Reducing poverty

Dirk Niebel heads the Federal Ministry for Economic Cooperation and Development. A member of the Free Democratic Party (FDP), Niebel reflects on Germany's progress toward Millennium Development Goals and the government's current initiatives in the development arena.

DW: Germany is lobbying to house the Green Climate Fund (GCF) in Bonn. The fund will allocate a significant proportion of the money for climate financing, slated to rise to 100 billion dollars (76 billion euros) annually by 2020. What are you doing to promote Germany as a location?

Dirk Niebel: Germany is the world's second-largest donor on climate issues. We have a lot of experience and expertise in this area. The transitional office of the Green Climate Fund is already in Bonn. We've put together a package that includes access to the job market, immunity regulations, language courses and subsidies for travel expenses for delegates from impoverished countries. These measures are intended to make Germany an attractive home for the international organization.

Climate protection and adaptation are important elements of fighting poverty. The first Millennium Development Goal aims to cut the percentage of the world populace that suffers from extreme poverty and hunger in half. Where are we today, less than three years before that goal is supposed to be achieved?

When we look at the World Bank's statistics, we see that we've already made big progress toward cutting poverty in half, but that shouldn't make us complacent. I believe that economic growth in developing countries is essential to reducing poverty. That requires a corresponding framework. The legal structures need to be there for people to make investments. Equally important is the battle against corruption and providing security for investments, including those from abroad, so that jobs can be created and people can work their way out of poverty. On the other hand, states have to collect enough taxes to provide for basic needs like health care, infrastructure and education.

The OECD fears that Germany will not stick to its pledge to give 0.7 percent of national GDP to development aid by 2015. How safe is the development budget in the era of a global financial crisis?

From 2010 to 2012, we raised the budget each year for the Federal Ministry for Economic Cooperation and Development (BMZ). We've been doing our homework by making structural reforms that increased efficacy and efficiency in development organizations so that we can achieve better results with the funds we have.

We will get the official OECD numbers for last year's ODA quotient [Editor's note: Official development assistance (ODA) measures a country's provision of financial, technical and personnel costs spent for cooperation projects on development issues], and I am confident that we will have reached 0.4 percent despite just 3 percent economic growth.

German industry has just founded an alliance to secure raw materials, and the federal government wants to enter similar raw material partnerships with Kazakhstan and Mongolia. That sounds like the same old model: the South supplies raw materials to the industrialized North. Wouldn't the North have to become the marketplace for developing countries in order for real economic growth to take place?

That's exactly the point of raw material partnerships. I began supporting this initiative for a partnership with Mongolia in August 2010, which was then signed by the chancellor last year.

Of course the South remains the provider of raw materials because that's where the raw materials are. We want these partnerships to contribute to elevating the status of the people who live in countries where raw materials are located.

In Mongolia, the partnership is intended to generate more transparency when it comes to granting mining rights. Right now, these are treated like financial stocks, but that cannot be a state-supported goal. If a license is granted, then it should only be to mine raw materials so that corresponding income can be earned. We want to help create more transparency in the revenue streams here, which is a key prerequisite for fighting corruption. Together with partners from German industry, we want to implement participation in the value chains of countries where raw materials are located. Jobs let people escape poverty, and then the state can take in more tax revenue. At the same time, it offers taxpayers the chance to deduct machines and facilities that are necessary for this process.

So both sides benefit. A partnership on raw materials can only function fairly if a high percentage of the profits from mining and selling raw materials is used to improve conditions in their country of origin.

What role do human rights play when it comes to the effects of mining on people and the environment?

It's an explicit component of our raw-materials partnership that human rights as well as social and environmental standards will be maintained. As part of our partnership in Mongolia, we support Mongolian NGOs who fight to preserve these standards. In the course of our political dialogue with the government, we also make sure they will uphold these standards.

The goal is to create a socially and environmentally responsible mining system that allows a maximum number of people in the originating country to benefit.
Furthermore, increased tax revenue should also put the government in a position of greater independence from the fluctuations of raw material prices so it can invest in other sectors of the economy - for instance, in rural areas. That's very important in Mongolia.

This year, the global agenda will be dominated by the Rio + 20 conference. What issues is Germany going to push there?

We prepared for Rio + 20 last year with the Water Energy Food Nexus conference in Bonn. For the first time, the three areas of water, food security and energy supplies were considered not in isolation but in terms of their interdependency. At the Rio conference, we are going to have to discuss much more than we used to in terms of cyclical effects.

Rio cannot just be an environmental conference - it also has to be a conference on development. The two areas cannot be separated from one another. Environmental and development questions are so closely related in terms of people's living conditions, fighting poverty and securing countries' futures that they all have to be discussed and decided together.

Also I hope that we will be able to use modern technologies to contribute to improved quality of life for people around the world. If Rio were to produce a paradigm shift, it would be a big success.

Interview: Mirjam Gehrke / gsw
Editor: Simon Bone