ST PAUL, Minnesota — Luxembourg is a small nation sandwiched between Belgium, France and Germany. It is famous for being a rich and safe place where workers find excellent wages and start-up companies receive the tools they need to prosper. Since the decline of the steel manufacturing industry, the country (formally known as the Grand Duchy of Luxembourg) became best known for its booming economy and profitable investments. However, many overlook one of the most significant—and most interesting—parts of its economy: investment in foreign development. This article looks into Luxembourg’s world-leading foreign aid. It explores, the nation’s exemplary focus on international development through its past success and a selection of current aid projects.
Prioritization in Foreign Aid
From 2017 to 2020, Luxembourg was consistently in the top four nations for foreign aid spending in developing countries as a percentage of Gross National Income (GNI). It has been one of few nations to repeatedly exceed the U.N.’s target of 0.7%. In 2020, the country allocated 1.025% of its GNI towards foreign aid.
This commendable work was possible because Luxembourg has been very explicit about its prioritization of foreign aid. In its Road to 2030 plan, which states that the country’s primary international affairs goal is the “eradication of extreme poverty and the promotion of economic, social and environmental sustainability,” Luxembourg set more than a dozen commitments, including a continued spending target of 1% of GNI and a focus on driving self-sustainability instead of reliance.
Franz Fayot, the Minister of the Economy, the Chairman of the Luxembourg Socialist Workers’ Party and the Minister for Cooperation and Humanitarian Action, often tweets about his focus on foreign aid. June 2021, in an EU ministerial meeting about crisis relief from the pandemic, Fayot directly stated that “investing in human development matters!”
Past projects show just how successful Luxembourg’s world-leading foreign aid really is. LuxDev, the agency in charge of foreign development, submits a mid-term and a final evaluation for every project. It ranks the projects’ successes on a scale from one to six (one being best) and provides a quantitative assessment based on “Objectively Verifiable Indicators.”
Three specific projects that turned out to be tremendously effective were supporting Mongolia’s fight against Cardiovascular Diseases (CVDs), providing more opportunities for law students’ education in Laos and promoting economic irrigation in Vietnam. These projects scored a 1, 2 and 2 respectively.
Its success, however, is much more tangible than an out-of-six rating. Following Luxembourg’s work in Mongolia, care for CVDs is substantially more accessible, health care staff receives better training and surgery is a more realistic option for care. In Laos, teacher quality, facilities and equipment are considerably improved. Lastly, Cao Bang, the province targeted by Luxembourg’s project in Vietnam, moved up in the Provincial Competitiveness Index from 58 out of 63 to 54.
Luxembourg is currently running 62 foreign aid projects across five continents (excluding Australia and Antarctica). These projects are all important, providing aid to the people and nations in need. Therefore, it is difficult to pick just three to focus on. Instead, LuxDev breaks down the projects into multiple sectors.
Currently, 22 projects are underway in the local development sector, covering everything from government to food security to natural resources. In the education sector, LuxDev is commissioning 21 projects, providing basic education and vocational training among other levels of schooling. The remaining projects are scattered across sectors, including health, renewable energy and finance.
Every single one of these projects contributes to the development of financially struggling regions by collaborating with local governments and agencies as well as providing funding. These means of aid work together to help nations become self-reliant, truly embodying the spirit of righteous, charitable giving while promoting self-sufficiency.
To sum up Luxembourg’s world-leading foreign aid, the small nation’s prioritization of international development has led to remarkable results as shown in the successes of its work in Mongolia, Laos and Vietnam. LuxDev continues to embark on a variety of aid missions to help developing nations become self-sustainable.
– Sam Konstan