ODA Increasing

Self-Help

Official Development Assistance Increasing

Federal Government's Memorandum on DAC's 1989/90 Annual Audit

In 1988, the official development assistance (net ODA) given by the Federal Republic of Germany increased by 5.4 per cent over the previous year, to DM 8,319 million. The memorandum, published in August, points out that this increase is even higher than the 5 per cent growth in the GNP. So in 1988, as in 1987, the Federal Republic's ODA represented 0.39 per cent of the GNP. The country thus continues to be above the DAC average of 0.35 per cent.

This development is attributable in particular to the increase in multilateral aid, which rose by DM 402.8 million (17.2 per cent). In 1988, its share of the total ODA rose to 33 per cent, as compared to 29.6 in 1987).

Other official flows (OOF) rose in the year under review by 40.4 per cent to DM 2,276 mill ion, mainly as a result of increased re-scheduling of guaranteed trade credits.

Non-government aid

Aid given by non-governmental organizations (churches, foundations, associations) out of their own funds and donations rose from DM 1,160 million in 1987 to DM 1,222.8 million in 1988, thus maintaining their traditional high level.

Private assistance granted at market interest rates rose from DM 4,713.7 million to DM 8.951.3 million in 1988.

Total aid

Overall, Federal German assistance rose from DM 14,914 million in 1987 to DM 20,769 million in 1988. Its share of the GNP was thus 0.98 per cent (preceding year: 0.74 per cent).

Future government aid

For 1989, the Federal Government expects a further rise in the absolute value of ODA. The reason is, in addition to other positive developments, an increase in the budget of the Federal Ministry for Economic Cooperation (from which most official development assistance is financed) by 5.4 per cent.

Taking the increased use of net cash flow (1989: DM 120 million; 1990: DM 200 million), the draft 1990 budget of the BMZ allows for a 3.7 per cent increase in spending. This is higher than the overall budget increase (3.4 per cent). Further increases are planned for 1991 to 1993.

Regional distribution of funds

According to the Federal Government's Memorandum on the DAC

Annual Audit for 1989/90, Africa remains the chief beneficiary continent, receiving DM 2,237 million, i. e. 44.1 per cent of the allocable bilateral net ODA payments (1987: 41.1 per cent; 1986: 42 per cent). Of this, 33.3 per cent was accounted for by the sub-Saharan countries alone. The report states that this reflects the importance attached by the Federal Government to ensuring self-sufficiency in food supplies and to supporting reforms in Africa.

Asia's share in 1988 amounted to 31.6 per cent of the allocable bilateral net ODA payments (1987: 28.5 per cent; 1986: 37.0 per cent).

Latin America received 14.3 per cent of the net payments (1987: 18.5 per cent; 1986: 15.3 per cent).

Distribution of funds by country categories

The least developed countries (LDC) received 27.8 per cent of the allocable bilateral net ODA payments in 1988. The funds were granted exclusively in the form of subsidies.

A total of 53.4 per cent of all government aid pledged under bilateral Financial and Technical Cooperation in 1988 went to the poorer and poorest developing countries with an annual per capita income of less than US$ 480.

Self-Help Needs Freedom to Develop

With a report on the potential and limitations of self-help in the context of a development policy aimed at fighting poverty, the Wissenschaftlicher Beirat beim Bundesminister fur wirtschaftliche Zusammenarbeit ( Scientiflic Advisory Committee of the Federal Minister for Economic Cooperation) has made clear its position on a topic which is of major importance in the present debate on development policy.

The Committee proceeds from the view that encouragement of initiative and self-help are basic preconditions for any viable socioeconomic development. However, it believes that self-help must enjoy considerable freedom from state controls etc. in the various social systems if the necessary individual initiative is to develop.

The report goes on to state that self-help, as a part of development policy, can only be promoted from outside to a very limited extent, and that it is more important to work to wards improving general conditions in the countries in question through a dialogue between "promoters and promoted" at different levels.

The report has been published in the series "BMZ-aktuell" and can be ordered from the Federal Ministry for Economic Cooperation. It is only available in German.

Address: Bundesministerium fur wirtschaftliche Zusammenarbeit Karl-Marx-StraBe 4-6 5300 Bonn 1 FRG

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