Development Sweden #18. MFA proposal provides millions to SD
A newsletter on Swedish development cooperation and policy
Welcome to Development Sweden #18. In this issue we deliver insight in the Swedish governments new guidelines for PAO aid to parties, a discussion on how to reconcile aid and business and a new initiative on climate aid. We give free subscribers the article on climate aid and two articles on PAO aid to parties. If you would like to read the full newsletter you are most welcome to upgrade to a paid subscription. Thank you for joining Development Sweden and supporting our work so that we can continue to deliver insight in Swedish development cooperation and policy.
David Isaksson
Editor in Chief, Global Bar Magazine
Monika Gutestam Hustus
Editor, Development Sweden
What do you think we should write more about? Please give us feedback and suggestions.
Write to:
david@globalreporting.net
mgutestam@aol.com
The following are our headlines:
Sweden: New Focus on Climate Aid
MFA Proposal Provides Millions to Right Wing Populist Party
PAO Aid: ”MFA’s Proposal a Complete Surprise”
Aid: How the Committee on Foreign Affairs moved the motion
Aid and Business – Solving the Issues!
Aid: We Effect Focuses on the Business Sector
Sweden: New focus on climate aid
Sweden, Nordic countries, and the USA will present a new climate aid initiative. The details will be made public in connection with COP28, which begins on 30 November 2023.
Sweden is part of a new partnership to mobilise private capital for climate financing in developing countries. This is stated in Denmark’s new climate programme.
The programme states that the Nordic countries and the US will work to finance the green energy transition, increase access to green energy, and create financing solutions to address climate change.
In an email to Global Bar Magazine, the Swedish Ministry of Foreign Affairs (UD) writes that Sweden is preparing the new cooperation through Sida and that negotiations are ongoing.
The MFA does not want to answer any details about the amount allocated to the initiative or what other effects it may have on aid. They refer to the fact that the proposal will be presented at the climate summit COP28, which begins on 30 November.
Climate in focus for the World Bank
The World Bank will also invest more in the climate, and protecting critical natural resources is now one of the bank’s most prioritised tasks. This was stated at the World Bank’s annual meeting with the IMF, which this year took place in Marrakech, Morocco, from 9 to 15 October 2023.
MFA Proposal Provides Millions to Right wing populist party
The government’s proposal for guidelines for the so-called PAO aid to parties means that large sums would automatically go to the Sweden Democrats right wing populist party (SD), while quality and capacity would take a back seat. In response, Sida (Swedish International Development Cooperation Agency) is now strongly criticising the government’s proposal, which they believe hinders Sida’s exercise of authority.
Support for party-related organisations (often called PAO support) goes to foundations affiliated with various political parties. This support became more significant during Sweden’s efforts in the Baltic countries in the 1990s and has changed over the years. At times, the support has been linked to the number of parliamentary members each party has, while at other times, it has been tied to the quality of the applications from respective foundations.
The annual support amounts to nearly 100 million Swedish kronor. The most prominent and well-known beneficiaries have been the Social Democrats' Palme Center and the Liberals’ SILC. Controversies have often surrounded this support, with the most recent involving the Left Party's International Forum (Vänsterpartiet), where it was revealed that parties receiving support were involved in Hamas attacks against Israeli civilians.
Need to apply for funds
According to the current strategy in effect until 2027, party-related organisations need to apply for funds according to the instructions set by Sida. The strategy states that ”programs can preferably be implemented with other Swedish PAOs or in collaboration with organisations in other countries engaged in support for party systems.”
When the previous strategy was adopted, Global Bar Magazine interviewed the then State Secretary Janine Alm Ericson, and they asked, among other things:
Will the Sweden Democrats receive funds under the new system?
SD’s organisation can apply for this support, like those affiliated with the other parliamentary parties. A fundamental principle in the strategy is a requirement that the partner organisations collaborating with PAO should have statutes, party programs, policies, and activities that align with the goals and purposes of the strategy, which are to contribute to democratic development, increased respect for human rights, and equal opportunities for all. If SD’s party-affiliated organisation meets these criteria and can present activities worthy of support, I leave it to Sida to decide.
The Sweden Democrats conduct their international work through the Hepatica Foundation. The foundation is currently not affiliated with PAO aid because it has not met the requirements specified in the latest strategy. Therefore, the party also does not receive any funds from Sida, something that could now change significantly.
