receiving about $39.1 million in 2011. In 2005, Finland’s technical assistance to Latin America was $5.6 million and six years later, it had risen to $16.4 million.

    Between 2005 and 2011, 40 percent of Finland’s aid to Latin America, on average, went toward technical assistance, according to data from the Organization for Economic Cooperation and Development.

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    About the author

    • John Alliage Morales

      As a former Devex staff writer, John Alliage Morales covered the Americas, focusing on the world's top donor hub, Washington, and its aid community. Prior to joining Devex, John worked for a variety of news outlets including GMA, the Philippine TV network, where he conducted interviews, analyzed data, and produced in-depth stories on development and other topics.