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07/12/2016

Schäuble criticised for ‘cosmetic’ increase in development funds

Development Policy

Schäuble criticised for ‘cosmetic’ increase in development funds

In light of ongoing conflicts around the world, German Finance Minister Wolfgang Schäuble plans to increase development spending. [European Parliament]

Germany’s Minister of Finance stated his intention to increase the budget for development cooperation over the coming years, warning that the world is more unstable than ever. But NGOs and the Green Party dismissed his words as a load of hot air. EurActiv Germany reports.

In light of numerous conflicts in Syria, Iraq, Ukraine and other parts of the world, Wolfgang Schäuble hopes to allocate more resources to internal security, defence and development cooperation.

In an interview with Bild am Sonntag, the centre-right politician spoke of a “moderate increase” in spending for development aid in the coming years. “Our target remains increasing the level of ODA,” a spokesman from the Federal Ministry of Finance said on Monday (2 March) in Berlin.

The Official Development Assistance (ODA) measures the level of spending for public development assistance compared to Gross National Income (GNI).

The Ministry justified its plans with the “ever more difficult international environment”. The German government is “confronted by imponderables and uncertainties”, the spokesman said.

So far, it is unclear how high the budget boost is intended to be. Schäuble is currently in negotiations with the ministries over key points of the 2016 federal budget and the financial plan up to 2019.

But the Ministry of Finance already made it clear that it does not intend to jump into an excessive cost. None of this additional spending will threaten the goal of reaching a balanced budget, meaning “the black zero”, the Ministry spokesman commented.

In 2000, the global community agreed to increase development assistance(ODA) to 0.7% by the year 2015.

In 2013, Germany was at 0.38%, only ranking twelfth among its partners. As a result, Schäuble’s plan for an increase is hardly enough to reach the 0.7% mark over the coming years, or at least to reach a noticeable hike in ODA.

ODA as a percentage of Gross National Income in 2013ODA as a percentage of Gross National Income in 2013

The Social Democratic Party (SPD) faction in the Bundestag said it “expressly” supports Schäuble’s initiative. It is a first step towards getting Germany to fulfill its international commitments.

“At the same time, it is not about a one-time increase but about a continuous path of growth. For long-term planning purposes, development cooperation requires a correspondingly secure allocation of resources,” said deputy faction chair Axel Schäfer and spokeswoman from the Committee on Economic Cooperation and Development, Bärbel Kofler, in a joint statement.

Defence spending instead of development aid

Meanwhile, Green MP Uwe Kekeritz expects little from the planned increase. “First and foremost, Mr. Schäuble wants to increase defence spending. The announcement of a moderate boost in funds for development cooperation is purely cosmetic. Only announcing additional spending on defence would be simply too embarrassing for the government,” Kekeritz told EurActiv Germany.

But in 2015, the year of summits, cosmetics do not suffice, he said. “A clear signal is needed.”

NGOs also consider a “moderate” increase to be insufficient. “In our view, considerably more funds are needed to reach the international development targets,” explained Bernd Bornhorst, chairman of the association of German development NGOs, VENRO.

NGOs call for €2 billion more per year

VENRO is calling for a boost in funding by at least €2 billion annually, until the 0.7% target has been reached.

“If the government stands by the target now as it did before, as it continues to emphasise, then it should come up with a credible plan to reach the target as soon as possible,” Bornhorst said in a statement for EurActiv Germany.

In the coalition agreement, the government pledged an increase of the development budget by €2 billion until 2017, which could have boosted the ODA to 0.45% at the most, according to NGO estimates.

But previous budget planning has missed the target by a long shot. Compared to 2014, the German Development Ministry (BMZ) only plans to raise spending by €2 billion. Looking at medium-term financial planning until 2017, the additional spending would only amount to €1.07 billion – taking into account the fact that the BMZ lowered its 2013 expenditures by close to €300 million.

>>Read: NGOs decry German development budget as ‘irresponsible

UN states are scheduled to meet in mid-June in Addis Abeba for the conference on development financing. In September, they will then meet in New York to decide the Post-2015 development agenda.

Background

In 2005, member states pledged to increase Official Development Assistance (ODA) to 0.7% of Gross National Income (GNI) by 2015 and included an interim target of 0.56% ODA/GNI by 2010.

These were based on individual targets of 0.7% ODA/GNI for the EU 15 and 0.33% GNI for the 12 Member States which joined the EU in 2004 and 2007, according to the European Commission.

Countries that were already at or above 0.7% ODA/ GNI pledged to sustain their efforts. The EU Heads of State and Government reaffirmed their commitment to reach the 0.7% target by 2015 at the European Council on 7/8 February 2013.

A Eurobarometer survey from October 2012, said that 85% of polled EU citizens believed that Europe should continue donating aid to developing countries.

Timeline

Summits 2015:

14-18 March: UN World Climate Conference on Disaster Risk Reduction, Sendai City (Japan)

19-22 May: World Education Forum 2015, Incheon (South Korea)

7-8 June: G7 Summit, Schloss Elmau (Germany)

13-16 July: UN Third International Conference on Financing for Development, Addis Abeba (Ethiopia)

21-23 September: UN Summit for the Adoption of the Post-2015 Millennium Development Goals, New York (USA)

30 November-11 December: World Climate Conference, Paris (France)