“Pure aid creates dependency”

IP: According to the latest WikiLeaks publication of U.S. diplomatic cables, the Americans considered you an “odd pick” for the job of development minister.

Niebel: That assessment is based on my party’s call ahead of the election to integrate the development ministry into the Federal Foreign Office, not because the FDP is opposed to development aid per se, but because it was against the prevailing form of development policy, which—from the Free Democrat point of view—was often not conducive to an integrated German foreign policy stance. However, we were not able to achieve our demand in the coalition negotiations. In a situation like that there are just two options: Carry on as before, or seize the opportunity to do a better job oneself. I was happy to accept the challenge.

IP: If one considers your full title—Minister for Economic Cooperation and Development—one can see how a business-friendly party like the Free Democrats might take a shine to it after all. Is that what has happened?

Niebel: The Federal Ministry for Economic Cooperation and Development (BMZ) was founded 50 years ago and the first minister was Free Democrat Walter Scheel. And you are quite right to point out the full title. This is not a “development aid ministry” that dispenses alms, at least not under the leadership of an FDP minister. German development policy is value-oriented, but it can also be interest driven.

I believe economic development is the best way to really combat poverty effectively. No country can be developed from the outside, and aid alone creates dependency.

FDP development policy views sustainable economic growth in developing countries, supported by a dynamic private sector, as both a central condition for the reduction of poverty and a way of contributing to the solution of other urgent challenges in areas such as the environment, health, or education. The best method of cooperation is realizing good projects in developing countries with private funds, not taxpayers’ money. But the development policy benefit is always the main focus. My colleague Rainer Brüderle [German Economics Minister, FDP] is responsible for the promotion of German business interests abroad.

IP: In early December, the cabinet approved your plans to merge the three state development organizations (GTZ, InWEnt, and DED) into one new agency. What do you hope to achieve by that?

Niebel: The reform of the technical cooperation organizations is a central aim in the development chapter of the Coalition Agreement. The reform will remove unnecessary double structures, create more efficiency, save money, and at the same time increase the effectiveness of our work. In addition, and this is particularly important to me, the reform will mean that we present a coherent face to the countries with whom we are cooperating, who currently often have to deal with several different organizations on the German side. It will also allow my ministry to concentrate on its political steering role, which will be strengthened, while the new implementing agency, the Gesellschaft für Internationale Zusammenarbeit (German Association for International Cooperation—GIZ) can concentrate on the role implicit in its name: carrying out the tasks assigned to it by the BMZ and the German government.

IP: Germany will spend 6.2 billion euros on development aid in 2011. That’s an enormous sum, but the share of German overseas development assistance (ODA) as a proportion of gross national product is sinking. The European Commission estimates that German ODA would actually have to increase by 2 billion euros a year to achieve the E.U. target of 0.7 percent of GNP by 2015. Are you still aiming for that?

Niebel: Germany committed itself to the 0.7 percent goal 40 years ago. I’m holding firm to that aim. But I have always acknowledged that it will be difficult. I took over my ministry with a quota of 0.35 percent. To achieve our goal, we need innovative financing instruments as well as greater private sector participation. But I want to make one thing clear: Ultimately, it is aid effectiveness and not the amount of money we spend that matters most to me.

IP: You have said you want to make German development assistance “more business-friendly.” In what way?

Niebel: There will be no sustainable development in our partner countries without sustainable economic growth. The private sector must be able to flourish in order to create jobs and generate prosperity. That’s why our approach begins with the basic parameters for entrepreneurial activity in the countries. That way we promote the local private sector and at the same time support our partner countries’ integration into world trade, for example by helping them to attract foreign investment—including from Germany.

We are also engaged in an intensive dialogue with the German private sector to enlist its support for our work and our aims.

IP: One of your first acts in office was to cut development aid to China and India. You said you wanted to “deploy German aid where it was most needed.” Do you think that decision disqualifies criticism that you want to subordinate German development aid to German economic interests, since both countries are becoming increasingly important for German foreign trade? And if not in India and China, where is German aid necessary?

Niebel: First of all, I have to correct you there. We have discontinued bilateral cooperation with China but not with India. And by the way we are continuing to work with countries like Brazil, Mexico, Indonesia, and South Africa—and it is right to do so. Why? Because emerging countries display the characteristics of industrialized and developing economies, simultaneously and alongside each other: hi-tech industries and primitive production methods, Ferraris alongside oxcarts, extreme wealth and great poverty. These countries are represented in the G20 but at the same time more than half of all the people living in absolute poverty worldwide are to be found there.

That’s why my ministry is working on a concept of development cooperation with emerging countries that takes into account this unique set of problems. In terms of topics, we will concentrate on the areas of climate and environmental protection, sustainable economic development and global development agendas. We are not promoting the competitive ability of these countries. We are accompanying them along the path of structural transformation—and that is in Germany’s interest. Of course, we are also involving the German private sector in our cooperation on the ground. We need that input and business know-how to achieve our quantitative and qualitative development policy goals. But I want to stress one thing: The focus of our policy is on improving the living conditions of the people in the developing world. And I think it is plain to see that our help is needed equally in both emerging and developing nations.

IP: You are promoting Public Private Partnerships (PPPs) in development work. But isn’t this more a way of subsidizing German industry than combating poverty?

