Iceland International development funding slashed

recessionAccording to Iceland’s Ministry for Foreign Affairs, the current budget plan foresees a 25 percent cut to spending on third-world development projects next year, amounting to around a billion kronur (USD 7,936,510). The cut will reduce the proportion of Icelandic GDP spent on international development to 0.23 percent. The EU benchmark figure is 0.35 percent.

Last week, the Icelandic International Development Agency announced it is to end its 20-year work in Namibia at the end of 2010 because of the funding cuts. Icelandic development money also goes to the UN, the World Bank, and to peacekeeping and emergency relief projects.

Iceland invested ISK 4.272 billion in international development last year, which was reduced to 4.2 billion this year and a whole billion less next year. However, because of the continued weakness of the Icelandic krona, the reduction feels much bigger when calculated in other currencies.

Sighvatur Bjorgvinsson, head of the Icelandic International Development Agency, said he does not expect Iceland’s lower contributions to last long because Iceland has applied for EU membership and prospective member states are also expected to contribute 0.35 percent of GDP to international development. “Prospective EU member states have to live up to these responsibilities – even those poorer than Iceland,” he told mbl.is.

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