21/11/2001 - Germany is now the third largest donor among member countries of the Development Assistance Committee (DAC), after Japan and the United States. In 2000, Germany's ODA was USD 5.0 billion and its ratio of ODA to gross national income (GNI) increased to 0.27%. The implementation of the German government's political commitment to uphold an ODA level consistent with the United Nation's 0.7% target ratio remains constrained by the government's overall national objective of balancing the federal budget by 2006. Germany's current ratio is above the DAC (weighted) average of 0.22%, but below the DAC average country effort (unweighted) of 0.39%.

Germany has put development issues high on its domestic political agenda. It made poverty reduction a visible priority in the Programme of Action 2015 that establishes global poverty reduction as an important element of overall government policy and an overarching goal in development co-operation. Greater coherence in policies affecting developing countries is now a government-wide priority and is also being pursued internationally, especially with other Members of the European Union. The Federal Ministry for Economic Co-operation and Development (BMZ) now has greater authority to enhance this policy coherence. A detailed implementation plan for the programme is being developed and is expected in early 2002.

A number of organisational changes have been introduced in the last three years to enhance cohesion, streamlining, and operational efficiency among German development institutions. This has reduced the organisational size and further simplified the operations of the overall German system. Some streamlining of effort is now taking place in the partner countries, as well.

The DAC reviewed Germany's development co-operation policies and programmes on 20 November 2001. It commended Germany on the quality of its co-operation on the ground and welcomed the progressive changes that have been made to the German aid programme since the last Peer Review in 1998. In addition to the changes mentioned above, they include the implementation of DAC recommendations to untie development aid to the LDC's, a closer involvement with selected multilateral and bilateral agencies, and a broader and more strategic approach to working with civil society.

This new vision for German development co-operation raises a number of operational challenges. Recognising that the Programme of Action 2015 sets out an ambitious agenda for development co-operation within a global perspective, and that it will be essential to align policies, resources, operations and organisation with this vision, the DAC Chairman, Mr. Jean-Claude Faure, summarised the committee's recommendations:

• The DAC welcomed the reversal in declining ODA volumes and share of GNI from 1999 onwards. It encourages Germany to sustain efforts to increase the size of its ODA and to generate greater support for development co-operation amongst the general public. Central to this will be the maintenance of an active dialogue with parliamentarians, civil society, the media and the public on the aims, benefits and risks associated with delivering Germany's aid programme.
• Strengthen the German focus on priority allocation of ODA resources around its Programme of Action 2015, including the geographic and sector dimensions.
• Continue to seek, and develop, effective ways and instruments for the promotion of greater policy coherence in such areas as trade, agriculture, environment and conflict reduction, across the German government and at European and international levels.
• Take full advantage of the new generation of German operational country strategies to address the challenges of greater sector focus and the appropriate mix of aid instruments, including the best approaches to partner country capacity building, in collaboration with the broader donor community.
• Give urgent consideration to the reinforcement of German field capabilities, whether official or contractual, so as to improve efficiency by shifting the locus of German aid co-ordination and decision-making progressively towards the field.
• Review options for improvement in communications and learning, both among German development agencies in the field and between the field and headquarters in Germany.
  Look closely at the issue of horizontal learning within the partner country as one area for future improvement. The DAC supports current German efforts to reinforce its monitoring, evaluation and knowledge management capacity.
• While recognising the high quality of German development personnel, the DAC is concerned by the prospect of continued staff reductions. In view of this special challenge, the DAC welcomes Germany's efforts to maintain a personnel management vision that anticipates its staffing needs (quality, skills, location) in this evolving context.

During the review, the German Delegation was led by Dr. Ursula Schäfer-Preuss, Director-General, Instruments of Bilateral Co-operation, Federal Ministry for Economic Co-operation and Development. The examiners were Japan and Switzerland.

he Main Findings and Recommendations of the DAC review will be available next week on the DAC/OECD internet site at http://www.oecd.org/dac. A full record of the review will be published in the DAC Journal.

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