According to recommendations made by the Governmental Budget Optimisation Group, foreign aid from Iceland to developing countries will be reduced.
As reported, this committee has been tasked with trying to find areas where Iceland could make cuts to its budget. Amongst the recommendations is to make cuts to foreign aid.
Vísir reports that the previous government approved a measure that would pay 24 billion ISK to developing countries over the next four years – or about 1,500 ISK per Icelander, per month, for four years.
This total amounts to only 0.42% of Iceland’s GDP, but that amount is too great for Iceland to bear, Progressive MP Vigdís Hauksdóttir told reporters, adding, “A bankrupt man cannot pay for others.” She did not say by how much foreign aid should be cut.
Former Minister of Foreign Affairs Össur Skarphéðinsson strongly disagrees, telling Vísir, “I find this a very tragic suggestion, and very merciless. Not least of all in light of the fact that Iceland has gone through a bank crash five years ago, yet we are still amongst the richest countries in the world.”
Iceland has an estimated per capita GDP of $38,400, with national unemployment at about 4% and inflation that is predicted to fall well into 2016.