Focusing on global processes – German development cooperation

Development Policy07 Oct 2009Hannelore Börgel

For many years Germany has focused on providing technical assistance and bringing peace and security to many developing and newly independent states. It now wishes to play a more significant role in European and multilateral institutions.

The young Federal Republic of Germany made its first donation to a United Nations development programme in 1952. The trauma of war and reconstruction, the reintegration of millions of refugees, and the country’s reliance on Marshall Fund aid had all helped to sensitize politicians to the plight of developing countries. The German parliament introduced an active North–South policy, with support in the form of technical aid, vocational training and further education, as well as programmes to build cultural and social relationships between Germany and the developing world.


InWEnt, or Capacity Building International, supports human resources development, training and dialogue. Created in 2002 by the merger of the Carl Duisberg Society and the German Foundation for International Development, and with an annual budget of about €137 million (2008), InWent employs 850 staff at more than 30 locations worldwide. The main shareholder is the government, represented by BMZ, which is also InWEnt’s main client.

Each year, InWEnt’s training and dialogue programmes attract 55,000 participants, including sector specialists, junior managers and decision makers from industry, government and civil society. InWent’s Development Policy Forum contributes to informal policy dialogue on topical issues.

For the generation of West Germans who began their professional lives in the 1960s and 1970s, development aid and working in the ‘Third World’ were an opportunity to show that there was a Germany very different from Nazi Germany, which had left Europe devastated. In 1956, the parliament included 50 million marks (about €25 million) in the budget of the Federal Foreign Office for ‘supporting activities for underdeveloped countries’. Five years later, the republic created the federal Ministry for Economic Cooperation and Development (BMZ).

From the start, the new ministry had to struggle for autonomy. Development policy is a cross-sectoral task and thus will always attract the suspicion and interference of other ministries. Until 1972, the Ministry of Economics coordinated all bilateral and multilateral financial cooperation, and handed over to BMZ responsibility for Germany’s involvement with the European Union only in 1998. Since the late 1980s, German development cooperation has focused not only on the southern hemisphere, but has also included technical aid for eastern Europe and the newly independent states of the former Soviet Union, which had previously been the responsibility of the Ministry of Economics.

The Cold War and beyond

Between 1961 and 1989, development policy was greatly influenced by the Cold War. Germany was not alone in more or less neglecting newly independent Third World countries that sympathized with communism. The social–liberal coalition headed by Willy Brandt (1968–74) emphasized the interests of the developing countries and long-term country programmes, but this was followed by a phase of pragmatism (1974–1982). The UN had called for a ‘new economic world order’, but in the wake of the oil price crisis in 1973, the economic interests of the industrialized countries became more important again. Marie Schlei, the first female minister to head the BMZ (1976–1978) strengthened Germany’s engagement with Africa. She spoke with liberation movements in southern Africa, and also supported stronger roles for women in the development process.

The prospects for developing countries worsened in the 1980s as many governments, including Germany’s conservative–liberal coalition, redefined the role of the state as being subordinate to market forces, in line with the policies promoted by the International Monetary Fund (IMF) and World Bank. Many of those responsible for implementing policy were critical of this shift, pointing at the successful ‘social market economy’ of postwar Germany, to give clues for the path that developing countries could take. Nevertheless, the neoliberal approach continued to dominate development policy. At the same time, the bilateral programmes of European donor countries sometimes functioned as a buffer against the collateral damage caused by the international organizations, which rigidly guided the financial policies of developing countries. While at the macro level the economies of many countries may have improved, the daily lives of most of their citizens did not, requiring bilateral donors and NGOs to assume responsibility for meeting their basic needs.

In the mid-1980s, Germany introduced the idea of policy dialogue, the aim of which was, and still is, to influence the policies of developing countries and their elites, and to reach agreement with the government on a political, economic and social framework. Although the volume and content of development assistance still depend on the outcome of such policy dialogues, in practice they are also influenced by the partner country’s strategic importance.

