German Development Minister: ‘Every country is responsible for its own financing’

In an exclusive interview with EURACTIV Germany, Gerd Müller called on developing countries to assemble stable tax systems, while advising industrialised nations to use TTIP as an opportunity to promote fair trade.

Gerd Müller has been Minister of Economic Cooperation and Development since December 2013. The conservative politician previously served as parliamentary state secretary in the Ministry of Food, Agriculture and Consumer Protection for eight years. He spoke with EURACTIV Germany’s Dario Sarmadi.

The UN conference in Addis Ababa (13-16 July) is supposed to secure financing for the development agenda until 2030. What kind of overall sum is needed to achieve this?

The conference of Addis Ababa is deliberately not meant to be a conference of pledges. Instead, it is focused on tapping into all available financial resources for the biggest challenges of the new Post-2015 Agenda – so not just international public finance transfers through ODA but, for example, national public funds as well. This means capable tax systems will have to be constructed in developing countries. Of course the poor should not be taxed, nor should growth be stifled. But in newly industrialising and developing countries, there is also a growing number of wealthy people who are not, or are only marginally, taxed.

Which outcomes do you expect from Addis?

Addis will deal with the question of what development financing should look like in the future. Along these lines, it must become clear that, for starters, every country is responsible for its own financing. Many developing countries are rich in natural resources, rich in land but the added value does not stay in the country and likewise neither do the revenues. Here, Germany is a particularly important consultation partner when it comes to building a functioning administrative or tax system.

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In addition, there are questions over how this added value and economic growth can be sustainably organised. But to do this, the necessary financial resources must be available. Only if we arrange them, can we agree on a sustainability treaty in New York in September. Because of its dimension, I call it a global future treaty.

For years, donor countries have been committing themselves to increasing their Official Development Aid (ODA) to at least 0.7% of GNI. What year will Germany reach the 0.7% mark?

The German government continues to stand by its target of allocating 0.7% of GNI annually to development cooperation. EU development ministers jointly emphasised their commitment again in their council conclusions from May and set 2030 as the deadline for reaching the target.

And Germany is energetically pursuing this. With a 13.5% increase, our budget shows the highest jump in its history. Funds for economic cooperation and development have doubled in absolute numbers under Chancellor Merkel. Here, Germany is setting a strong example.

But experts remain certain that the Sustainable Development Goals (SDGs) will not be able to be supported by purely public development funds. Which alternative sources are necessary?

We know that global ODA only makes up a fraction of the necessary financial resources. As a result, all sources must be included and exhausted. This includes national tax revenues from developing countries and private funds and investments, which should be mobilised much more intensively than they have before. Last but not least, to implement the new global future treaty, we need completely different things besides money: more technology transfer, for example, a fair global trade system, and more responsible treatment of natural resources. Here, industrialised countries, in particular, are needed.

According to the proposal, the SDGs consist of 17 sustainable development goals with a total of 169 sub-targets. Isn’t this list too long? How should one even measure targets like good governance and gender equality?

It is true that it consists of a comprehensive catalogue of targets, but we should not forget it is about the big questions over humanity’s survival. And that is why the agenda is so comprehensive. Everything is interconnected. If we ignore this, we run the risk of doing something good in one place, while we destroy something in another. But in my view, the concrete requirements and targets are also very important. These are the only way to make progress measurable. As a result, the agreement must simultaneously contain measures for a monitoring mechanism.

With the textile alliance, you are hoping to strengthen ecological standards and labor rights in developing and newly industrialising countries. But the alliance is based on voluntary commitments. Hasn’t the past demonstrated that voluntary action only works under certain conditions?

Voluntariness does not mean it is unbinding. In this way, we could make considerable progress in social and environmental standards in globally organised supply chains. Own commitments create added value where state mechanisms are not as effective. Because legal regulations at the national level do not get us any further here.

>>Read: German fair textile initiative seeks international alliance

Furthermore, members of the textile alliance have agreed on the development of a monitoring system. Progress will be regularly analysed and recorded. If results show that a member is not meeting the targets of the alliance, a sanction mechanism will take effect, which could even end up in a company’s expulsion.

You hope to create fairer global trade. At the same time civil society criticises the planned transatlantic free trade agreement TTIP – which you support – for bringing disastrous effects upon developing and newly industrialising countries. How can the German government ensure that such negative effects do not occur?

We must achieve fair trade via free trade. That also applies to TTIP. For this reason, I am in regular dialogue with representatives from developing countries, politicians and civil society to discuss the possible effects of TTIP. Our goal is to take the concerns of developing countries into consideration and ensure that TTIP does not construct any barriers to trade. In addition, international sustainability and social standards, like the ILO standards for radiation protection of workers, should be established and binding within TTIP.

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