Social security with inequalities and big footprint

Outi Hakkarainen
Finnish Development NGOs Fingo

Finland’s second Voluntary National Review covers years 2016-20201. In these years the country has been ruled by two different governments. First by a centre-right-wing-populist one led by the Centre Party Primer Minister Juha Sipilä, accompanied by the Coalition Party and the Finns Party. This Government had a limited commitment on global responsibility and demonstrated it, for example, by cutting down ODA budget by 40 percentage. It’s social and climate policies were neither very ambitious, but still sustainable development and its national architecture were enhanced during almost four years of existence of this Government. Besides the second VNR report, the results are analysed in the follow-up reports of Finnish civil society published in 20172, 20183 and 20194.

The parliamentary elections in April 2019 chanced the political setting. A five-party Government was nominated at early June. New Prime Minister was Antti Rinne from the Social Democratic Party. The other parties were the Greens, the Left Alliance, the Swedish People's Party, and the Centre Party from the previous Government. The new Government programme was said to be world’s first one based on a sustainable development approach5.

Government’s first year hasn’t been an easy one. The Prime Minister presented his resignation 3 December to prevent the fall of the Government. The Centre Party withdraw their trust in him due to his actions linked to Postal Service workers’ strike. Sanna Marin was selected as a new Prime Minister. Her Government was nominated by 10 December. Soon after the Corona pandemic started to shape lives and societies all over the world. However, the five-party Government has been able to take several decisions and concrete actions to promote sustainable development, partly fixing decisions taken by the previous one.

This summary text reflects the assessment of Finland’s progress on the 17 SDGs. This part forms the essence of Finnish VNR report6 and is published, besides the complete report, as an excerpt. There are two assessments on each SDG, by the state authorities and by a group of Civil Society actors. It is explained below why CS actors decided to participate in making the official VNR and how they organised the process. After that Finnish commitment in general and architecture on the 2030 Agenda are presented. At the end comparative summaries of these two assessments are presented in three chapters, two of them focusing at the national and one at the international context.

A new approach for a Voluntary National Review

A new kind of cooperation was initiated between state authorities and Civil Society actors as both sides found it important that non-governmental actors present their assessment of Finland’s performance on the SDGs in the official VNR report. The cooperation would also further strengthen the connection between the Government and the Civil Society. Hence, the CS assessment would get more attention than by publishing it separately, and it was considered exciting to present Government’s and Civil Society’s independent assessments side by side.

All the ministries were involved in the assessment of state authorities, utilising the data of both SDG indicators and national monitoring mechanisms to their assessment, alongside with other relevant information. In the Civil Society assessment process, around 50 Finnish CS actors participated. Among them from small to big actors, from trade unions or national umbrella organisations of social sector to CSOs mainly working on development cooperation and global issues or smaller activist-based actors. The names of the participated organisations are listed at the end of each assessment.

The Finnish Development NGOs Fingo coordinated the CS assessment. An open invitation was made to CSOs and trade unions to participate in the process. The assessments were conducted in thematic working groups on each goal, from few up to 12 participants in each group. The assessment was based on published reports and other relevant available material. The groups defined overall trends for each goal based on the findings of the assessment, and listed recommendations for the Finnish government.

The common ground for the assessment was mainly easily found but on some goals it required more effort to build up a common understanding about the state of Finnish progress, but every final assessment was made with consensus. The summary result of the CS assessment is that Finland deserves a positive notion on two SDGs, numbers 4 and 6, neutral on seven (2, 5, 8, 9, 11, 14, 17) and negative on eight (1, 3, 7, 10, 12, 13, 15, 16).

The comparative analysis of this summary text is focusing on poverty, inequality, gender, energy, consumption and climate change. The assessments of authorities and Civil Society are largely well in line but there are also differences as well in the issues which have been brought up as in their interpretation. Civil Society assessment is in general more critical. Both parties had to struggle with the same challenge, i.e. very limited space for presenting the assessment of each SDG.

