volume, channels and distribution of aid: an imperative for Germany to get back into the track to honor its commitments on aid volumes
In 2009, Germany ranked third in the world by the volume of its bilateral aid, behind the United States and France and just ahead of the United Kingdom and Japan.
This year, its ODA amounted to USD 12 billion, 10% of total ODA from DAC member countries. While Germany has maintained its place in the forefront of the contributors of ODA, however it has not increased as much as she had promised the hand of its gross national income (GNI) devoted for help, she had pledged to increase 0.51% for 2010 and 0.7% for 2015. In 2009, ODA has indeed shown that 0.35% of GNI, which does not at all Germany in a good position to honor the first of these commitments.
Despite these recent developments and adverse challenges ahead, the authorities remain committed to the goal of 0.7% for 2015. The budget for development cooperation is based on the annual budget of the Federation and a rolling plan funding over a period of five years (the current year and next four). The achievement of the target volume of aid for 2015 is therefore a major challenge, which must be addressed immediately: it is so that appropriate arrangements can be provided in the financing plan for the period 2011-2015 and the 2012 budget itself, which will both be developed in the first half of 2011.
regards the areas where it is intensifying its efforts for development cooperation, Germany must ensure that the increased attention it lends to private sector development will lead to the misuse of ODA to fund aid activities that would be dictated by its own commercial interests. This involves finding ways to ensure that the criteria for selecting projects relate well to the expected benefits in terms of development and not the commercial interests of Germany.
In addition, when using loans as part of its development cooperation, Germany must ensure that they meet all the criteria for ODA - that have the development objective, be combined with concessionary and submit a grant element of at least 25% (based on a discount rate of 10%) - and assess the potential consequences on future repayments objectives for the net volume of ODA.
BMZ remains the custodian of a little over half of German ODA, net passing across a range of other departments, agencies and public institutions, making it difficult to apply consistent policy of cooperation for development. It is essential to strengthen and improve coordination of German ODA, at headquarters and in the field, and to ensure that strategies in priority areas, guidelines and stratégiespays serve as a guideline for activities of all departments, agencies and institutions and that they feel involved there.
Broadening the space for partner countries, particularly sub-Saharan Africa
we have seen, Germany has sought to refocus its development cooperation on a smaller number of countries. The number of partner countries has been reduced from 84 to 57 since the last peer review, what can only be welcomed, but these 57 partner countries received less than 40% of bilateral ODA by Germany in 2008 while the remaining 60% were divided among 83 countries that are not included in the list of partner countries. Moreover, still in 2008, of the 20 top recipients of German ODA, six were not included in the list of partner countries.
There seems to be considerable scope to strengthen the impact of German ODA, due primarily to increased contributions to the 57 current partner countries, starting with those with whom he remains the greatest way to go to achieve the MDGs, namely sub-Saharan Africa, the least developed countries and countries in conflict or fragility.
Africa region remains the first recipient of German aid, with 35% of bilateral ODA in 2008. Within the G7, Germany pledged in 2005 at Gleneagles to double aid to sub Saharan Africa for 2010 (compared to its level of 2004). Like the other G7 countries, Germany will not honor its commitments on time Gleneagles. As a member of the EU, Germany also agreed, in 2005, to be allocated to sub-Saharan Africa half of its additional contribution of ODA.
ODA Bilateral allocated by Germany to the area has certainly increased significantly (1.4 billion USD in 2004 to USD 2.7 billion in 2008), but this increase is far from representing a 50% increase experienced by the German bilateral ODA during the same period. Moreover the share of SSA in gross bilateral ODA from Germany has made little progress, 27% in 2004 to 29% in 2008.
Germany has renewed its promise to provide sub-Saharan Africa 50% of new allocations of bilateral ODA in 2009 and 2010, and informed the Committee that firm commitments had been made necessary. That said, it is clear from the recent survey on aid commitments of DAC bilateral ODA that German will continue to take the path above all middle-income countries. Implementation of the commitments of Gleneagles is undoubtedly important for poverty reduction in a key region of the world, and also to preserve the credibility of Germany as a major donor playing major role in the international system.
Replace debt relief from other forms of assistance
For several years, debt relief occupy an important place in German development cooperation. However, opportunities in this area are starting to run out, so that such operations will give way to other forms of aid, multilateral and bilateral, so that the volume of aid may increase or at least be maintained.
The reduction of debt relief is also the main reason for the decline in ODA German in 2009. Germany would therefore be well advised to plan the transition to other uses and channels of its aid.
Adopt a more strategic approach towards collaboration with NGOs
Germany carries 6% of its ODA through the channel of non-governmental organizations (NGOs), it is very committed to ensure independence. However, it should adopt a clear strategy for its engagement with these organizations, be they German or South.
Most NGOs have considerable freedom in the use of ODA resources entrusted to them, but the chain of responsibility that unites institutions managers of German cooperation for development is too loose . The German authorities must strike a balance between the desire to respect the autonomy of NGOs and the need to encourage them to be able to report results on the path of development and also to align with partner country priorities. It should find ways to improve the usefulness of consultations with NGOs on policies and strategies for development cooperation. One solution would be to have them start at an earlier stage of the process of policy development. Germany would therefore register an interest in its relations with NGOs in a strategic approach.
this in mind in particular should be put in place various mechanisms to regulate the flow of funds through NGOs, such as framework agreements at headquarters level and partner countries. Such an approach is important to ensure that attention remains focused on results.
Recommendations
To honor its commitments and maintain its credibility, Germany should:
(i) establish, in its draft budget for 2012, new annual targets are realistic and offer a plausible growth path for the realization in 2015 of the 0.7% of GNI
(ii) ensure that these new targets and the growth path rally the support of leaders politicians (of all stripes) and made widely available,
(iii) replace the relief debt by other means of cooperation for development is scarce as to erase the debt; focus more on bilateral ODA partner countries, starting with those located in sub-Saharan Africa and those in conflict or fragility ; strengthen its program for private sector so that it encourages foreign and domestic investment in areas consistent with the development strategies of partner countries, ensuring that it does not result in a diversion of ODA to finance activities that would be dictated by its own commercial interests ; And develop a strategic framework to govern the collaboration with NGOs, which outlines the reasons that make it a useful channel for the flow of funds, define the nature of relations with them, strengthens the partnership and provides a focus on results development.
