Q&A: Finland's new focus on digitalization in development

Finland’s development policy has traditionally focused on gender issues, education, and climate. But now, as part of a new policy released last year, the country is also prioritizing digitalization and connectivity. “We are combining the ‘green transition’ with the digital effects,” Ville Skinnari, Finland’s minister for development cooperation and foreign trade, told Devex. The country can differentiate itself as a development actor when it comes to innovation both in the technology sector and with social innovations, he said. Finland views digitalization as a key enabler of some of its educational and other priorities, and it is ramping up investments in the sector through its development finance institution, the Finnish Fund For Industrial Cooperation — better known as Finnfund — Skinnari said. He was recently in Washington, meeting with U.S. officials to explore forthcoming partnerships on issues of digitalization and the green transition, as well as gender-based investments. While Skinnari was in the capital, he sat down with Devex to talk about Finland’s aid priorities, whether it will continue to increase aid spending, and what its focus on digitalization looks like. This conversation has been edited for length and clarity. Finland has committed to spend 0.7% percent of its gross national income on official development assistance but last year spent about 0.47% of GNI. Is the country still planning to meet the 0.7% target? Do you have a road map to get there? It's our commitment, and we are working on it. And of course, as a minister, I'm very proud that I've been able to increase that share [of aid spending, which rose by about 8.1% in 2020 from 2019.] But of course, we see that we have certain instruments we have increased. For instance, Finnfund — it's our national development financing entity. So in other words, we have increased the amount of investments and loans significantly. “We have to digitalize the world. We have to increase the connectivity — physical and digital — because they go hand in hand.” --— Ville Skinnari, Finnish minister for development cooperation and foreign trade We are still a strong player sizewise when it comes to direct bilateral and especially multilateral development aid and cooperation. And we see that the United Nations has become more and more important — maybe more important than ever. We have a very close cooperation [with the U.N.] as far as Finland but also as far as the European Union [are concerned]. And definitely “Team Europe” is something that we need, because Europe has to really act together and the European Union has to deliver now. And therefore, the development ministers in Europe and especially Nordic countries — we are working a lot together now. But will Finland increase the aid budget in 2021 and into the future to meet the 0.7% target? Is it difficult politically to make the argument? There's pretty strong commitment from the political side that, yes, we will continue to be strong and even stronger. But of course, this is a promise that nobody can make. But our strategy is now that we are not thinking of a four-year term. We are thinking long-term. And that's why our government outlined this kind of a long-term development strategy together with the Parliament, because we want to show the commitment to our partners worldwide. You mentioned that you were working closely with the EU. Do you think that the smaller countries in Europe have a sufficient voice in EU development policy, or is it driven by the bigger countries — France and Germany — and their priorities? We have a very good dialogue with Germany, with France. And a country like Finland, with the very strong expertise in innovations — technology innovations but also social innovations like family care, sexual and reproductive health and rights — is something that really completes the offering. One of your key areas of focus is on digitalization and improving connectivity. What does your work look like, and what trends do you see in development policy around those issues? Technologies, innovations, and education are in the very core of Finnish development policy. And why so? Because at the end of the day, we have to understand that we have to build up the whole education system as a system-level approach in order to really penetrate the innovations. So in other words, it's not just having one digital solution in place, but we have to be very holistic with the education system. We are working now very hard in the very forefront in developing countries to enable connectivity to people, to everybody. Our development finance [institution] Finnfund plays a key role in this in investments in digital infrastructure, in solutions — not just in Africa, but also in Asia. So we are talking about rural connectivity, improving access to data, investments in backhaul [telecommunications] infrastructure. In Indonesia, Finnfund has invested in Net1, which brings internet connectivity to rural underserved areas. In Lebanon, we're also in place with a Finnfund investment into a power tech company, IPT, which is to modernize the energy supply infrastructure of its mobile towers, utilizing solar panels, storage, and storage media. We see that in these emerging economies, the lack of reliable power to cellular towers sites is the single biggest obstacle to reliable mobile phone services. Do you believe that this focus on digitalization is in alignment with what the countries you support are prioritizing? It wasn’t listed explicitly as one of the four key priorities in the African Development Bank president’s road map for recovery from the COVID-19 pandemic, for example. We see digitalization as a key part of the infrastructure. It's a matter of understanding holistically how you approach the infrastructure. And I think, of course, it's easy to agree with the African Development Bank on what are the focus areas, but I see that digitalization goes through each and every element he mentioned. We have to digitalize the world. We have to increase the connectivity — physical and digital — because they go hand in hand. It's so important that development policy, development financing, is a vehicle for connectivity and also that it takes everybody on board. The tenders, the country specific programs [must] really attract investments that are sustainable also with their social demands, meaning that the “digital divide” should not happen. How do you factor in some of the safety and data security issues that come with connectivity into your expanding work on the issue? Of course, we are very concerned about the negative side of internet, especially on girls and children. We see a lot of bad things going on and that's why, of course, the regulation is the key. And for Finland and our development policy, we are doing a lot of multilateral and bilateral work in order to improve the regulation and legislation at the country level.