Finnish commitment and architecture on the 2030 Agenda

In relation to political commitment, institutions and policy processes to promote sustainable development in the society, Finland has been doing quite well. It presented its first VNR7 at the UN High Level Political Forum (HLPF) in New York in 2016 and published its first national implementation plan8 in 2017. The process for the second national implementation one was initiated in December 2019. Due to Corona pandemic its publishing and discussions at the parliamentary committees were postponed to the autumn 2020.

Finland monitors realisation of the SDGs in two ways. Statistics Finland reports the results according to the nearly 250 indicators defined in the UN’s 2030 Agenda, insofar as they are relevant to Finland and are available. Under the auspices of the Prime Minister’s Office, the national monitoring network identified 10 monitoring baskets and for each of them 4-5 indicators for which data is already collected. Important part of the follow-up scheme is the commitment to commission an external evaluation every four years. The first one, PATH 2030 study9 was published in March 2019. It provided useful information and recommended Finland to clarify its national targets and to draw up a roadmap to achieve them.

Finland has also scrutinised the state budget from the sustainable development perspective
In 2018, the Ministry of Finance took the decision to incorporate sustainable development into the state budget. The first steps were taken on the one out of two national sustainable development priorities as defined in the first national implementation plan: a carbon neutral and resource wise Finland. The current government programme states that sustainable development budgeting will be fostered.

Finnish Government has the main responsibility of enhancing sustainable development in Finnish society, but other sectors are invited to contribute. The National Commission on Sustainable Development, formed in 1993, promotes cooperation to achieve the SDGs and strives to integrate the strategic objectives of sustainable development into the national policy, administration and social practices. There are about 100 members, representing all actors in society including several CSOs from different fields. The chairperson is Prime Minister.

Other institutionalised spheres or processes of promoting sustainable development are Development Policy Committee, a multi-sectorial follow-up network working on the national assessment procedures, Expert Panel for Sustainable Development formed by academics, Youth 2030 Agenda group, Climate Policy Round Table, and the citizen’s panel on the sustainable development10 The Ministry of Education and Culture published its own Sustainable Development Policy in April 202011. It is an outcome of a collective three-year process. The process for a Roadmap towards 2030 will be initiated in the summer 2020. The Government has indicated that the process is going to be integral.

Irregular trends of poverty and inequality

There is no extreme poverty in Finland and a comprehensive social security covers the whole population. Still there are challenges in relation to poverty and inequality. A crucial problem is that increasing in inequalities and social exclusion seem to accumulate and extend across generations, causing intergenerational transmission of poverty. Hence, different forms of inequality are recognised, although experiences of discrimination have declined slightly since 2015 (18% > 16%). Individuals from minority backgrounds have a higher risk of facing discrimination than the rest of the population. Young people’s life satisfaction has taken a downward turn, although the majority (85%) are still satisfied with their lives. These general views are shared by the state authorities and the Civil Society, differences emerge in assessing the second VNR term.

According to the authorities significant changes have not taken place in the at-risk-of-poverty rate; the level of benefits has been raised to some extent for people living on basic social security; general increases have been made to certain benefits; persistent risk of poverty especially affects student-age young adults and elderly people aged over 80; the number of people in default has been growing; and many immigrant groups are at higher risk of poverty.

Civil Society similarly acknowledges increasing of benefits. It also brings up that index increases were re-introduced from the beginning of 2020. The trend is going in the right direction but the index cuts and freezes of benefits adopted in 2016–2019 had a significant effect on basic social security, and increases do not cancel out these cuts. More people came dependent on social assistance. In 2018 it was paid to one household in ten, 470 000 people. Together with higher tax rates on benefits, reduced share of rent covered by housing allowance and the so-called activation model of the unemployed contributed to inequality, particularly among the unemployed, families with children and students. Other vulnerable groups are those living alone, the underemployed, single parents, immigrants, people with disabilities, people with long-term illnesses, imprisoned inmates, and some entrepreneurs, the self-employed in particular.

In addition, health care client fees rose by 40 per cent in 2015–2016, which increased recovery proceedings arising from these fees by 50 per cent. In 2019 more than 457 000 payments were subject to debt recovery. The burdens such as economic, mental health and substance abuse on families with children tend to accumulate. Around 120 000 children are affected by poverty. The rate of children living in low-income households has increased from 10.2 per cent (2016) to 10.5 per cent (2018).

