Gunilla Carlsson, minister for development cooperation, insisted that the move was "not a money-saving measure." The 9.5 billion kronor ($1.38 billion) bilateral aid budget will remain, but will be redistributed and focused on a smaller number of countries.
Sweden will continue to have a relationships with countries in which development projects are axed, Carlsson insisted.
"We should not be too worried about axing aid projects. We have now created order and structure in Swedish aid. The relevant thing now is to discuss the content of what we do," she said.
Those countries that need foreign aid are not best served by having a large numbers of donors, Carlsson argued in an article in Dagens Nyheter on Monday.
"Their administrations, which are often limited in size, are weighed down by handling contact with a large number of donors," she wrote.
Countries including China and Vietnam will have aid from Sweden stopped. The countries that will continue to receive Swedish aid fall into three categories. The first category encompasses twelve countries in Africa, Asia and Latin America, in which Sweden will pursue long-term aid projects.
Another twelve countries or regions in Africa, Asia, the Middle East and Latin American, which are either conflict-hit or have recently been the scene of conflict will form another category.
The third category of aid recipient is countries in eastern Europe, where Sweden intends to deepen cooperation in order to aid European integration.
Göran Holmqvist, director general of the Swedish International Development Agency (SIDA), the government body in charge of international aid projects, welcomed the choice to focus on a smaller number of countries. But, he said, it was "a wrench" to leave behind countries and people who had been recipients and administrators of Swedish foreign aid for decased.
He said that the fact that 70 countries had been recipients of Sida aid had made it "very hard to run effective development work."
"Increased focus makes for more effective aid and better international distribution of labour, and means that recipient countries won't have to deal with an intermittent flow of aid."
But Social Democrat aid spokesman Kent Härstedt slammed the new policy, saying it was "nearly completely abandoning Asia."
"After all, this is a part of the world containing nearly half the world's poor people live. It seems at the moment like we will give more aid to Europe than to Asia" said Härstedt.
He also said that he thought it was strange that Sweden's 30 billion kronor aid budget did not have capacity for aid to China for projects on areas such as the environment.
"China is a ticking environmental time bomb, and Sweden should be there," he said.
Facts: Swedish foreign aid
Countries which will receive Swedish aid:
Long-term development assisstance: Burkina Faso, Ethiopia, Kenya, Mali, Mozambique, Rwanda, Tanzania, Uganda, Zambia, Bangladesh, Cambodia and Bolivia.
Countries currently or recently involved in conflicts: Burundi, Congo-Kinshasa, Liberia, Sierra Leone, Somalia, Sudan, Afghanistan, East Timor, Iraq, the West Bank and Gaza, Colombia and Guatemala.
Countries in eastern Europe: Albania, Bosnia-Herzegovina, Georgia, Kosovo, Macedonia, Moldavia, Serbia, Turkey och Ukraine.
Countries to lose Swedish aid: China, Laos, Vietnam, Honduras, Nicaragua, Sri Lanka, the Philippines, Namibia, Nigeria, South Africa, Zimbabwe and Belarus.