Chancellor Angela Merkel has called for the governments of developing nations to take more responsibility in fighting poverty.
The chancellor also said that developed nations should attach tighter conditions to the money they lend and argued in favor of linking the amount to results already achieved.
She said that countries should not rely indefinitely on handouts and had to take charge of their own development. She added social progress was "unthinkable" without good governance and human rights.
"There is one thing we have to accept," said Merkel. "The primary responsibility for development lies with the governments of the developing countries. It is in their hands whether aid can be effective. Therefore, support for good governance is as important as aid itself."
Merkel made her comments at the UN General Assembly's special session on the Millennium Development Goals (MDGs) in New York on Tuesday, an event attended by some 140 heads of state or government. They are reviewing the progress of the MDGs agreed 10 years ago to cut poverty, and improve gender quality, health and education.
Aid should be used more effectively
Firm conditions to ensure that money was spent in an effective way should be applied, according to the chancellor.
"Development aid cannot continue indefinitely. The task is to use limited resources as effectively as possible."
"We have to put results-based development aid at center stage," Merkel said. "It should just only be about money but also about what comes of that money."
The chancellor added lasting progress on development would require the world to successfully address challenges in four fields - peace and security, poverty reduction, environmental protection and promotion of human rights and good governance.
Germany is the third biggest contributor to the UN budget and it is one of the largest development aid donors.
Potential for German seat on the Security Council
The chancellor is keen for Germany to become a non-permanent member of the influential UN Security Council. She claimed on Tuesday that she had received "a lot of support and encouragment" for Germany's bid.
A seat on the UN's peacekeeping council would allow Germany to "present its views more strongly." The new non-permanent members will be elected by the General Assemby in October.
However, the aid organization Oxfam expressed disappointment in Merkel's speech.
"We expected much more from the German contribution," Oxfam spokeswoman Emma Seery commented after the speech. "Germany did not say how it will keep its promises to help poorer countries."
Helping women help themselves
Many experts are concerned that a number of the MDGs on poverty are unlikely to be achieved by the 2015 deadline. Several speakers at the meeting said the goals would not be achieved unless more is done to improve the lives of poor women.
Liberian president Ellen Johnson-Sirleaf, Africa's first female head of state, called for more investment in sectors that help women, including agriculture and small businesses.
"As we renew our resolve in the year 2010, we must recognize the need for inclusive economic growth," she said.
The president of the European Commission, Jose Manuel Barroso, announced that 1 billion euros (1.3 billion dollars) would be given to help Africa, the Caribbean and Pacific countries lagging behind their MDGs.
Barroso urged other donors not to use the economic crisis as an excuse to shirk their responsibilities to the poor.
"The international community still has a long way to go before the millennium goals are reached," he said.
Author: Richard Connor, Joanna Impey (dpa/AFP/Reuters)
Editor: Susan Houlton