Germany Needs to Get Aid Priorities Right, Expert Says | Germany| News and in-depth reporting from Berlin and beyond | DW | 21.10.2008
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Germany Needs to Get Aid Priorities Right, Expert Says

Should Germany continue to send millions in development aid to booming emerging economies like India or divert it to more needy nations in Africa? DW-WORLD.DE spoke to a liberal politician about aid reflecting reality.

A young boy in Nigeria writes on a blackboard

Koenigshaus says financially helping nations that can't help themselves is money well spent

Leading politicians from Germany's opposition liberal Free Democratic Party (FDP) last year called for an end to a 68-million-euro ($90.4 million) development aid package to China, citing the country's rocketing economic growth rates and surging exports. Last year, German Chancellor Angela Merkel too called into question German aid to India.

As German Development Minister Heidemarie Wieczorek-Zeul celebrates 50 years of Indo-German development aid cooperation this week in India, DW-WORLD.DE spoke to Hellmut Koenigshaus, FDP development aid policy spokesman, about whether Germany's policy of financially supporting booming emerging economies is still relevant.

DW-WORLD.DE: Your party favored scrapping German financial aid for China because of the country's strong economic growth. Last year, German aid to India, another booming Asian giant, amounted to more than 300 million euros. Do you think that help is justified?

Hellmut Koenigshaus: The FDP has long demanded a new approach towards emerging economies in the field of international development aid. We believe that countries such as China, India, Brazil and others which have strong economic growth and huge foreign reserves, no longer need financial aid.

Hellmut Koenigshaus, development aid policy spokesman of the FDP

Koenigshaus has called for a shift in Germany's aid priorities

India has long been treated as an equal partner in the West. There are some in the development aid community who just haven't realized that. If you speak with business representatives about future markets and opportunities, you realize that India, China and Brazil are no different than older industrialized nations. And that's why it doesn't make sense to pretend that all these economic developments haven't taken place.

Does that mean you're in favor of cutting all aid to India and other emerging economies?

No, not at all. What we're saying is that thanks to its robust economic growth, India is in a position to finance its own anti-poverty projects.

We have to realize that India can fund its own social and development initiatives on the global financial markets. It's one of the strongest and most creditworthy countries. India has also emerged as a strong nation, particularly in the context of the escalating financial crisis, because unlike other countries which are now staring at a mountain of debts, India has enough cash reserves.

IT Park Whitefield in Bangalore, India

India's IT industry is one of the country's best-known economic success stories

What we need to do instead is to provide help to India and other emerging economies in areas where they can't help themselves. In China, that means above all helping the country build a functioning judicial system and promoting legal reform. These are things that already exist in India. India is highly developed in many areas. But India still needs help in the field of technological know-how and cooperation. That's where we should be concentrating our efforts.

Much of Germany's current development aid cooperation with India focuses on energy, environment and economic and structural reform. Are those the right priorities?

Yes. As western donors, we don't want to be cleverer than India and the Indians who bear the responsibility of developing their country. But we have to realize that there can be no development without energy and infrastructure. That's why the focus on the environment, which is particularly at risk in India, is important. Often development takes place at the cost of the environment -- we've seen that happen in China. Sometimes, you can achieve some short-term success in battling poverty but at the same time you're laying the foundation for future problems which in turn lead to new poverty traps and environmental woes. That's why it's absolutely important for western donors to contribute their own knowledge and experience to help rising countries such as India to avoid the mistakes and flawed policies that industrialized nations made in the past.

Despite its dazzling economic rise, India is still home to the world's largest number of poor people.

A family in a shanty town in Chennai, southern India

India still has huge levels of poverty and malnourishment

Undoubtedly. We are not suggesting rolling back aid to India to save money. We want to do more, not less, to implement the UN's Millennium Development Goals. What we are suggesting instead is that we make our development aid more effective by concentrating on the really needy countries. If we keep pumping in funds into countries like India, we're not being fair towards nations in Africa and elsewhere that don't have a similarly strong financial foundation and global clout and which obviously get a smaller slice of the foreign aid pie as a result. We've already made a start by reducing the number of countries we help financially to 60. And fortunately, the German government has ended its aid for China. That's the direction we should be headed in with all other emerging countries which reach the same level of economic development as in China.

At the same time, it's important that countries such as India and China, which have profited from foreign development aid themselves, work together with industrialized nations to help Africa. India, in particular, has specific experience with rural development and irrigation projects financed by western donors. It can use this knowledge to help Africa.

Much like China, India too has increasingly strong business ties to Africa. As an "emerging donor," India is also extending its own development aid to Africa. Is that another reason for you to call for a rethink of Germany's development aid to emerging countries?

A Chinese businessman with Nigerian laborers in Lagos

China's involvement in Africa has been met with suspicion in the West

Yes. It's true that India is increasingly a development aid donor itself. It's a fact which I appreciate. At the same time, it doesn't make any sense to give financial help to China which is involved financially and technologically in Africa. We might as well give the money directly to Africa ourselves. The same applies to India.

How has India's landmark civilian nuclear deal with the US, which remains controversial in your party, affected aid considerations?

As far as the nuclear deal goes, I personally consider it a mistake because India has neither signed up to nuclear non-proliferation treaties nor has it agreed to stick to the control mechanisms to monitor all its sites. I'm not saying we should completely scratch development aid to India in the wake of the nuclear deal but I think it once more underlines that India is in a moral dilemma. On the one hand, India has a lot of money for certain technological developments and they're using it the way they want. But it can't be that India develops its nuclear capability, space projects and at the same time leaves the fight against poverty within its own borders to the western donor community. We have to tell India as a responsible and respected member of the international community that we need to shift the foundation of our relationship i.e. technological cooperation as far as it's needed within India and in particularly combined Indian and Western support outside --especially in Africa.

Many aid groups fear a slump in Germany's development aid as a result of the global financial crisis. Do you agree?

At the moment, we expect to be facing several financial burdens which will probably lead to lower tax revenues. Due to the crisis, government spending on a variety of things is likely to increase. All that could lead to changes in the budget. In the past, we've always said that budgetary shortfalls should not affect development aid. I think that will still be the case. At the same time, you can't rule out a worsening of the situation. If the economy shrinks, it's possible it could affect Germany's development aid. We can't say that we're going to cut pensions in Germany so that we can meet our foreign aid goals. But I don't believe that the situation is that dramatic.

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