The authorities’ assessment tells that proportion of low-income earners has gradually declined in the oldest age groups, that challenge is to maintain a relatively equal distribution of income, that Finland has succeeded in avoiding growth in income disparities over the 2010s. Civil Society assessment equally brings up that disparities in income and wealth ceased growing in the 2000s but underlines that from 2015 to 2019 changes in current income redistribution and taxation have favoured those in higher income brackets.

Gender equality requires attention

Gender equality situation is good, but there are still challenges, such as violence against women and domestic violence. Finland is the second most violent EU country for women, but there are plenty of ongoing measures focused on prevention and service improvement. As many as 47 per cent of Finnish women have experienced physical and/or sexual violence, and disabled women and immigrant women experience violence 2 to 3 times as frequently as other women. The financing of women’s shelters and the number of places in them is insufficient considering the need and recommendations. Following the ratification of the Istanbul Convention in 2015, services available for victims of violence have been increased.

The equality-oriented family leave reform is making progress and the social security reform is expected to incorporate a gender perspective. Services relevant to sexual and reproductive rights and health are at a good level. Finland’s challenges include equality issues in the world of work. Woman’s euro is 84 cents, and an immigrant woman’s 62 cents. Women’s employment rate is lower than that of men, and they work part-time and under fixed-term contracts more often than men. Unpaid care is unequally divided between the genders.

The political participation of women has increased. In the 2019 Parliamentary election, a record number of women were elected as Members of Parliament, 46 per cent of all MPs. The Government has a female majority, and Finland has its first female European Commissioner. Other positive developments include growing skills in gender equality promotion and the stronger role of equality promotion in some branches of Government. Government Proposals incorporated a slightly higher number of gender impact assessments when compared with previous years. Gender-aware budgeting was developed in a project led by the Ministry of Finance.

Towards sustainable energy production, consumption and climate justice

In relation to energy, consumption and climate issues the state authorities’ and the Civil Society’s assessments are largely similar, but differences also exist. Both parties express that the availability of energy is steady in Finland and there is practically no energy poverty. A universal access to affordable and clean energy is ensured through a well-functioning energy market and regulation. Electricity prices are relatively low by European standards. The share of renewable energy is increasing, to which both technological advancement and policy measures have contributed. The challenge is the high level of consumption, but Civil Society assessment presents critical views on other issues as well, such as dilemmas in energy subsidies, and use of nuclear power and peat as a source of energy.

Renewable energy accounted for 41 percent of final consumption in 2018. The target is to reach at least 51 percent by 2030. About four fifths of Finland’s renewable energy is bioenergy, most of which is based on side streams from the forestry industry and forest management. Hydropower accounts for 10 percent, and there has lately been growth in the use of wind power and heat pumps. The act prohibiting the use of coal for energy in 2029 entered into force in spring 2019.

The Civil Society assessment brings up that the transition to sustainable energy use is being hampered by the fact that renewable energy subsidies are not allocated on the basis of greenhouse gas impacts. Biofuels are disproportionately subsidised, especially considering that wood-based fuels are not carbon neutral. Hence, fossil fuels receive higher subsidies than renewable energy, around EUR 1 billion a year.

The Civil Society assessment also presents that it is problematic that 17 per cent of Finland’s total energy consumption is covered by nuclear power. The total emissions of the production chain of nuclear power are not low, and it is not a risk-free and environmentally sound form of energy. Around 6 per cent of Finland’s energy is produced with peat, but it accounts for some 12 per cent of Finland’s global-warming emissions.

The challenge of Finland is the consumption of raw materials. It is high in relation to gross domestic product and per capita, the highest in the world. Total energy consumption was 1.38 million terajoules in 2018, and 40 per cent of fossil fuels. Finland’s economy is closely tied in with the consumption of raw materials and energy. The economy produced 0.21 kg of carbon dioxide per EUR 1 of GDP, more than double that of Sweden or Switzerland. The average material footprint among Finns is over 40 000 kg per person a year, and the trend is rising. A sustainable, globally just level would be around one fifth of current footprint. Finland has difficulties in reaching targets set for recycling of waste.

