Norwegian aid: What next for one of the world's most generous donors?

Bård Vegar Solhjell hungrily tucked into a belated lunch at a trendy venue in downtown Oslo. The director general of the Norwegian Agency for Development Cooperation, or Norad, spent his morning helping open the agency’s annual conference, where his energetic opening speech at the conference focused on social cooperation. His staff say Solhjell, formerly of the Socialist Left Party and minister of environmental protection under the government of Jens Stoltenberg, is impatient and likes to move fast. He’s also said to have done more to have asserted the independence of Norad from its parent Ministry of Foreign Affairs than predecessors. But on the record with Devex he was a loyal civil servant, batting away criticism made by the conference’s opening speaker, Vanessa Nakate, who criticized the “hypocrisy” of the Norwegian government holding a climate conference while authorizing record fossil fuel drilling in the Arctic. Nakate also criticized Norway’s currently winding down Oil for Development program, which he defended as one of Norad’s most popular programs. So, with its flagship program on the way out, where does that leave Norad? What are the principles driving its development work? Flexible and reliable “First, I will say we are trying to be reliable and flexible,” said Solhjell. Both traits have been widely admired as hallmarks of the Nordic aid model. “We have a strength compared to some other political systems,” Solhjell said. “We don't do big changes when there's a change of government. … We will mostly stand by agreements made by former governments [with] our major partners, NGOs, U.N. agencies.” He said Norad tries to use as little earmarking of funds as possible “even though I would say we have a way to go,” said Solhjell. This is also made possible because of the sociopolitical context in Norway: “An important part of it has just been the quite close relationship that a small country, and country with a lot of trust like Norway, accepts between the public and civil society,” he said. And while funding scrutiny is still important, it is “maybe not as rigid as some of the other countries I hear from,” he added. “There's no functioning democracy without a civil society.” --— Bård Vegar Solhjell, managing director, Norad Norad is also currently working to replace management agreements to “make them even more flexible,” strategic and “not so detailed and specific,” said Solhjell. This would allow organizations to “move resources around” and focus on outputs. Multilateral But when it comes to funding, “the fact is we are very multilateral,” said Solhjell. “We're a small country, and a small agency, and there are different kinds of advantages with multilateralism. Norway's very pro it, but it's also the advantage of channeling our resources with others. So we have become very multilateral,” said Solhjell. But Norwegian aid still has a strong bilateral emphasis, though the “earmarked spending” in the chart below includes non-core support to multilateral organizations. “We still do a lot of it through Norwegian NGOs, which is not open for all NGOs, but we also use international NGOs," said Solhjell. Localized Norad was “quite early” to the localization agenda, said Solhjell. The country has recorded the share of aid it has donated to local organizations, which it defines as civil society organizations based in low- and middle-income countries, since 1999, in which it provided 10.68 billion Norwegian kroner, 2% of total aid, according to statistics provided by Norad. In 2021, the share was NOK 40.148 billion, also 2% of the budget, the highest in cash terms, though the share crept up to 4% in 2012, when NOK 27.638 billion Norwegian kroner was given to local organizations. “Norway is a small country; we just have to use our resources well. And we have a small size advantage, which we can use if we are smart and flexible.” --— Bård Vegar Solhjell “Our job is not to build capacity in the international system or consultancies. It's to build capacity on the ground,” he added. “We're not perfect at all, but we have demands on our partners to actually use local capacity. We're also trying, especially in areas where we are quite big, to directly do agreements with the local partners.” Solhjell said, “one of the things that we consistently care about is to use NGOs, as channels to build capacity on the ground.” He continued: “There's no functioning democracy without a civil society. … That's also why we're thinking in a localized way. Building capacity on the ground is in itself important. It's not just service delivered.” Again, the political context in Norway has helped Norad’s approach to working with local organizations. While NGOs’ staff might still think of Norad as rigid, “when I compare it to the U.K., the U.S. or others, that's what I find. And I think that's the thing with public sector in Norway, which has a trust advantage compared to quite a few other countries,” said Solhjell. Nimble and knowledge-based But when the U. S. Agency for International Development has more staff in Kenya than Norad does in its head office, according to Solhjell, the organization has to think differently about how it approaches localization, particularly about how the multilateral channels it funds approach the issue. Localization is also being discussed “all the time with other donors, formally and informally,” said Solhjell, though they are “coming from some very different places.” Norad is also “trying to be a lot more knowledge-based,” said Solhjell, in its policy advice, implementation, and learning. “The difference between [average programs and] the very best interventions is enormous. So if we can spend our money as much as possible for the proven good interventions, that would really make a difference,” he said. Along with learning from the traditional players, Solhjell also points to emerging donors for inspiration: meetings with Indonesia, Colombia, and South Africa all led to “really, really interesting conversations.” What next? As Solhjell ponders whether he will reapply to lead Norad for a second term — he hasn’t decided yet — he is proud of the work the agency has done since he joined in 2020. Norad was a “quality institution when I arrived, but had just been through a big reform … if you go five years back, we managed quite limited resources, just a fourth of what we do today. And we had more weight on technical advice; that has changed, the minister gave us more autonomy,” said Solhjell. “For me, it has been important to uphold that.” But what about the future? Norway is a small country with a population of 5.5 million people, which Solhjell said has consistently punched above its weight. That has included one of the world’s most generous aid budgets, long tied to 1% of gross national income — making Norway one of only five countries to consistently exceed the 0.7% target set by the United Nations. Norway has “the financial muscle to do a significant amount” and has contributed “significantly” to aid, said Wanjira Mathai, managing director for Africa and global partnerships at the World Resources Institute, who also spoke at the conference. She added: “They're very progressive in their thinking about what's possible. Historically, Norway has been a great ally of the pro-democracy movement in Africa. And so we consider them very deeply steeped and interested in the transformation of Africa.” But as the country’s wealth has dramatically increased amid windfall oil and gas tax revenue, the aid budget has not kept up. This year’s aid budget is NOK 44.18 billion, 0.76% of the country’s projected GNI — though the amount may be changed later in May and December, according to a Norad spokesperson. A separate package for Ukraine, including humanitarian aid, is currently being discussed in Parliament. Solhjell cited global health and forest protections as areas where Norway has “disproportionately played a role” as a development actor. The government has “always been very invested” in forestry, agreed Mathai, citing Norway’s International Climate and Forest Initiative and the Global Forest Watch program, a World Resources Institute initiative. The current government is also looking at working more on the global crises of food and energy, according to Solhjell, “but we can't do that across the board, so we have to prioritize.” He added: “Norway is a small country; we just have to use our resources well. And we have a small size advantage, which we can use if we are smart and flexible. And be pragmatic about how we work, that's what I'm trying to do.”