Countries of the World/COUNTRYS.BIN/dp/0409/04097.txt

Text File | 1991-06-25 | 15KB | 300 lines

$Unique_ID{COW04097}
$Pretitle{373}
$Title{Federal Republic of Germany (West Germany)
Economic Cooperation}
$Subtitle{}
$Author{German Embassy, Washington DC}
$Affiliation{German Embassy, Washington DC}
$Subject{countries
development
developing
german
cooperation
federal
third
world
assistance
country}
$Date{1988}
$Log{Table 1.*0409701.tab
Table 2.*0409702.tab
}
Country:     Federal Republic of Germany (West Germany)
Book:        Pamphlets on Germany
Author:      German Embassy, Washington DC
Affiliation: German Embassy, Washington DC
Date:        1988

Economic Cooperation

     The Federal Republic of Germany attaches great importance to development
cooperation with the countries of the Third World. This fact is confirmed by
the scope of development assistance: The Federal Republic of Germany is one
of the world's foremost donors of development assistance, working together
with 130 states worldwide on an equal partnership basis.

Scope of official development assistance

     In 1987, official development assistance provided by the Federal
Republic of Germany amounted to DM 7.9 billion, or 0.39 percent of the gross
national product. The average among the Western industrialized
countries - this group of countries contributes the lion's share of the
development assistance provided worldwide - is 0.34 percent.

     Approximately one third of German development assistance is provided to
multilateral organizations, in particular to the World Bank Group, the Asian,
African and Inter-American Development Banks, and the United Nations and its
subsidiary organizations. Of the total development assistance provided by the
European Community, the Federal Republic of Germany contributes just under 30
percent.

Non-governmental development assistance

     Another significant contribution to development assistance is made by
non-governmental organizations such as churches, foundations and
associations. These non-governmental organizations provided approximately
1.74 billion marks in 1987. They are financed primarily by donations and, to
a certain extent, by government funds as well.

Recipients of German assistance

     More than half of German aid is granted to the poorer and poorest
countries with a per capita income of less than US $400 per year. Since 1979
the Federal Republic of Germany has forgiven over DM 4.2 billion in debts
owed by the poorest developing countries, the so-called LDC countries. The
Federal Republic leads the rest of the world in this respect and hopes that
other donor countries will follow its example. The LDC countries now receive
new development assistance only in the form of - non-repayable - grants.

     The main recipient of German development assistance today is Africa,
which receives just under 44 percent. Most of the funds designated for this
continent go toward projects for rural development and food security,
reflecting the conclusions the Federal Government has drawn from the African
famines of past years. Following Africa are Asia, with 37 percent of
development assistance, and Latin America, with 13 percent.

Global economic framework conditions

     In recent years the interdependence between developing countries and
industrialized countries has continued to grow. Economic growth and opening
of markets on the part of the industrialized countries are therefore
essential preconditions for development progress in the Third World.

     - Protectionist defense mechanisms - whether applied by industrialized
countries or developing countries - impair world trade and thus harm
everyone.

     - In the long run, neither an industrialized country nor a developing
country can afford permanent subsidies. This may be seen from the EC
agricultural commodities market, which has become a problem for the member
states. Subsidized foodstuffs from the EC pose a threat to agricultural
production in the Third World. Here Europe as well is confronted with the
painful task of having to alter structures which have evolved over a period
of centuries.

     - The decline in prices of numerous raw materials, which may be
attributed equally to a rapid increase in supply and a drop in demand - a
dramatic drop in some cases -, attests to the urgency of diversifying the
economies of the Third World countries.

     - The developing countries will only then be able to reduce their debts
of over DM 2,000 billion if, together with their creditors, they are able to
negotiate new, affordable conditions tailored to each individual case and are
able to noticeably increase their exports to the industrialized countries.

     - In recent years, stimulation of market forces, reduction of
governmental regimentation and provision of incentives for private-sector
economic initiatives have induced an upward trend again in numerous Third
World countries. Thus one important condition has been met for the gradual
staunching and eventual reversal of the absurd flow of capital from South to
North.

Development cooperation policy in practice

     The German contribution to development projects is made either in the
form of favorable loans, grants and deliveries of material or by providing
experts for a limited period of time.

     Cooperation is realized through joint projects and programs. This means
that both the recipient country and the Federal Government make contributions
in the form of funds or, respectively, personnel.

     The governments involved first discuss which project is to be
implemented. They then conclude an agreement which forms the framework for
cooperation. The third step is a joint, detailed examination of the project
in the manner customary worldwide: Technical, economic, socioeconomic,
sociocultural and ecological factors are examined in the process.

     On the basis of the intergovernmental agreement, detailed contracts are
then concluded between the project sponsor in the developing country and the
German implementing organization. The most important implementing
organizations are the Reconstruction Loan Corporation (Kreditanstalt fur
Weideraufbau - KfW) and the German Agency for Technical Cooperation
(Deutsche Gesellschaft fur Technische Zusammenarbeit - GTZ).

     If initial training and further training of skilled manpower from
developing countries are to be provided, the German Foundation for
International Development (Deutsche Stiftung fur internationale
Entwicklung - DSE) and the Carl Duisberg Society (Carl Duisberg
Gesellschaft - CDG) implement the training programs.

Promotion of entrepreneurial activity

     Private-sector economic cooperation is of great value to Third World
countries due to the transfer of capital and enterpreneurial and technical
knowledge it entails. The Federal Government therefore promotes economic
commitments by German firms in developing countries. To this end the Federal
Government has created a wide variety of instruments within the framework of
the DEG Deutsche Finanzierungsgesellschaft fur Beteiligungen in
Entwicklungslandern - German Financing Company for Investments in Developing
Countries) for providing services ranging from advice concerning
opportunities for cooperation in developing countries to investments, loans
and insurance for investments. This promotion is directed primarily toward
small and medium-sized companies.

[See Table 1.: Regional distribution of pledges within the framework of
financial and technical cooperation (FC + TC) with the developing countries -
to the extent splitting is possible -]

Services and conditions

     Over the years German development cooperation has created a diversified,
finely-tuned set of instruments for practical applications. These instruments
are continually being improved and adapted to new conditions. Financing is
provided for:

[See Table 2.: Movement of goods between the Federal Republic of Germany and
the developing countries since 1982]

     - Investment projects and investment programs, such as construction of
new factories - or enlargement of existing facilitie