Following the fall of the Berlin Wall, the end of the Cold War and German reunification had a strong impact on development policy. Projects that had been supported by the former East Germany (German Democratic Republic) were completed, some were integrated. Former Soviet republics in Central Asia were integrated into Germany’s development programmes. Some of these newly independent states, such as Tajikistan and Kyrgyzstan, were close to collapse, requiring emergency aid – later called development-oriented emergency aid – to provide their citizens with food and other basic needs. Germany assigned a special budget to this.

The broadening of Germany’s development programmes to include the former Soviet states inevitably affected its involvement in Africa. Some African countries that had been considered close allies of the West during the Cold War suddenly lost their strategic importance. African elites came to be seen in a more critical light and corruption was more openly addressed than it had been before.

As civil wars erupted in several former Soviet republics, including Tajikistan, it became obvious that development and security could no longer be separated. In 1993, the German chapter of the Society for International Development (SID) and the German parliament jointly organized a conference on development and security for European parliamentarians. A year later, ‘human security’ was chosen as the theme of the UNDP’s Human Development Report, and it also became the guideline for German development policy.

21st century aid

ANP / Andreas Altwein Joschka Fischer, former foreign minister and leader of Die Grünen. Germany’s involvement in the war on terror caused heated debates about the relationship between development and military intervention.

Partly in response to the terrorist attacks of 11 September 2001, the role of development in the early 21st century has changed. In Germany, development policy is now understood to mean global structural and peace policy as well. The coherence of foreign, trade, security and development policies is regarded as essential to achieve sustainable global development – the key term being ‘sustainability’. Thus, according to the BMZ, development policy should help resolve crises and conflicts in a peaceful manner. It aims to help ensure that scarce resources are more equitably shared, and to protect the environment for future generations. In its efforts to help reduce global poverty, Germany is also a strong supporter of the UN Millennium Development Goals.

In June 2008, the government published its first white paper, Auf dem Weg in die Eine Welt (Towards One World). It describes the four main principles that currently guide its development cooperation – to reduce poverty worldwide, protect the natural environment, build peace and democracy, and promote equitable forms of globalization – as well as strategies for implementation.

Country strategy papers are the key management instruments of the BMZ and form the basis for medium-term cooperation, while sector strategy papers give guidelines for implementation. The framework and guidelines are provided by the national Poverty Reduction Strategy Papers drawn up by the partner countries, and by the agreed priority areas of bilateral cooperation. German bilateral cooperation focuses on a few priority areas so as to ensure the effective and efficient use of development funds.

Germany today provides bilateral assistance to some 60 developing countries, down from 120 in 1998. Other countries will also receive assistance as part of regional programmes or projects dealing with specific sectors (such as HIV/AIDS, climate change, forest protection and crisis prevention), or through Germany’s contributions to the programmes of the European Union and multilateral organizations. The cut in the number of countries receiving support is in line with the Paris Agenda on Aid Effectiveness and the recommendations of the OECD/DAC peer review of Germany. Africa will remain the main recipient of German development cooperation.


How to achieve policy coherence has been the subject of many recent discussions between the BMZ and various federal ministries, including those of economics, finance, agriculture and the environment, and the Foreign Office. To inform these discussions, the German Development Institute (DIE/GDI) conducted a study of policy coherence for development from a more general perspective, based on an analysis of international experiences. The report concluded that policy coherence is a complex management task in light of the current limitations of development policy, such as its limited influence on other policies, as well as its small budget.

Reuters/ Roberto Jayme Chancellor Angela Merkel and Brazil’s President Luiz Inácio Lula da Silva after signing a strategic partnership agreement in May 2008.

Compared with other donor countries, however, Germany’s efforts to improve coherence have yielded some positive results, according to the OECD’s Development Assistance Committee (DAC) in its recent peer review. The review found several favourable conditions for this, including the government’s official acknowledgement of the need for policy coherence, the existence of an independent ministry (BMZ) with a cabinet level minister, and practical experiences in achieving coherence at various levels. These conditions could be used to improve coherence even further.

German development policy aims to help shape globalization in such a way that it meets the social, environmental and human needs of all peoples. Today, much more than in the past, the development opportunities available to countries in the South are influenced by climate change, international financial markets, technological progress, as well as international institutions. Germany therefore supports the new global partnership between industrialized and developing countries, which advocates strengthening the influence of the developing countries within international bodies such as the World Bank and International Monetary Fund, and promotes fair working conditions and the introduction of International Labour Organization norms worldwide. Since such a global partnership necessarily requires the inclusion of civil society and the private sector, Germany also supports the UN’s Global Compact, a worldwide alliance of businesses committed to improving human rights, labour and the environment and combating corruption.

The fact that influencing global processes has become more important in official German development policy than the implementation of projects and programmes has led to intense debate. Supporting this trend are the various think tanks, led by the German Development Institute (DIE/GDI; see box). On the other side, experienced practitioners and analysts believe that development will only have an impact when all ‘target groups’ – down to the village level – play an active part in the process. They argue that such bottom-up approaches cannot be left to the sole responsibility of NGOs or emergency aid, but require official support. The ‘global process’ defenders currently have the lead in the debate, and in recent panel discussions they have dismissed, or sometimes even mocked, those with opposing views.

Development or security?

The aim of all German involvement in developing countries is to achieve societal and institutional change. In a 2007 strategy paper, Development-Oriented Transformation in Conditions of Fragile Statehood and Poor Government Performance, the BMZ outlined a range of approaches that can be used in dealing with difficult governance situations. Germany assists its partner countries to address the structural causes of conflicts and to adopt measures to prevent their escalation to full-blown crises at an early stage. It supports both governments and civil society actors in non-violent means of conflict management, with comprehensive programmes to ensure the participation of a wide range of social groups.

Through the Civil Peace Service, established in 1999, Germany provides specially trained experts who work together with local organizations and initiatives to mediate in conflicts, and to raise public awareness of the concerns of disadvantaged groups. They are also involved in the rehabilitation of former combatants , helping them to return to civilian life, working with traumatized victims of violence, and assisting refugees to return to their homes.

Germany’s involvement in Afghanistan in the aftermath of 9/11 has given rise to heated debates about the relationship between development and military intervention. Contradictory official statements have contributed to blurred public perceptions about the role of the army. During the early stages of engagement, the role of the army was described as similar to that of a civilian reconstruction team in uniform. German development experts and NGOs kept their distance. The north of Afghanistan, which is assigned to the responsibility of the German army, was described as more or less peaceful, and German troops were said to have a good reputation among the local population. But this situation has changed, especially in Kunduz province, where the army is fighting the Taliban. In the meantime, in the more peaceful northern provinces, Afghans are enjoying the first results of the reconstruction work. Economic activities, trading and transportation have improved, but many are afraid that the Taliban may return. Among the German public a more realistic view of the possibilities of development cooperation in areas of conflict and crisis has slowly taken root. Die Linken (the Left) is the only party that insists on the immediate removal of German forces from Afghanistan.

As in other countries, the German media have tended to report spectacular events such as suicide bombings, rather than the successes of reconstruction. They have ignored, for example, the success of the Afghan National Solidarity Programme in taking the first steps towards establishing bottom-up processes such as development councils at district and village levels. There have been very few reports of the provincial and district development funds, financed by German aid, or the fact that Afghans and Germans are working side by side to decide how to apply them. It is only recently that the German public has started to realize that it is impossible to eradicate the consequences of almost 30 years of war in Afghanistan in just five years.

Rural development

Rural development only recently returned to the limelight of German development policy. After dominating development policy, especially in Africa, until the mid-1980s, it was superseded by environmental and trade concerns. National and international discussions on institutional reform and good governance attracted far more attention. The influence of rural development, which was supported by experienced German development experts, eventually shrank. Their expertise and the institutional knowledge were more or less lost, or retained only in units within universities, development agencies and NGOs. Only in early 2008, when rising prices and food shortages in some areas of the world became obvious, did rural development again become an issue at government level.


The Gender Plan of Action 2009–2012 promotes a dual approach, combining gender mainstreaming and special support programmes for women. Some of these programmes also actively involve men. It has taken German policy makers over 20 years to understand that the causes of conflicts and domestic violence need to be addressed in order to resolve them. Economic support programmes and microcredit schemes sometimes function well only if they also include men. The Gender Plan of Action is accompanied by political and sector-specific dialogues on equal rights.

Anchor states

Apart from its programmes in partner countries, German development cooperation also focuses on nine of the 15 so-called ‘anchor states’, each of which plays a key role in the political and economic stability of their region. These states are regarded as indispensable partners in addressing global challenges such as poverty reduction, climate change and environmental protection, peacekeeping, creating a just global economy and establishing democracy and good governance.

The cooperation with these anchor states focuses on three main areas: concentration in terms of content; building dialogue and expanding relations; and encouraging exchanges between researchers and business leaders in the partner countries, among the partner countries and with Germany. BMZ works directly with nine of the 15 anchor states: Brazil, China, Egypt, India, Indonesia, Pakistan, Mexico, Nigeria, South Africa – in order to steadily transform development cooperation into strategic partnerships. The development policy cooperation with anchor countries Thailand and Turkey will be phased out in the next few years. There is currently no bilateral development cooperation with the anchor countries Argentina, Iran, Russia and Saudi Arabia.

In May 2008, Chancellor Angela Merkel signed a strategic partnership agreement with Brazil, negotiated during the G8 summit in Heiligendamm in 2007. The ‘Heiligendamm process’ is one important step towards getting the leading anchor countries more closely involved in global structural policy. The five ‘outreach’ countries – Brazil, China, India, Mexico and South Africa – were invited to the G8 summit in Heiligendamm in 2007 under the German presidency. A high-level dialogue was agreed between these five anchor countries and the industrialized countries for two years initially. The issues on the agenda will include the protection of intellectual property, development cooperation with particular reference to Africa, and reducing carbon dioxide emissions.

As the financial strength of the anchor states improves, their contributions to development interventions under financial and technical cooperation agreements are gradually raised. The policy for anchor countries also includes helping them build up their own development cooperation structures. For instance, Germany is advising Mexico on setting up its own agency for development cooperation, and is extending environmental projects being carried out under the Mexican–German partnership to other Central American countries.

As well as BMZ, various other German ministries also implement programmes in the anchor states. Although in theory a lot could be gained from synergies between them, institutional rivalries often hamper such benefits in practice.

Institutional rifts

The implementation of German development policy has traditionally been split among a number of key institutions. The division between the agencies for technical cooperation (GTZ) and financial cooperation (KfW) is another German peculiarity. Through technical cooperation, Germany transfers technical, economic and organizational knowledge and skills to the partner countries, consisting mainly of advisory services, materials and equipment. There have been regular discussions and consultations about uniting GTZ and KfW, but the final decision is always postponed. In the partner countries, however, it is increasingly common that a ‘German house’ is established, which accommodates the offices of the different government development organizations. But the actual level of cooperation still depends largely on the individual staff of the different offices.

Discussions on integrating the BMZ into the Foreign Office also regularly surface, but things remain as they are. Often, the simple reason for this is that coalition governments need a number of ministries, and the BMZ and the Foreign Office are usually headed by ministers from different parties. When the discussions become really serious, NGOs and churches usually start publicizing their arguments as to why development policy needs to retain a ministry of its own.

The difficulty in coordinating the efforts of different ministries is perhaps most evident in Afghanistan, where four ministries are involved in reconstruction – BMZ, the Foreign Office, the Ministry of Defence and the Ministry of the Interior. They have all been ordered to support Afghanistan, but three ministries demand the leadership: BMZ, because it has the longest experience in development and reconstruction; Defence, because more than 4000 troops are deployed there; and the Foreign Office, because it is responsible for maintaining diplomatic relations. In 2009, parliament granted the Ministry of Defence €571 million, the Foreign Office €91 million, and BMZ €90 million for their operations in Afghanistan. The Foreign Office is now also involved in vocational training and health, which are actually among the core tasks of the BMZ.

