As German aid budget is set to rise to new highs, NGOs clamor for more

At the beginning of this month, the German Cabinet unveiled its draft budget for BMZ — the government’s development ministry — for 2016, and the announcement was eye-catching: The budget will be raised 13.5 percent to 7.42 billion euros ($8 billion). This increase is just the latest in what seems to be an annual rise of the development ministry’s budget since 2009, when it stood at 5.81 billion euros. The proposed increases were impressive across the board, with a further 600 million euros committed to countries affected by displacement, another 600 million euros toward health systems in Africa, and an extra 250 million euros in climate funding. Although amounts have not yet been specified, there are pledges for BMZ to “increase its funding to fight global hunger and its investment in efforts to provide vocational education in North Africa and the Middle East” as well. This budget reflects the particularly pressing nature of current global events. Between 2010 and 2014, the conflict in Syria has turned an estimated 3.3 million of its citizens into refugees — greater than the population of Berlin. The Ebola outbreak, meanwhile, has claimed more than 10,000 lives in West Africa, and prompted much soul-searching among donors and aid implementers as to how to strengthen local infrastructure for a more robust response in future. Germany, too, has long recognized the threat posed by climate change, and its new commitment reiterates that position. Negotiations on post-2015 agenda a key factor Yet current events are only part of the reason for these proposals. In an interview with Devex, Katrin Erlingsen, the development policy officer at international nongovernmental organization DSW, outlined the other key consideration. “The overall increase in the budget,” she said, “is very much related to the negotiations [that went on] in Addis Ababa at the Financing for Development conference, and to the negotiations going on in New York on the post-2015 development agenda.” Germany “is very much off track” on its commitment to provide 0.7 percent of its gross national income on official development assistance, Erlingsen explained. The country currently spends just 0.41 percent of its GNI on aid, well behind Belgium, Switzerland, Luxembourg, the Netherlands, the United Kingdom and Scandinavian countries. And this, according to Oxfam Germany’s Climate Change Policy Adviser Jan Kowalzig, is due to “a lack of political will.” Compared with the global average, Germany is a “sensationally rich country,” he added, noting that it could “easily” meet the 0.7 percent target “if it wanted.” In Kowalzig’s view, this reluctance was “a question of priorities within the government, and within a tight budget without new debts, issues lower on the political agenda such as development aid are the first ones to lose out.” Recently, civil society and even some members of parliament, especially the opposition, have been calling on the government to increase its ODA funding. “The argument behind [this] was always to say if Germany wants to see a substantial outcome in Addis Ababa and in New York, we will have to put something on the table,” Erlingsen said. Substantial room for improvement The picture that emerges, then, is a budget with a contradiction at its core: Its significantly greater size gives cause for optimism, but its amount still leaves substantial room for improvement. While Erlingsen and Kowalzig both welcomed the increase, they felt that there were specific areas in which the BMZ budget could go further still. One of these was in relation to health care systems, where Erlingsen noted that despite an increase of hundreds of millions of euros there was no additional allocation of resources to the Global Fund to Fight AIDS, Tuberculosis and Malaria; a commitment which currently stands at 210 million euros, and which DSW feels should increase to 400 million euros to reflect Germany’s ability to make a decisive contribution. The other was in relation to climate change. Kowalzig’s concern was that the extra funds proposed for this area would address what he referred to as an “imbalance” in German climate finance. “Less than a third — 29 percent — of German climate funds are spent on adaptation,” he explained. “There should be a balance between mitigation and adaptation … so that you get sufficient investment in the fragile areas, such as food security, water security, risk reduction, risk management and so forth, to prepare for incoming disasters in the future. All these kinds of things are heavily underspent on in developing countries.” Kowalzig also indicated another potential issue with the structure of German climate funding. While the German government remains keen to channel the bulk of this aid through BMZ, seeing this as a sign of its “growing responsibility in this field,” Kowalzig was not sure that this was necessarily a good thing. “Ninety percent of German climate finance is spent through bilateral action,” he said, “and the problem with that is that you can’t build capacity in those countries as effectively as if you give it through, say, a multilateral fund such as the Green Climate Fund or the Kyoto Protocols Adaptation Fund with their innovative approach to directly access finance through country-owned institutions.” Beyond these critiques of specific parts of the German budget was a wider concern. “If you compare the German budget, not only for development cooperation, but in general to budgets of other countries, it’s not very transparent,” Erlingsen pointed out. “In the case of the development budget, that’s because it’s not structured along topics, it’s structured along the institutions, which will disburse the money. You cannot read out of the budget which money is going to which sector.” Erlingsen cited gender as an example of shortcomings of this approach. “Germany asks other countries to do gender-sensitive budgeting, but we’re not doing it ourselves,” she said. Check out more insights and analysis for global development leaders like you, and sign up as an Executive Member to receive the information you need for your organization to thrive.