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Development Aid

Development aid: the 0.7 percent lie

German Development Minister Dirk Niebel is little concerned about cuts to his ministry's budget. Does that undermine his credibility?

Dirk Niebel's policies are controversial. In a way, things haven't gone smoothly for the German development minister since he took the job.

Before he took over at the helm of the German Development Ministry in October 2009, his own party - the pro-business Liberal Free Democrats (FDP), junior partners in Chancellor Merkel's governing coalition - had called for the ministry to be dissolved and incorporated into other ministries. But when the post was given to the FDP to fill, suddenly there was no more talk of axing the department.

Last week, Niebel was outraged over cuts to his ministry's budget for 2013. But when the opposition Green Party tried to initiate a reverse of the cuts, he voted against that - essentially against his own earlier demands.

UN millennium goals unrealistic?

Dirk Niebel (photo: Tim Brakemeier /dpa)

Niebel became minister of a ministry his party wanted to dissolve

But in the last few days, Niebel has grown tired of pretending. He has described the government's promise to allocate 0.7 percent of gross national product (GNP) to development aid as unrealistic and a lie. In a newspaper interview with the daily Rheinische Post, he said that if there were not enough parliamentarians who would back the plan then there was no point in pretending to stick to the UN millennium goals.

A number of industrialized countries have promised to invest 0.7 percent of GNP for development aid, a target set by the United Nations as part of their millennium goals in 2000. According to the UN's vision, there are three years left to realize those goals.

Officially, German Chancellor Angela Merkel has always expressed her commitment to the 0.7 percent goal. But in fact, Germany contributes only around 0.4 percent of GNP. Since the end of the 1990s there's been a slight trend upwards, but the 2013 budget brought an end to that.

Initially, the draft budget had planned an increase, but parliamentarians in last week's decision voted against it. In the end, Niebel's ministry will have 6.3 billion euros ($8.2 billion) - 87 million euros less than in 2012.

Dr. Peter Wolff (photo: Deutsches Institut für Entwicklungspolitik)

It's about the will to pay, not the ability, says Wolff

Other countries doing better

"This is a poor showing for Germany," said Tobias Hauschild of the NGO Oxfam. "Other countries, like Sweden or the Netherlands, have shown for years that it can work." He added that the United Kingdom is also well on the way to reaching the millennium target.

"The question is not whether we are able to provide this aid, but whether we are willing," said Peter Wolff, an economist with the German Development Institute (DIE). Wolff told DW that in light of the financial crisis, the German government has shifted its priorities.

But it's not only the money from Niebel's ministry that reflects Germany's development aid. Climate protection efforts, for instance, are being funded by other ministries as well - one example being the financing of the World Climate Conference, currently under way in Doha.

Yet developing nations like to keep climate projects and development aid apart, in the hope that they will be able to attract more aid money to their countries.

Alternatives to state aid

Girls school in Afghanistan (photo: DW/H. Hashemi)

Aid for education and health programs is unlikely to come from private companies

The question of how much money, whether more or less, Germany intends to spend on development aid seems to matter less to Niebel than one would think. In the interview with the Rheinische Post, the minister said the work of his ministry would not be affected by the cuts - perhaps because he's confident about additional funding from private donors. Just last week, Niebel stressed the importance of cooperation with private companies for his ministry. The numbers seem to back up his position.

"Last year, government aid coming from OECD countries was around $120 billion," said Wolff. "Compared to that there are direct investments from private companies of around $500-600 billion." In addition, there are the money transfers from emigrants back to their home countries, as well as the trade in raw materials. Countries such as Malaysia and Tanzania have successfully managed to become financially independent using this method.

So, does this mean private investors are the solution? Oxfam's Hauschild doesn't really think so. "That way we absolve ourselves from the responsibility," he criticized, adding that companies invest mostly for their own profit, in Asia and a few countries in Africa. Other countries, however, are less interesting to private investors companies. "For health and education aid, there has to be development aid from governments and states."

DW.DE