Not everything that creates jobs is aid

Aukrust said that "development policy is about so much more than aid" on Dagsnytt 18 last week. Therefore, not all development policy instruments should be funded through the aid budget either.

There is much we agree on. Jobs are the core of development. No country has achieved development without productive jobs. Norwegian aid is currently far too fragmented with more than a hundred goals, 1,500 agreements, and 800 partners. Fewer channels, concentration on fewer topics, and more core support is the right medicine.

Aukrust is also right about IDA, the World Bank's fund for the poorest, which he called "perhaps the most effective aid we can provide to combat poverty."

The fact that Aukrust says support for IDA will increase is the best news from last week's debate. We at Langsikt have proposed that 15 percent of Norwegian aid should go through IDA.

The government commissioned and received the answer itself

In 2023, an expert committee appointed by the government, led by Ole Jacob Sending, delivered a proposal for a new aid architecture with three pillars:

• 0.7 percent of gross national income for poverty reduction and humanitarian emergency aid
• 0.3 percent for global public goods such as climate, clean oceans, and pandemic control (with a target of 0.7 percent by 2032)
• 0.7 percent in mobilized private capital. This is to be achieved through guarantees, cooperation with the private sector, and increased support for Norfund outside the aid budget.

By adding these tools on top of aid, the Sending committee proposes a far more ambitious development policy than the aid budget can support alone. Now that Aukrust is highlighting these same tools, he should also consider the associated structural changes.

The Labour-Centre government never actually followed up on the recommendations for a new structure.

This means that increased investment in private capital and global public goods is not happening on top of poverty reduction, but at its expense.

We can see the result in the aid budget. Norfund, the state investment fund for business in developing countries, received five billion kroner in 2025. Of this, 75 percent is classified as so-called loan transactions in the national budget, rather than as expenses. Nevertheless, the money is counted as aid and is included in Norway's goal of spending one percent of its gross national income on aid.

In the guarantee scheme, money has also been set aside in the aid budget for two years to cover potential future losses. This loss provision is unnecessary and has still not been used.

We believe that Norfund should be further strengthened, but that it must be done correctly. The question is how it should be financed.

Norfund invests money that returns with interest and can be reinvested. A vaccine dose is given away. Why should these two initiatives compete for the same krone?

Private capital goes where the money already is

The idea behind mobilizing more private investment is sound. The state can provide guarantees and take on some of the risk – for example, regarding unstable currency or challenging framework conditions – so that private investors dare to invest in poor countries. One public krone can then trigger several more from private sources.

But the government itself warns against the pitfall. In their World Bank strategy for 2026–2030it states that "there is a risk that high mobilization targets shift investments toward markets where access to capital is already good."

In 2023, the world's development banks mobilized 88 billion dollars in private capital for low- and middle-income countries. Of that, only 11.6 percent went to low-income countries. The poorer a country is, the more subsidies it requires to get private entities to invest. There is therefore a danger that politicians will shift aid toward more developed countries.

Trends in Swedish aid paints a similar picture. The share of trade-related aid reaching the least developed countries fell from over 40 percent in 2021 to 28 percent in 2025.

The Swedish International Development Cooperation Agency, Sida, also warns that aid to the poorest countries will continue to decline. They also point out that guarantees are more difficult to utilize in the poorest countries. These are dilemmas that Aukrust must take into account.

First test in October

The minister has now begun to address what should be increased: IDA, Norfund, and guarantee schemes.

The government held its budget conference last week, and we hope he took immediate action there. IDA funding should be increased, preferably as early as next year's budget. Why wait to get the most out of aid? Regarding Norfund and state guarantees, the budget proposal should also address whether they should grow within or outside the one-percent target, and we hope the white paper coming this winter will propose a new structure.

In addition, Aukrust should not forget that he has also promised more money for measures we know have a high impact per krone, for example within social safety nets, health and sexual and reproductive health and rights.

Funding for this can be found through the planned de-fragmentation of aid, and by cutting less effective and less relevant measures, for example using our previously presented list of cuts in Panorama.

Regardless of what is chosen, the share of Norwegian aid to the poorest countries cannot continue to fall. It has gone from 56 percent in 2021 to 29 percent in 2025.

We interpret the minister as saying that this trend will be reversed, and we hope we are reading him correctly.