The German federal government plans to stop providing fast-growing countries in the Global South with free development aid in the form of grants. Development Minister Reem Alabali-Radovan (SPD) announced on Monday that “our cooperation with emerging economies such as India, South Africa and Mexico will, as a rule, take place through repayable loans.”
Given the budgetary constraints facing the federal government, Germany’s development assistance will focus on countries “where the need is greatest,” particularly in Africa, Alabali-Radovan said. On Monday, the minister presented her ministry’s new development strategy. In the future, it will concentrate more strongly on regions “that are of central importance to security in Germany and Europe.” These include regions in Europe’s immediate neighborhood: the Middle East and North Africa, the Sahel region, and the Horn of Africa.
At the same time, the interests of German companies are to be given greater consideration. “If there are development funds, then of course German and European companies must also be considered,” the minister said, referring for example to the awarding of contracts to German firms. “In doing so, we are also investing in our security, our economy and our geostrategic strength.”
As a new guiding principle of German development policy, Alabali-Radovan outlined: “Moving away from the watering-can approach toward sharper regional focus.” Her ministry will redistribute its shrinking budget accordingly and direct it primarily toward the world’s poorest countries—especially to combat hunger in Africa. “That means, conversely, that we will phase things out on other continents,” Alabali-Radovan said. For example, her ministry will “bring its engagement on migration issues in Latin America and Southeast Asia to an orderly end.”
According to the minister, the new strategy also responds to the fact that some countries in the Global South have experienced strong economic growth and no longer require grants. “With emerging economies, we see that there is economic strength,” she said. Development projects in these countries should therefore be financed through loans that must be repaid. Alabali-Radovan cited India, South Africa and Mexico as examples. China, she noted, already receives no development grants.
The realignment of Germany’s development policy is not only a response to budget pressures, Alabali-Radovan said, but also to global developments that make a stronger focus necessary. “International solidarity is under pressure,” the minister said. The United States has withdrawn entirely as a donor, while many other countries are cutting development aid. “We are experiencing a multipolar world that is playing by new rules, or by no rules at all.”
This has created a situation in which “the USA is leaving gaps that Russia and China are only too happy to fill.” Germany’s development assistance must therefore become “more strategic, more focused and more partnership-based,” Alabali-Radovan said. At the same time, it is clear “that we alone cannot close the gap left by the USA,” she added, pointing to Germany’s own “very difficult” financial situation.
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