Finland’s development aid has not been able to fulfill the goals it was given to help developing countries. The global economic system enables capital flows to escape from poor countries.
Foreign Affairs Counselor and retired ambassador Matti Kääriäinen criticizes the government’s policies regarding development cooperation. He hopes that development cooperation would not be seen as a channel for promoting exports.
– The purpose of development cooperation is to help developing countries and not Finns. However, the government’s program starts with how to help Finland and Finnish companies or how immigration can be limited, for example, through development cooperation.
In 2023, the development cooperation appropriations according to the state budget are 1,117 million euros, of which the share of development cooperation managed by the Ministry of Foreign Affairs is more than half. The government program outlines that, among other things, the government will promote the operational possibilities of Finnish companies and the conditions for applying for funding from the UN, the EU and development finance institutions.
According to Kääriäinen, it would be important for development cooperation teams to focus on supporting the operations, growth and market access of companies in developing countries.
– It is a cornerstone of the development of developing countries that businesses are born there.
Capital is fleeing from developing countries to rich countries
According to Kääriäinen, Finland’s development aid has not been able to fulfill the goals given to it. For the least developed countries, the situation has even worsened, despite the development aid.
Structural changes to the global economic system are required in order to involve developing countries in development on a global level.
Kääriäinen sees the fact that more capital is escaping from developing countries than aid is being given there as a big problem. There are several reasons behind capital flight, such as deliberate distortion of import and export prices, problems related to global taxation, and corruption.
– The problem is that we don’t give development aid to poor countries, but poor countries give development aid to us. It means that capital flows go inside out.
Kääriäinen calls for corporate responsibility.
– It would be very important that companies act responsibly and pay developing countries the taxes that belong there, and not evade them.
You can watch the full 8-minute interview with foreign affairs adviser and retired ambassador Matti Kääriänen in Areena: