DEVELOPMENT

Commitment: "We renew our commitment to secure substantial flows of official aid and to improve the quality of this aid. The whole international community should be mobilized in this effort and new donors should assume growing responsibility, so that the burden is more equally shared".

Overall Grade: 0

Breakdown and Assessment:

1) "to secure substantial flows of aid": (note that "bilateral development cooperation", also referred to in the German context as "financial cooperation" (FC) or "capital assistance", is, in terms of volume, the most important instrument of development cooperation. Funds are mainly provided in the form of concessional loans. Since 1978, they have been made available to the least developed countries (LDCs) as non-repayable grants (financial contributions).

• 1996/97 - net ODA: DM 8.145 billion
  
• 1997/98 - net ODA: DM 7.8 billion
  
• result: 1.2% decrease in real terms

Grade: -1

2) "to improve the quality of this aid":

• although the Ministry for Economic Cooperation and Development (under the direction of Minister Carl-Dieter Spranger) cut their 1997 development budget by 1.2% from the year before, these cuts fell in line with overall cuts in the Federal Government's aggregate budget
  
• the development ministry's budget continues to comprise 1.8% of total federal spending
  
• Minister Spranger will, however, be able to enter new commitments for 1998/1999 due to the 1997 draft budget forecast of DM 3.965 billion in commitment authorizations establishing "the framework for new undertakings" for Financial and Technical Cooperation
  
• key priorities for Germany's aid program include poverty alleviation, environmental and resource protection, and education and training; measures in these priority areas are most suited to the ideal of sustainable development which describes economic, social and ecological development as an indivisible unit
• priority aid allocations for 1997 include:
  
  a) DM 710 million channelled to the Middle East in support of the peace process
  b) DM 360 million towards Eastern Europe and the Former Soviet Republics
  c) DM 261.5 million allocated to LDC sustainable development
  d) DM 1.44 billion in technical cooperation (up from DM 1.4 billion in 1996)
  e) DM 968.5 million allocated for financial and technical cooperation in Sub-Saharan Africa
  

* note that despite the overall reduction in the development budget for 1997, it was possible to increase the share of funding earmarked for the world's poorer nations from 64.8 % of the ministry's total budget in 1996 to 66.5% in 1997

Grade: +1

3) "to mobilize the whole international community...in this effort to increase the quality and quantity of aid":

• the Federal Republic reaffirmed in a 1997 Foreign Policy statement that the industrial nations "must meet their responsibility to create global economic conditions which also give the developing countries a fair chance"; in this respect, industrial countries must particularly "open their markets"
  
• furthermore, in elaborating national policies, the industrial nations "must give more attention to their impact on developing countries and increase their assistance in terms of both quality and quantity for the poorer developing countries in particular
  

Grade: +1

4) "new donors should assume growing responsibility" for the aid burden:

• no policy statements made in this regard Grade: -1