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Sweden’s new right-wing govt slashes development aid

Sweden, one of the world's biggest international donors, is planning drastic aid cuts in the coming years, the country's new right-wing government said in its budget bill presented on Tuesday.

Published: 8 November 2022 22:12 CET

Sweden's new right-wing govt slashes development aid

The headquarters of Sweden's aid agency SIDA. Photo: Jessica Gow/TT

Prime Minister Ulf Kristersson’s government said it planned to reduce the country’s international aid by 7.3 billion kronor ($673 million) in 2023, and by another 2.2 billion kronor in 2024.

That is around a 15-percent reduction from what had been planned by the previous left-wing government and means Sweden will abandon its foreign aid target of 1 percent of gross national income.

International aid for refugees will be capped at a maximum of eight percent of its aid, and will also be reduced.

According to the specialised site Donor Tracker, Sweden was the world’s eighth-biggest international aid donor in terms of absolute value last year, and the third-biggest in proportion to the size of its economy, donating 0.92 percent of its gross national income, behind Luxembourg and Norway.

The new government, which is backed for the first time by the anti-immigration Sweden Democrats, had announced in its government programme last month that it would be cutting foreign aid.

Since 1975, Stockholm has gone further than the UN’s recommendation of donating at least 0.7 percent of its wealth to development aid.

Despite its growth forecast being revised downwards — the economy is expected to shrink by 0.4 percent next year and grow by 2 percent in 2024 — the 2023 budget forecasts a surplus of 0.7 percent of gross domestic product.

It calls for an additional 40 billion kronor in spending, with rising envelopes for crime fighting and the building of new nuclear reactors, as well as a reduction in taxes on petrol and an increase in the defence budget.

The new government is a minority coalition made up of Kristersson’s conservative Moderates, the Christian Democrats and the Liberal party, backed in parliament by their key ally the Sweden Democrats to give them a majority.

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EXPLAINED: What you need to know about Sweden's new military spending report

What is the Swedish Defence Commision?

The Swedish Defence Commission is a cross-party forum which seeks to ensure broad political agreement around Sweden’s defence requirements. It brings together representatives of all eight parties in the Swedish parliament, with two each from the Moderates, Sweden Democrats and Social Democrats and one each for the other parties.

There are also advisers and experts from the Ministry of Justice, the Ministry for Foreign Affairs, the Ministry of Defence, the Ministry of Finance, the Prime Minister’s Office, the Swedish Armed Forces, the Swedish Defence Materiel Administration and the Swedish Civil Contingencies Agency. Members of the committee are supported by a secretariat comprising one principal secretary and five secretaries.

What is the report they have delivered?

The committee on Friday delivered its final, report, “Strengthened defence capability, Sweden as an Ally“, meeting the deadline given by the country’s defence minister Pål Jonson when he ordered the committee to develop proposals for a new defence bill in December 2022, with a total of four reports, the first three of which were delivered in April 2023, June 2023, December 2023.

What have they recommended?

The committee have recommended that Sweden’s budget is increased from 119 billion kronor a year in 2024 to 185 billion kronor in 2030, which would bring total spending to 2.6 percent of Sweden’s Gross Domestic Product (GDP).

The committee said it agreed with the recommendations given by Micael Byden, Supreme Commander of the Swedish Armed Forces in November 2023, which were that Sweden should increase or improve:

air defence and in particular its cooperation within NATO’s Integrated Air and Missile Defence (IAMD)
its ability to combat air, land and sea drones
its integration with NATO’s command system
its logistics, so that it can provide Host Nation Support and serve as a base for other units from other Nato countries.
its capacity to operate with military units outside Sweden’s borders

But the committee also made additional recommendations beyong those given by the armed forces, calling for:

two new army brigades, so that Sweden would have three mechanised brigades and one infantry brigade by 2030
a new Norrland Infantry Regiment,
an increase in the number of conscripts trained a year from the current level of 8,000 to 10,000 in 2030 and 12,000 in 2032, and possibly to 14,000 in 2035
a boost in Sweden’s air defence capability, particularly to counter drone attacks
stocking up on additional ammunition, including air-to-air and cruise missiles, and spare parts
20 new companies and platoons dedicated to defending Sweden’s territories
increased refresher courses for conscripts, extra funding of voluntary defence organisations, and expansion of the officer education programme

How will the cost of funding this military expansion be met?

While they were agreed on what needed to be done, party representatives on the committee did not agree on how much needed to be spent or how ti should be financed.

The Centre Party representative said that spending should be higher, comprising 3 percent of GDP.

The representatives from the Social Democrats, Left Party, and Green Party, added a statement to the report when they called for a section on how the extra spending should be financed.

Peter Hultqvist, who served as defence minister under the former Social Democrat government, called for a new beredskapsskatt, or “Readiness Tax” to fund the increase, saying it was disappointing that the committee had not been able to agree on financing.

“This demand is so big that it risks pushing other pressing requirements out of government spending plans,” he said. “There is a risk that healthcare, education and elderly care will be hit.”

But Ulf Kristersson, Sweden’s prime minister, rejected the idea of a new tax.

“It’s no secret that the parties on the left always see reasons to raise taxes, and that’s the case this time as well, I assume. But that is not our way forward,” he said. “We must be able to prioritise Swedish defense, and I understand that there is now complete agreement that it is an important political task.”

Anna Starbrink, a defence spokesperson for the Liberals, the smallest party in the government, said that the Swedish Defence Commission had not in the past been tasked with developing funding proposals.

“This is a new idea from the opposition and from the Social Democrats’ side is about nothing more than forcing through a new tax hike through the defence commission, and that’s something the rest of us don’t want to go along with,” she said.

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