What the German election means for development funding

Very little is predictable about Germany’s upcoming federal elections, except that Sunday’s vote will ultimately result in a new chancellor and a new head of the country’s development ministry. After 16 years in power, Chancellor Angela Merkel is stepping down. Development minister Gerhard Müller, who hails from Merkel’s Christian Democratic Union, is following her out the door. After eight years leading the ministry, known by its German initials BMZ, he has already been tapped to take over the United Nations Industrial Development Organization. Merkel and Müller oversaw a marked increase in development assistance. The country’s $28.4 billion in ODA spending last year made it the second-largest donor in absolute terms, while pushing Germany past the 0.7% aid target for the second time. In his final days, Müller is also cementing the overhaul of his ministry in line with BMZ 2030, the plan introduced last year to streamline both the countries and program areas BMZ supports. There are no guarantees on how long those legacies will hold. Development spending is already on the chopping block as the government looks to end pandemic-era borrowing. Substantial cuts are forecast, including a drop in the BMZ budget from $13.9 billion this year to $11.1 billion in 2024. The future of BMZ 2030 and of those cuts will be determined not just by the outcome of Sunday’s vote, but also by the scramble to form a coalition that will follow. Not only is no party likely to secure the majority of Bundestag seats necessary to form a solo government, but the vote is predicted to be so divided between the six major parties that a three- or four-party coalition may be necessary. That is likely to translate into a centrist government, observers predict, which could ultimately keep BMZ on its current track, but also limit its ambitions during a moment when many are looking for Germany to take a more coherent and assertive role in regional and global development policy. “There is a huge opportunity to rethink the approach that’s been taken in the past,” said Anita Käppeli, who heads policy outreach for Europe at the Center for Global Development. “The Germans have really stepped up in the past couple of years. What’s been lacking is the strategy to pursue those goals, not just in their development policy, but also at the European, the global level.” Development is decidedly not at the center of Germany’s upcoming elections — never raised during the chancellor debates, despite petitions from civil society for its inclusion — and rarely mentioned in coverage of the campaigns. “To advance the climate agenda or any topic connected with sustainable development, there must be coherence of objectives and means across ministries. It requires a balance.” --— Imme Scholz, the deputy director, German Development Institute The major parties do include development policy in their manifestos with varying degrees of detail, though “a lot of the parties have a lot of the basics very right,” said Lisa Hücking, a policy adviser at Welthungerhilfe. The Social Democrats, or SPD, currently lead most polls, but have less than 30% of the vote. They are pledging to maintain the current 0.7% aid target, while committing 0.2% to least-developed countries. Civil society organizations have been demanding the inclusion of the 0.2% target, particularly after BMZ 2030 dropped German support to more than two dozen countries — many among the world’s poorest. The classical liberal Free Democratic Party shares the 0.2% goal, but not the broader 0.7% demand. Meanwhile, Merkel’s CDU promises more of what they have delivered the last eight years, including deepening partnerships with African nations and linking development funds to opportunities for private-sector investment. The Greens, who are currently running third and factor into many potential coalition constellations, offer the most extensive vision of development policy among the major parties — positioning the sector as part of their effort to “drive the global socio-ecological transformation.” They call for divesting development aid “from colonial and patriarchal thought patterns,” while proposing policies like social cash transfers to strengthen social safety nets and a new fund to compensate communities for climate-related damage and losses. Observers said a key priority is missing from virtually all of the platforms: a promise to streamline German development goals across the entire government. For most parties, “there is no coherent strategy across ministries on what they want to achieve on German development policy,” Käppeli said. This has long been a hallmark of German development. As Merkel’s government began to prioritize its relationship with Africa following last decade’s migration crisis, three different ministries created plans for how Germany would engage with the continent. That incoherence leads to overlap across different ministries, and also limits Germany’s ability — despite its significant contributions — to help chart a European or global development agenda. And it looks set to continue. “You see more ministries are interested in taking up cooperation with developing countries,” said Imme Scholz, the deputy director of the German Development Institute. “To advance the climate agenda or any topic connected with sustainable development, there must be coherence of objectives and means across ministries. It requires a balance.” The government updated its Sustainable Development Strategy this year as a blueprint for how the ministries should align their policies with the Sustainable Development Goals. There are obvious overlaps in the BMZ 2030 strategy, which positions existing ministerial initiatives within the SDG framework. Observers said it is conceivable to imagine BMZ, particularly under a new leader with political clout, taking a greater role in coordinating a similar effort across the broader German government. But it is unlikely. As Adolf Kloke-Lesch pointed out in a recent analysis for the Center for Global Development: While BMZ 2030 embraces many aspects of the SDGs, it is limited in the topics it focuses on and lacks a truly global conceptualization. Given BMZ’s place in the ministerial hierarchy, there are some whispers about potentially folding it into a more powerful branch, like the foreign ministry. That would match the arrangement in most European governments. It is, however, unlikely, particularly at a moment when coalition organizers will need as many ministries as possible to divide among potential partners. Despite the political limitations, the new BMZ minister will still wield significant influence — having sufficient funds and connections to sustain a global impact. BMZ does “have representatives at the World Bank and different U.N. agencies,” Hücking said. “They have a way of communication that goes outside the foreign ministry or outside the chancellery.” But the proposed budget reduction already looms over the future minister’s potential impact. Germany has legislative limits on federal borrowing that have been suspended during the pandemic. But the current government has pledged to comply with those rules again by 2023. Whether the new government maintains that priority and, if it does, whether it might look for other sources of savings are still open questions. While the current proposal originates from Merkel’s CDU-led coalition, the budget comes from the finance ministry headed by Olaf Scholz. Scholz is the SPD candidate for chancellor.