Iceland and foreign aid: from recipient to donor

Abstract

Iceland came under the jurisdiction of the Norwegian King in 1262 to later become a colony of Denmark for about 500 years. Already in the second half of the 18th century, the Danish king initiated actions that aimed to improve the precarious situation of the Icelandic population. After independence in 1944, Iceland enjoyed the highest per capita support of the Marchall Plan (European Recovery Program) following World War II. Thereafter Iceland received aid and loans from the World Bank according to which Iceland was a developing country until 1974. In 1981, the Icelandic International Development Agency (Iceida) was established, substituting the office for Iceland´s Assistance to the Developing Countries, and since 2013 it is a formal member of the Development Assistance Committee (DAC) of the OECD. Iceida and now Ministry of Foreign Affairs has in recent years been engaged in bilateral collaboration with mostly three countries, one of which is Malawi. The aim of the chapter is to describe and analyze the transformation of Iceland from a net receiver of foreign aid to a donor country, with particular attention given to its involvement in Mangochi District in Malawi in Southern-Africa. From early engagement within the fishing sector at the shores of Lake Malawi in the early 1990s, the focus of the collaboration in the area moved to health services, water-and-sanitation, primary education, and social sector initiatives, later expanded to district-wide support. On the basis of achieved results along the years of collaboration, it is concluded Iceland can constructively contribute to international development in the new Global Agenda 2030 era if due attention is given to the needs of poor people. Finally, it is argued that in addition to multilateral assistance, Iceland on the basis of its history and economic strength can play an important role with partner countries in a bilateral collaboration that addresses sector-wide issues of importance in the daily lives of poor people, as currently is the case in Malawi.