Niebel: We have a very successful instrument for cooperation with the business sector. The “develoPPP.de” program works directly with private companies to plan, co-finance, and implement development projects. Companies get involved so as to make a contribution to development, often out of a strategic understanding of their Corporate Social Responsibility. But they also profit, for example by getting their foot in the door of new markets and by gaining a reputation for good corporate governance. Development policy benefits greatly from cooperating with German and European companies that bring innovative ideas and business models, entrepreneurial know-how and technology, as well as additional private funds to bear on our development work. We invest one euro and the contribution made by the companies involved means that two or three euros arrive in the partner country. These are not subsidies, they are sustainable investments in developing countries.

IP: Development NGOs like Terre des Hommes Germany and Deutsche Welthungerhilfe are concerned that linking aid to German business interests could lead to a situation where assistance is mainly concentrated on comparatively well-developed urban areas at the expense of more impoverished rural communities. Do you share that concern?

Niebel: I cannot comprehend that concern. First, the interests of the German private sector do not determine our development policy. We are simply trying to identify win-win potential and use it. And anyway, development policy interests and economic interests are also directed toward rural areas too. Rural development, trade in raw materials, and food supplies are key issues for the future.

IP: Germany has just taken a non-permanent seat in the U.N. Security Council. How important were decisions about the allocation of German development aid?

Niebel: The successful candidacy for a non-permanent seat on the U.N. Security Council indicates that Germany enjoys a reputation as a reliable partner. The Federal Republic was elected in the first round of voting by an absolute majority of all 192 member states. That is a clear demonstration of the great trust placed in us internationally. We have worked to earn that trust through well-considered and well-balanced international policies. Germany’s contributions in the field of development cooperation have also played an important role. Our contributions include both bilateral and multilateral official development assistance, and our conceptual approach and wide range of instruments enjoy a strong global reputation.

But the commitment to development cooperation within German civil society and the private sector also plays a role in Germany’s positive international image. We are aware of the particular responsibility emanating from the non-permanent seat on the Security Council and the trust placed in us, and we will continue to make every effort to deserve it.

IP: How do human rights issues affect German development policy?

Niebel: The German government sees development policy as practical human rights policy. Realization of human rights is key to sustainable poverty reduction. The everyday lives of people around the world are affected by the extent to which their human rights are respected, protected, and guaranteed—for example the right to food, the right to the highest possible level of health, the right of access to education, or also the right to freedom of association. The German government’s human rights approach promotes development policy which sees people as the agents of their own development.

IP: Germany has successfully co-sponsored a resolution at the U.N. Human Rights Council establishing the right to water and sanitation as a legally binding universal human right. Water is a natural resource that is increasingly becoming an important and problematic issue with regard to poverty reduction and in relations between countries. What is German development policy doing to make it possible for poor or disadvantaged populations to access water and sanitation?

Niebel: Germany didn’t just co-sponsor the resolution; it was, along with Spain, the driving force behind it. That is consistent with the fact that the water and sanitation sector is an important focus of German development cooperation and our policy of working to implement human rights. Within the water sector, Germany is the third-largest bilateral donor worldwide and the largest bilateral donor in Africa.

Development policy is involved at every level. Internationally, Germany is working at the United Nations with its partners to define goals and approaches most likely to be successful. Nationally, we are working together with our partners to implement the right to water and sanitation and to safeguard water resources. I have just returned from Zambia, where with German support, 440 water kiosks have been built since 2005. The kiosks now provide some 600,000 people with clean and affordable drinking water. Most of them are in informal settlements, serving the poorest people. During my trip, I myself officially opened a new water kiosk in Livingstone.

The impact of our policies is clear: Today, 1.6 billion more people have access to clean drinking water than in 1990. We expect to meet the Millennium Development Goal of halving the number of people without access to safe water by 2015. That is proof that joint efforts can achieve great progress. We need to achieve similar success in the area of sanitation and hygiene. It is intolerable that a third of humanity still has no access to decent sanitation facilities.

IP: You are a supporter of “civil-military cooperation” in the development sector. Can you define the concept?

Niebel: For me this issue is about more than simply civilian-military cooperation. I believe in coordinating the individual instruments of security policy, foreign policy, and development policy so as to increase their impact. And one of my most important goals is to make German development policy more effective. We can do that by coordinating our policy and agreeing to a clear division of labor. Security and development policy complement each other. A purely military strategy, which does not take into account underlying structural problems, is not sustainable and runs the risk of failure, as does a development policy approach that is too narrow and ignores security aspects altogether.

IP: In crisis regions like Iraq and Afghanistan, it’s often impossible for aid workers to do their job without military protection. Yet many critics believe that increased cooperation between NGOs and soldiers can only lead to the “militarization” of development assistance. They see this as a dangerous trend that could in the long term put at risk both the acceptance of aid among affected populations and the security of relief workers. What do you think?

Niebel: In the German area of responsibility in northern Afghanistan, no NGOs are working under direct military protection. The Bundeswehr ensures overall security to create the secure environment necessary for development cooperation. I would like to highlight a different aspect of cooperation between NGOs and the military: The German government has agreed on an overall strategy for reconstruction in Afghanistan. The aid groups that receive funds from our newly created NGO facility for Afghanistan are required to utilize those funds within the framework of that overall strategy. That means in Kabul and in the north of the country where the German Bundeswehr bears particular responsibility for security. Equally, I have said that this has to happen within the framework of networked security. What that means is simply that all relevant actors on the ground should consult with one another, which in the case of the NGOs can also be done via local-based staff of the BMZ. In many cases, that is already routine practice. It’s the only way we can guarantee that we use taxpayers’ money coherently and effectively. To be successful in Afghanistan we need concerted efforts in order to achieve joint development success.

Interview conducted by Kevin Lynch.

DIRK NIEBEL is Federal Minister of Economic Cooperation and Development. He was secretary
general of the Free Democrat Party from 2005-2009.