Responsibilities for development cooperation

The Federal Ministry for Economic Cooperation and Development (BMZ) is the leading ministry in the formulation of German development policy.

Other actors in development cooperation include: i) the Agency for Technical Cooperation (GTZ), ii) the German Bank for Reconstruction (KfW), iii) more than thirty state and nonstate
actors.

The level of integration between development agencies remains low and transaction costs high. Although progress has been made in streamlining and integrating agencies, the OECD-DAC suggested in its 2005 peer review of Germany that efficiency gains could be made by improving the structure.

The Program of Action 2015 details Germany’s strategy for fulfilling its pledge to the Millennium Development Goals.

Contribution to the Millennium Development Goals (MDG’s)

The Program of Action 2015 details Germany’s strategy for fulfilling its pledge to the Millennium Development Goals. Adopted by the German Cabinet in April 2001, the program
establishes poverty reduction as the overarching objective of German development policy.

In 2008 the German Development Ministry published a White Book on development policy that strongly confirms the commitment to the Millennium Development Goals. Furthermore the new Development Minister Dirk Niebel who is in office since the general elections in September 2009 said in his inaugural speech that Germany will stand by the goals of the Millennium Declaration.

Germany’s record on aid
Aid quantity

German ODA (Official Development Assistance) represented 0.38% of GNI (Gross National Income) in 2008. Germany’s ratio of ODA to GNI lags behind the average country effort of DAC-EU countries (0.42%).

As an EU-15 member, Germany committed to reach 0.7% of GNI by 2015, setting the interim targets of 0.51% by 2010. The OECD forecasts that Germany will need to increase its net ODA by 3.78 billion USD above 2008 levels to be able to reach 0.51% of GNI in 2010. Germany has not yet established a timetable detailing how it plans to meet its 2010 target.

Germany provided $13.91 billion USD in net ODA in 2008, making it the second largest donor by net volume (following the US). Debt relief grants (form of debt reorganisation which relieves the overall burden of debt) comprised 23.3% of German ODA in 2007 and 18.7% in 2008.

The DAC Peer Review recommends to adopt an ODA growth implementation plan addressing both resourcing and spending.

Aid quantity

Germany’s share of bilateral aid (in this case, the aid given by Germany to a developing country) was 65% in 2007. The focus of this bilateral assistance is on middle-income countries.

Germany should alter this distribution to allocate the majority of its ODA to lower-income countries, where it is most needed. The BMZ has been allocating increasing shares of its bilateral ODA to Africa. By region, Sub-Saharan Africa received the greatest percentage of German bilateral ODA (30.7%), followed by the Middle East and North Africa (22.8%). By country, top recipients of gross bilateral ODA in 2006-07 were Iraq and Nigeria.

Country programmable aid (CPA) is the proportion of aid that developing countries can allocate according to their development needs. CPA represented only 30% of German gross ODA in 2005. Germany’s share of CPA was below the average of all OECD countries (47%).

Education remains the most important sector, receiving 20% of ODA, mainly in the form of imputed student costs. This type of aid does not contribute to developing a country nor to strengthening its education system; for this reason, it is excluded from the calculations of country programmable aid.

In 2007, 93.4% of German aid was untied (tied aid is assistance given to developing countries which must be used to purchase goods and services from the donor country).

In 2006 and 2008, The OECD/DAC conducted a Survey on Monitoring the Paris Declaration to gauge the progress of donor nations toward improving aid effectiveness. The report finds that between 2005 and 2007, Germany made positive gains on most indictors of aid effectiveness (transparency and accountability of funding mechanisms, coordinated technical
assistance, predictability of aid- precise time tables on aid delivery, harmonisation of donor procedures, number and extent of joint missions) but its overall performance on several measures remains far below the 2010 targets.

During the German EU-Presidency, Germany pushed for progress on the division of labour in development cooperation. Under its leadership, the Council of the European Union adopted conclusions on the division of labour, which culminated in the May 2007 EU Code of Conduct on Complementarity and Division of Labour in Development Policy.

Policy coherence

Improved policy coherence for development has become an increasing priority for the BMZ and the administration as a whole since 2004 and is a central element of German national policies.

The OECD DAC recommends that the BMZ work towards a clearer and more operational policy statement on coherence for development.

Germany’s record on Trade

Policy coherence for Development does not refer just to aid policies: coherence of trade policies with development is key to help create livelihoods in poor countries.

As an EU Member State, Germany implements the Common Agricultural Policy (CAP), providing subsidies and price controls on agricultural commodities. Despite gradual reforms,
the CAP continues to distort the market for a wide range of products of critical importance to developing countries, such as cotton, dairy products, rice, fruits and vegetables, etc.

Germany has recently taken some steps backward in other areas of agricultural policies:

In April 2009, German Agriculture Minister Ilse Aigner called for a “temporary suspension” of the obligation to report on the recipients of CAP funds and the amounts received, as required by the Commission. This marks a serious challenge to transparency and the Commission recently began infringement proceedings against Germany.

In March 2009, Germany responded to a fall in milk prices by calling on the EU to postpone the increases in milk quotas agreed to under a 2008 resolution on the CAP Health Check. In May 2009, Germany joined with France and Austria to successfully push the EU to increase export refunds for butter and skim and whole milk powder.

Public Opinion

A 2009 Eurobarometer survey shows the number of people responsive to the MDG’s in Germany asked EU citizens “Have you ever heard or read about the Millennium Development
Goals?” The vast majority of German respondents (74%) were uninformed about the Millennium Development Goals this is a slight improvement compared to 2007 (78%). The results for Germany aligned closely with those of the combined EU27.

In recognition of the importance of public awareness, in 2005 the BMZ significantly strengthened the budget for development education and information; about 60% of this budget is used to support development education projects by NGOs.

The main OECD-DAC recommendation with regards to public opinion is to build broad-based support for development within government and civil society to meet international commitments; also improve communications to inform the German public on development initiatives, approaches to implementation, and outcomes.

Commitment to Development Index

The Centre for Global Development (CGD) ranks 22 of the world’s richest countries based on their dedication to policies that benefit poor nations. CGD’s Commitment to Development Index looks at seven policy areas important to developing countries: aid, trade, investment, migration, environment, security and technology.

CGD’s 2009 Commitment to Development Index ranks Germany 12thamong twenty-two OECD countries. This score represents a fall in the rankings since 2006, when Germany was ranked 6th among 21 countries.

Germany’s overall score is brought down by its low level of aid as a share of national income (0.26%) and by poor participation in international peacekeeping efforts.

On the positive side, Germany carries out environmental policies favourable to developing countries, accepts a large inflow of immigrants from poor countries, and promotes healthy investment in developing countries.

Updated: November 2009
For a more in-depth analysis and list of sources, please refer to the long version of the What About.