Development actors

In addition to the wide range of state-funded organizations, many individual federal German states (Länder) are involved in development cooperation, as well as a large number of NGOs, faith-based organizations, political foundations and other private bodies. About 100 German NGOs are organized in an umbrella organization, the Verband Entwicklungspolitik Deutscher Nichtregierungsorganizationen (VENRO). The BMZ provides financial support for and exchanges views and experiences with these organizations. The NGOs are involved in formulating the BMZ’s country, regional and sector strategies and, through VENRO, in raising public awareness of development issues.

The foundations associated with the different political parties, another German peculiarity, are involved in projects to strengthen multi-party democracy, and to support civil society organizations and trade unions (see box). These foundations are not necessarily linked to specific parties in the partner countries, but they open up the circle of traditional actors in development cooperation. They often have a feeling for the development of political movements in their early stages, and thus contribute to the establishment and strengthening of democratic structures.

In addition to its bilateral assistance, Germany contributes to the development efforts of many European and multilateral institutions. Although for many years Germany has played a rather restrained role in these institutions, it now wishes to have more influence on the international stage. For decades, the German government – unlike those of France and the UK – has underestimated the importance of placing highly qualified personnel in key positions in international organizations. Clearly, this situation is set to change.


Unfortunately, due to the age of this contribution and several migrations to online content management systems, the footnotes in text may have been lost. The footnotes below are listed in its original order of appearance in text.

  1. The development policy of the Federal Republic of Germany (FDR) took a clear stand against the German Democratic Republic on the basis of the Hallstein doctrine (Hallstein-Doktrine) until 1973, when both states became members of the United Nations.
  2. Holtz, U. (2006) Abschied von der Gießkanne, Stationen aus 50 Jahren deutscher Entwicklungspolitik, in: Eins- Entwicklungspolitik- Information Nord-Süd, 23-24-2006, Frankfurt/Main.
  3. Practitioners argued that to improve the living situation for the majority, the state should be responsible for providing at least education, healthcare and infrastructure. A number of developing countries need a strong state for some time to pave the way for development before market forces can play a positive role. Market forces without benchmarks can produce disorder rather than progress, and deepen the gap between rich and poor.
  4. BMZ (2008) Auf dem Weg in die Eine Welt/Towards One World, development policy white paper.
  5. Ashoff, G. (2005) Der entwicklungspolitische Kohärenzanspruch: Begründung, Anerkennung und Wege zu seiner Umsetzung, German Development Institute, Studies 6.
  6. OECD-DAC (2005) Germany Peer Review, main findings and recommendations:
  7. UN Global Compact
  8. BMZ (2007) Development-Oriented Transformation in Conditions of Fragile Statehood and Poor Government Performance, BMZ Strategies 153. View PDF
  9. The Afghan National Solidarity Programme is a collaborative effort, launched in 2003, involving several governments and international organizations to rehabilitate and develop 5000 villages.
  10. BMZ (2009) Entwicklungspolitischer Gender-Aktionsplan 2009–
  11. In the 2008 national budget, €730 million went to TC in the strict sense, and €286 million to TC in the broad sense. Small-scale measures can be financed through the Technical Cooperation Study and Expert Fund. German consulates and embassies in developing countries can be contracted to handle micro-development projects. TC in the strict sense refers to the volume and substance of TC negotiated and officially agreed between the governments of Germany and the partner country. The German government then contracts GTZ to implement projects. In individual cases, the German government or its specialist agencies can also provide inputs directly. TC in the broad sense: in addition to ODA, the German government also promotes measures implemented by private bodies, such as NGOs, political foundations or faith-based organizations, for which they are responsible. These measures are not covered by government negotiations.