When Germany’s current development minister, Dirk Niebel, assumed leadership of the Federal Ministry for Economic Cooperation and Development in late 2009, the development community in Germany and beyond braced for a shock.
After all, during the election campaign, Niebel, a member of the outspokenly pro-business Free Democrat Party, had said that the prestigious ministry with a €6 billion ($7.94 billion) budget should be abolished. Germany is Europe’s biggest aid donor, if you count debt relief, second worldwide only to the United States. His rationale reflected his party’s free-market philosophy in a nutshell: Handouts paid for by German taxpayers don’t help anyone, not the struggling poor in the developing world and certainly not Germany’s overtaxed citizenry.
But two-and-a-half years later, BMZ is still standing and Niebel has even won plaudits for streamlining the ministry’s implementation agencies. Yet, at the same time, his tenure has marked an emphatic shift in the ministry’s orientation, making its priority the engagement of German businesses in the developing and emerging world: as investors in the overseas private sector and as partners in BMZ co-financed development projects.
Germany’s sharpened focus on private sector engagement is in line with a broader trend among donors such as the United States, United Kingdom, Japan and the European Union. In a world where public-private partnerships are on the rise, the case of Germany could be a cautionary tale: PPPs are no silver bullet, and traditional aid will likely remain the norm.