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Deductions for in-country refugee costs lead to redistribution of Swedish foreign aid

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The cost for receiving refugees in Sweden is partly financed by deductions from the Swedish development cooperation budget, which has consequences for Sida's activities. At the same time, Sweden is increasing its support for peace and conflict resolution in the Middle East, with a special focus on the crisis in Syria.

The government announced in autumn 2015 that deductions from the development cooperation budget would be necessary to fund the increased costs for the reception of refugees in Sweden. In 2016, the cut in the development cooperation budget is expected to 30 per cent (13 billion SEK) of the Official Development Assistance (ODA) budget, amounting to 43 billion SEK.

Sida’s total budget remains unchanged compared to 2015, however redistribution of funds is necessary to meet new government policies.

–Since Sida's total funds remains unchanged for 2016 and the Swedish government is increasing the priority of the crisis in Syria, there will be consequences for Sida's support to development cooperation in other areas, says Charlotte Petri Gornitzka, Director General at Sida.

Hence, Sida is increasing the support for peace and conflict resolution in the Middle East, particularly support in Syria and neighbouring countries. Sweden’s generous humanitarian assistance will remain strong and the budget slightly higher compared to last year. The support for civil society organisations through Swedish framework organisations will remain unaltered. The crisis in Syria is a high priority and Sida contributes with both humanitarian assistance and long term support.

–Sweden is still one of the top-five global donors of humanitarian aid. Simultaneously we are focusing on long term support in order to help fragile states progress in the right direction, says Charlotte Petri Gornitzka.

For other areas the allocations will decrease compared to the year before.

–The budget cuts will be most noticeable in thematic global programmes and research cooperation where allocations will decrease with up to 20 %, says Charlotte Petri Gornitzka.

As an example, Sida's support for global education and health efforts will decrease. Global research efforts will also receive less support in 2016 than the year before. For bilateral research cooperation, the reduced allocation could mean that planned doctoral programs will be postponed.

In some areas, where budget cuts are considered, a number of agreements with cooperation partners will have to be renegotiated or even cancelled in some cases. The dependence of the cooperation partner and its beneficiaries are carefully considered when making these decisions.

–Swedish foreign aid is characterized by broad development partnerships. Therefore, we do everything to maintain our good relations. In cases where we have to lower our grants, we have a close dialogue with our cooperation partner to find the best solutions. Sometimes it can be to postpone payments until next year, and sometimes it can be to opt out parts of a project, says Charlotte Petri Gornitzka.

Sweden is one of the world's largest donors

The aim of Swedish development cooperation is to enable people in countries with lack of resources to improve their living conditions. Sweden complies with United Nations’ recommendation of dedicating 0.7 per cent of Gross National Income (GNI) to development aid, which is also the commitment of the European Union.

–Deductions for the costs for receiving refugees are considered official development aid. But even after these deductions, Swedish development aid still meet the UN recommendation of 0.7 percent of GNI, says Charlotte Petri Gornitzka.

The size of the development cooperation budget, how it is distributed and the priorities of Sida are all based on political decisions by the Swedish Parliament and the Government.