The Finnish Innovation Fund Sitra estimates that Finns need to halve their carbon footprint to avoid over-consumption of natural resources. Finland lacks a comprehensive plan on how to achieve sustainable level of material use. Finland does not, for example, monitor the key figures indicating the material efficiency of its economy other than the aggregating DMC indicator, and only fragmented data is available on the global environmental impact of Finnish consumption.

Finland has promised to halve its food waste by 2030. This is a welcome policy, since Finns waste 400 million kilograms of edible food a year. Finland has succeeded in its target of drafting a roadmap for a circular economy in 2016 and a complementary circular economy action plan. The roadmap sets the target of Finland being a leading nation in circular economy by 2025.

Finland has succeeded in reducing emissions and catalysing innovations especially by combining economic incentives and legislation as well as promoting circular economy. Finland wants to be carbon neutral by 2035 and carbon negative soon after that. The goal is to reduce the carbon footprint of consumption by an average of 50 per cent by the year 2030 according to the Medium-term Climate Change Policy Plan for 2030. National plastic roadmap presents a set of key actions to find solutions to reduce, refuse, recycle and replace plastics.

The Government is updating national climate legislation and the national 2050 target, which is currently an 80 percent reduction in Green House Gas (GHG) emissions compared to the 1990 level. The biggest challenge is to achieve a rapid reduction of GHG emissions. The direction is alarming. The emissions have declined over the long term but increased in 2016–2018.

More commitment needed to promote sustainable development at the international context

Finland’s objectives for its global responsibility are in line with the 2030 Agenda. The purpose of development policy is eradication of extreme poverty, reduction of inequalities and promoting sustainable development. The cross-cutting objectives are gender equality, non-discrimination and climate sustainability. The geographical focus is Africa and particularly fragile states. These aims are materialised in concrete actions, but conflicting decisions have also been taken during Finland’s second VNR term.

The authorities’ assessment lists, for example, following activities as Finland’s achievements: Through the UN and other international organisations and partnerships, Finland supports and promotes universal social protection model, in which actions and systems cover the entire population. In 2015–2019, Finland supported the construction of social security systems in Africa and Asia, with particular emphasis on women, girls, people with disabilities and the objectives of decent work.

Finland’s big challenge is that it is not meeting its obligations regarding the global reduction of poverty. From 2015 to 2019, Finland cut approximately 40 per cent of its ODA, also from CSOs. Hence, Finland is not complying with the payment of 0.2 of GNI to the least developed countries, the figure in 2019 was 0.15. The new Government has decided to increase the disbursements and to formulate a roadmap to reach these international commitments.

Finland has much to improve in its climate finance. The allocation of finance lacks clear criteria and openness. Finland’s fair share of the USD 100 billion commitment to climate finance agreed in the Paris Agreement would be at least USD 200 million a year, but the mobilized finance has been less than half of this. Currently the focus is on the private sector and on market-based instruments, although predictable public grant-based finance should form the foundation for climate finance. Finance is neither being targeted equally at mitigation and adaptation.

Finland has successfully made the rights and status of women and girls a development policy priority in 2016 and defends sexual and reproductive health and rights internationally. Hence, promoting SRHR is one of the key themes of the new guidelines on humanitarian assistance. Finland’s challenge is that the drastic cuts to ODA cut also funding on women’s and girls’ rights. The goals and impact of this priority have remained unclear, and gender equality has not received the promised cross-cutting attention in development policy.

The new Government expresses good intentions on coherence and global responsibility in its programme. A concrete example is the decision to proceed law on mandatory human rights due diligence based on the UN Guiding Principles on Business and Human Rights. However, there are still many steps to be taken, to gain full policy coherence, e.g. to assess the impact of all our actions on developing countries, and to base all our foreign policy on global responsibility. Ecological footprint of Finland is more than three times larger than the global average and our consumption has negative effects abroad. Finnish accounting of greenhouse gas emissions does not consider the impact of Finnish consumption beyond its national borders.


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