OECD Development Co-operation Peer Reviews: Iceland 2023

Annex A. Progress since the 2017 DAC peer review recommendations

Towards a comprehensive Icelandic development effort

 

2017 Peer review recommendations	Progress
As Iceland discusses its response to the SDGs at home, it needs to use its policy coherence function to enable, in a light‑touch manner, better understanding of policy trade-offs across government, including any impacts in developing countries.	Not implemented Formal policy coherence framework to address policy trade‑offs has not been developed. The Prime Minister’s Office chaired the first meeting of Sustainable Iceland – a platform that includes a representative from each Ministry and municipalities – to speed up actions towards the SDGs and the Government’s well-being economy goals in December 2022. This platform could systematically consider the spillover effects of its domestic policies on partner countries.
As Iceland develops its national plan for delivering on the 2030 Agenda and the institutional framework through which this will take place, it should clarify how development cooperation will be integrated into the plan.	Implemented Iceland has progressively integrated SDG targets across its different government policies. Its five-year fiscal strategy links SDG targets to specific government policy objectives, while its 2019-23 policy for international development co-operation prioritises ten SDGs.

Vision and policies for development co-operation

 

2017 Peer review recommendations	Progress
As the MFA plans for a new development policy and rolling action plan for the period 2017-21, it should define criteria to prioritise activities in line with Iceland’s poverty focus and comparative advantage. This should help to guide future selection of partners and funding instruments.	Partially implemented The 2019-23 policy prioritises poverty alleviation and support to LDCs, while bilateral allocations to LDCs are among the highest of DAC members. Maintaining focus and prioritisation in the selection of partners and themes is critical in a time of expanding demand, not least because of its limited human resources.
The MFA could use its existing country strategies in crisis-affected areas to develop clear and consistent policy directives across Iceland’s development programme for crisis management.	Partially implemented Existing country strategies in conflict-affected countries (Sierra Leone and Uganda) allude briefly to crisis-affected areas, but clear policy directives have not been issued. This is an area where Iceland could consider working more with partners given its capacity constraints.

Aid volume and allocation

 

2017 Peer review recommendations	Progress
In line with Iceland’s continued economic recovery and forecasts for robust economic growth, Iceland should increase its ODA level in real terms, using its five-year budgetary framework to establish a more ambitious timeline for meeting its 0.7% UN ODA to GNI commitment.	Partially implemented Iceland has increased its ODA level in real terms, albeit largely thanks to in-donor refugee costs. Its five-year budgetary framework has 0.35% of GNI as the target, but no timeline for meeting its 0.7% ODA to GNI commitment.

Organisation and management

 

2017 Peer review recommendations	Progress
As it consolidates the merger of its bilateral agency with its Ministry for Foreign Affairs, Iceland should review the implementation of its recent reforms to ensure that it remains a responsive, flexible and high-quality development cooperation provider.	Partially implemented The integration of ICEIDA staff within the MFA enabled a broader understanding of development co-operation issues across MFA professionals. After the merger of ICEIDA, and as recently as October 2022, the MFA underwent several re‑organisations of its development co-operation to ensure synergies with foreign policy decisions while avoiding urgent political issues being prioritised over development co‑operation. The recent re-organisation will test how flexibly and strategically Iceland uses its different channels to implement its development policy.
The Ministry for Foreign Affairs should pay attention to retaining staff with development cooperation expertise through careful planning of rotations, promotional opportunities and focusing on future training needs for both development professionals and diplomats.	Partially implemented Iceland has hired mid to senior level development professionals, and introduced additional development training and career opportunities, including through secondments. While these increased opportunities enable a potential career track for professionals with development co-operation expertise, in practice it is not always possible to ensure a rotation from one development post to another. JPOs and young professional programmes contribute to creating a pool of external experts with development expertise.

Development co-operation delivery and partnerships

 

2017 Peer review recommendations	Progress
In reflecting on how to deepen and strengthen its work with the private sector, Iceland could draw upon its experience working with geothermal energy actors, an area which speaks to its comparative advantage as a donor.	Partially implemented Iceland set up the SDG Fund in 2018 to provide seed money to private sector actors, including geothermal energy actors. There is still scope to demonstrate how partnerships with the private sector are driven by development objectives and to incentivise additional development-related private financing. An evaluation of how Iceland engages the private sector was completed in December 2022.
Iceland should ensure that its Reykjavik-based scholarship programme aligns with the over-arching poverty focus of Iceland’s programme and that it achieves tangible development results.	Partially implemented The training programmes are now under one GRÓ Centre umbrella and affiliated with UNESCO as a Category 2 Centre. GRÓ recently developed a theory of change, which will facilitate reporting on results. Further efforts are underway to consolidate the four programmes to ensure value for money and efficiency gains and to build on short-training programmes in partner countries.
Iceland could better define its strategic vision and rationale for selecting partners, including through developing principles to guide its partnerships with civil society.	Implemented Iceland’s Development Policy sets out its priorities, clear focus areas, and priority partners. Iceland developed a strategy for civil society engagement in 2022 and has put in place seven new framework agreements, further strengthening its CSO partnerships.

Results and accountability

 

2017 Peer review recommendations	Progress
In its new policy and action plan for development cooperation, Iceland should develop a more comprehensive approach to managing for results at the strategic, programme and activity levels, aligning with the SDGs and partner government frameworks.	Partially implemented Iceland does not have a comprehensive RBM framework or policy, but there is an RBM culture in place among MFA professionals. In its bilateral co-operation, the new country strategies being finalised are also aligning Iceland’s and each partner country’s objectives better with each other and with the SDGs, and linking Iceland’s activities with the expected impact.
Iceland should use its Committee on International Development Cooperation and new media platforms to improve public and political awareness of its development results, using annual public opinion surveys as a measure for success.	Implemented While the Committee on International Development Cooperation has not been used for this purpose, other channels (media, targeted training, awareness campaigns) have been used to engage the public on international development co-operation. Public opinion surveys commissioned by the MFA since the last peer review show strong support for Iceland’s development assistance and support to multilateral organisations.

Humanitarian assistance

 

2017 Peer review recommendations

Progress

Iceland should designate a single coordination mechanism for responses in crisis-affected countries, giving due consideration to existing structures, for example the ICRU.

Partially implemented A strategy for emergency and humanitarian assistance outlines Iceland’s strategic vision. Functions of the Icelandic Crisis Response Unit (ICRU) have been divided into peacekeeping and security-related roles (not counted as ODA) in the Directorate for Defence. There is no single co‑ordination office to manage humanitarian assistance and development response in crisis-affected countries.