Sida criticises the Ministry of Foreign Affairs’ proposal
Global Bar Magazine has reviewed the correspondence between Sida and the Ministry of Foreign Affairs. In the new proposal that the government has put forward and on which Sida has provided comments, it is stated, among other things, that basic support should be distributed in a manner that reflects the parliamentary mandates of the parties (here, the government uses the term 'parties' and not party-related organisations) that submit a work plan and budget to Sida. A similar model was in place until 2018.
This would mean, among other things, that the Sweden Democrats, based on their parliamentary mandates, would automatically receive very substantial support as long as the party assists in "the development of a well-functioning party system in developing countries, to promote a representative democratic system in these countries."
In its response, Sida writes that the proposed strategy will make it difficult for the agency to make decisions based on capacity and relevance and that the proposal risks leading to a situation where the parties automatically receive their funds based on mandates, regardless of the content of their activities. Sida also emphasises that it will not be possible for Sida to demand the return of funds that have been used incorrectly. Sida writes:
"The distribution of funds provided in the strategy leaves little room for Sida, as an expert authority, to make decisions on the distribution of funds based on assessments of the partners' capacity and the relevance of their efforts."
Further down, the agency continues:
”It is unclear whether Sida can reject an application because the work plan and budget, in Sida's assessment, do not align with the strategy, and it is unclear whether Sida can, in follow-up, make the assessment that the strategy has not been followed, and thus demand the return of the funds. Sida operates on the assumption that we have the right to make such decisions and to ensure this, it needs to be clarified in the strategy to avoid any misunderstanding where PAOs believe they have an automatic right to the funds (i.e., appeal against negative decisions or decisions on return).”
Money from other budget items?
Sida also notes in its response that the wording ”EU’s neighbouring area” means that aid can go to countries not defined as recipients. Therefore, Sida asks the Ministry of Foreign Affairs if, in that case, this money should come from budget items other than the aid budget. Otherwise, there is a risk that support to organisations:
”In the vaguely defined ’EU’s neighbouring area’ may result in unclear audits and OECD-DAC reviews for Sida.”
At the same time, Sida highlights that the proposal for a new strategy contains a level of detailed management incompatible with Swedish administrative traditions. Sida writes:
”In the current draft, there is a risk of dual control and making our management of efforts and strategy implementation inefficient. The clearest example is the ’Reporting and Accounting Requirements section,’ which should be removed entirely as it contains elements that are part of Sida’s normal effort management and agreements with partners.”
The government also proposes in its draft that aid can be provided to individuals and ”informal movements”, which Sida strongly warns against as it is not possible according to current guidelines and regulations. Sida writes:
”The strategy has contradictory wording about whether support should be given to informal or organised movements. According to the current management, Sida does not have the ability to support informal movements. If the government wants Sida to support informal movements, the management needs to be changed, and the strategy needs to make it clear that the government is willing to accept the risks that such a decision entails.”
PAO Aid: ”MFA’s Proposal a Complete Surprise”
The Ministry for Foreign Affairs (UD) has proposed a significant change to the so-called PAO aid, which is channelled through the political parties’ foundations. However, none of the organisations concerned have been given the opportunity to view or comment on the proposal.
”Your article was a complete surprise to us. We have not been involved in any way,” says Catherine Isaksson of the Center Party’s International Foundation (CIS).
On October 26, Global Bar Magazine revealed that the Ministry for Foreign Affairs is proposing changes to the so-called PAO aid, which means it will be distributed in a way that reflects the parliamentary mandates. In practice, the proposal would result in many millions going directly to the Sweden Democrats right wing populist party (SD) and the Moderates, the two parties that, in relation to their size, have performed the worst in presenting projects that align with the established guidelines.
Sida’s response to UD’s proposal
Sida writes in its response to UD that the proposed strategy would make it difficult for the agency to make decisions based on capacity and relevance and that the proposal risks leading to a situation where the parties automatically receive their funds based on mandates, regardless of the content of their activities.
Sida also notes that the proposed new strategy contains a level of detailed management that is not in line with Swedish administrative tradition.
No Opportunity to Comment
It has now emerged that the organisations concerned have not received any information about the proposed extensive changes or been given the opportunity to provide comments. This differs significantly from the process before the current strategy was adopted, according to several party-related foundations contacted by Global Bar Magazine.
”We knew that the new government wanted to review this, but the fact that it was ongoing and that there was already a proposal was a complete surprise. We have neither been invited nor informed to participate in the process for a new support design,” says Catherine Isaksson of the Center Party’s International Foundation (CIS).
