Foreword
The OECD Development Assistance Committee (DAC) conducts periodic reviews of the individual development co-operation efforts of DAC members. The policies, systems and programmes of each member are critically examined approximately every five to six years.
The objectives of DAC peer reviews are to improve the quality and effectiveness of development co-operation policies and systems, and to promote good development partnerships for greater impact on poverty reduction and sustainable development in developing countries. DAC peer reviews assess the performance of a given member and examine both policy and implementation. They take an integrated, system-wide perspective on the development co-operation and humanitarian assistance activities of the member under review.
The OECD Development Co-operation Directorate provides analytical support to each review and is responsible for developing and maintaining, in close consultation with the Committee, the methodology and analytical framework – known as the Reference Guide – within which the peer reviews are undertaken.
Following the submission of a memorandum by the reviewed member, setting out key policy, system and programme developments, the Secretariat and two DAC members designated as peer reviewers visit the member’s capital to interview officials, parliamentarians, as well as representatives of civil society, non-governmental organisations and the private sector. This is followed by up to two country visits, where the team meet with the member and senior officials and representatives of the partner country or territory’s administration, parliamentarians, civil society, the private sector and other development partners. The main findings of these consultations and a set of recommendations are then discussed during a formal meeting of the DAC prior to finalisation of the report.
The Peer Review of Germany involved an extensive process of consultation with actors and stakeholders in Germany, Rwanda and Tunisia. Due to the COVID-19 pandemic, these consultations were undertaken virtually. The resulting report, which contains both the main findings and recommendations of the DAC and the analytical report of the Secretariat, formed the basis for the DAC meeting at the OECD on 19 May 2021, at which senior officials from Germany responded to questions formulated by the Committee.
The peer review considered elements of Germany’s political and economic context that shape the nation’s development co-operation policies and systems.
Following elections in 2017, a grand coalition of the Christian Democratic Union; its sister party, the Christian Social Union; and the Social Democratic Party formed the federal government. The parliamentary opposition comprises Alternative for Germany, the Free Democratic Party, the Left Party and the Greens. After serving four parliamentary terms as federal chancellor (2005-21), Angela Merkel will not run in the 2021 parliamentary elections. Nor will Gerd Müller, the Federal Minister for Economic Cooperation and Development since 2013. Dr. Merkel has been a stable and enduring presence in German, European and global politics. During her time as chancellor, the German economy has grown to become the fourth largest in the world and living standards have risen sharply. Incomes have grown and unemployment reduced to its lowest level since reunification in 1990.
In 2020, however, the German economy contracted significantly following the coronavirus (COVID-19) outbreak and resulting collapse in global trade. Gross domestic product (GDP) fell 5.5% and the fiscal balance declined by 6.3% of GDP. The capacity of the health sector combined with testing, tracing and isolation of cases helped bring the initial COVID-19 outbreak under control, with more stringent containment measures introduced in November 2020 as the virus reappeared. Fiscal space resulting from prudent pre-crisis budgeting enabled the government to protect jobs and companies, and Germany played a significant role in the establishment of the European Union Recovery and Resilience Facility. Structural challenges were present prior to the pandemic: insufficient investment in infrastructure including for digital transformation; an ageing population; and the need to transition to cleaner, more sustainable energy and new technologies in the automobile industry (OECD, 2020[1]).
Well-being in Germany was high prior to the pandemic, marked by strong incomes, good work-life balance, access to green space and good student performance. There have been improvements in economic capital, greenhouse gas emissions and labour utilisation over the past decade. However, health outcomes vary according to socio-economic status, air pollution remains high and education among young adults and Germans’ material footprint has worsened. While income inequality had stabilised prior to COVID-19 — aided by a high level of redistribution — and is below the OECD average, the relative risk of living in poverty has risen. Wealth inequality (60% in the upper decile) is high compared with other OECD countries, which average below 50% (OECD, 2020[1]).
In Germany’s federal and decentralised governance system, development actors engage autonomously at the federal, state and municipal levels. At the federal level, the Federal Ministry for Economic Cooperation and Development (BMZ) is Germany’s dedicated ministry for development co-operation. Thirteen other federal ministries extend development co-operation, the most important of which are the Federal Foreign Office, the Federal Ministry for Environment, Nature Conservation and Nuclear Safety, and the Federal Ministry of Finance. Since 2012, the Federal Foreign Office has sole responsibility for humanitarian assistance. In addition, Germany’s 16 federal states (Bundesländer) and a large number of municipalities contribute resources to decentralised co-operation in partner countries. Besides the public actors, civil society organisations, including non-governmental organisations of the two major churches as well as six political foundations round out the broad range of German development co-operation actors.
The Federal Chancellery leads on Germany’s cross-government sustainability strategy, but there is no overall policy vision for development co-operation binding all official German development actors. The German sustainability strategy, approved on 10 March 2021, aims to implement the 2030 Agenda for Sustainable Development. It is structured around the 17 Sustainable Development Goals and comprises indicators and targets on national and international themes. All federal ministries were involved in the process of developing the strategy which included a two-stage multi-stakeholder consultation. Following the principle of autonomous action enshrined in Germany’s Basic Constitutional Law (Grundgesetz), each federal ministry has its own policy documents for providing official development assistance within its own area of competence. Federal ministries share information and co-ordinate in partner countries. In 2018, BMZ’s Development Policy 2030 built upon its 2014 Charter for the Future, aligning development policy to the 2030 Agenda and the Paris Agreement on climate as well as overarching global trends. The BMZ 2030 reform strategy, implemented starting in 2020 has a long-term focus on global public goods and German expertise, allowing amongst other things for new political initiatives that are coherent with the 2030 Agenda and more focused bilateral co-operation.
BMZ has a leadership and oversight role for the four official German implementing organisations: KfW Development Bank; Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, the German corporation for international co-operation; Physikalisch-Technische Bundesanstalt (PTB), the National Metrology Institute; and the Federal Institute for Geosciences and Natural Resources (BGR). Of these, the two main implementing organisations are GIZ for technical co-operation, which operates in about 120 partner countries, and KfW Development Bank, a development finance institution operating in about 70 partner countries. A subsidiary of KfW Group, Deutsche Investitions- und Entwicklungsgesellschaft (DEG), finances long-term investments of private companies in developing and emerging economies.
In addition, the German Institute for Development Evaluation was established in 2012 as an independent body with a multi-stakeholder advisory board that conducts policy and strategy evaluations. The German Development Institute (DIE), established in 1964, is one of the leading research institutes and think tanks for global development and international co-operation worldwide. BMZ and German development co-operation more broadly rely on DIE for research, policy advice and training, and building bridges between theory and practice.