She is also concerned about how the proposed changes may affect the quality of the activities.
”We work in cross-party collaborations with high quality and standards, which are crucial for the results we have achieved. PAO support today is in line with Swedish aid in general,” she continues.
Michaela Hollis is the Secretary-General of the Christian Democratic International Center (KIC):
”From KIC’s perspective, we have preferred that PAO support be distributed based on capacity and relevance. If a portion of the support is to be distributed based on mandates, we assume that this distribution also requires relevant activities and good results,” she writes in a comment to Global Bar Magazine.
Anna Sundström is the Secretary-General of the Palme Center. She, too, strongly reacts to the process thus far:
”It is more than remarkable that this has been prepared in the Government Offices without any dialogue with us PAO organisations. The government has shown no interest in listening to our experiences or opinions.”
Green Forum has also not received any information about the process.
”We have not been involved in the process, unlike previous governments, which have had continuous dialogues with us and Sida. We have also not seen any drafts, so we know no more than what I read in this article. Our funding expires at the end of the year, so you can understand the situation we are in together with our partners,” says Therese Näsman, Secretary-General of Green Forum.
In a response (see further below), UD writes that a consultation meeting was held on the PAO strategy on August 8. However, this is not correct. It is true that a meeting took place, but the meeting concerned the reform agenda in general, not the PAO work:
”We were invited to a meeting with State Secretary Diana Janse on August 8, which was supposed to be about the PAO strategy. However, Janse did not show up, and another person briefly updated us on the reform agenda and informed us that they had no information about the PAO strategy,” says Therese Näsman.
Nike Dahlskog of the Left Party’s International Forum (VIF) is also critical of the process:
”It seems problematic that UD appears to have put forward a proposal for a strategy that goes against the governance in place at Sida today and has unclear wording about which countries aid should go to and whether they intend to deviate from OECD-DAC or not,” she says.
100 Million Annually
Currently, around 100 million Swedish kronor are allocated annually, or 0.04 per cent of all aid, to support and strengthen the capacity of political parties. The question is whether this type of aid is genuinely needed in the future. Michaela Hollis of KIC thinks so:
”We naturally believe that party-related aid plays an important role in democratic development in the countries where we are active,” she says, and is supported by Anna Sundström of the Palme Center:
”Democratic parties are absolutely crucial for democratic development and therefore constitute a very important part of Swedish democracy aid.”
Therese Näsman of Green Forum points out that a significant part of the activities occur in cross-party collaboration, where several parties work together to strengthen democracy. Examples of countries and regions where this has happened include Guatemala and the overall program for young politicians in Africa.
She also sees the proposal as a commission from the Moderates and Sweden Democrats:
”It is difficult not to connect that these two organisations have not benefited from competition and now want to ’get money’ based on mandates. With a mandate-based distribution, the setup presented in the article risks taking us back to a less efficient and more arbitrary democracy aid with a greater risk of corruption,” says Therese Näsman.
UD Refuses to Comment
Roger M Karlsson is a Counsellor at UD who requested feedback from Sida and subsequently received it.
What do you say about Sida’s comments?
”I can’t say much. I haven’t had a chance to delve into what Sida writes. We work on overarching governance issues and have ongoing contact with the agencies under our purview,” responds Roger M Karlsson, referring further to Moa Lagercrantz, the Head of the Democracy and Human Rights Unit.
She, too, declines to answer our questions and refers to UD’s press service, which, ten hours later, provides a written response. It states the following:
”UD is now reviewing the feedback received from Sida in the continued work on this strategy. The preparation of the draft PAO strategy is ongoing in the Government Offices. A decision on the matter has not yet been made. UD does not comment on the draft strategy until a government decision is made. On August 8, a meeting was held at UD where PAO was invited, among other things, to discuss the design and focus of party-related support.”
Global Bar Magazine has sought responses but has not received answers from the Jarl Hjalmarson Foundation, the Liberal Party’s foundation SILC, and the Sweden Democrats’ foundation Hepatica.
Background
Support for party-oriented organisations (often referred to as PAO support) goes to foundations linked to the various parties. The support made its actual debut in connection with the Swedish efforts for the Baltic States in the 1990s and has since changed from time to time. In some periods, the aid has been linked to the number of MPs in each party’s parliament, while in other periods, it has been more linked to the quality of the respective foundation’s applications.