News from Bonn

6th Report on Energy Supply Development Policies

Indebtedness Reduced

Development Aid not Seen as an Obligation to Pay Tribute
6th Report on Development Policies Published

Worldwide economic recession, the borrowing crisis and famine have revealed weak points and errors in the economic, financial and development policies of developing and industrialized countries alike. With this assessment Jurgen Wamke, Federal Minister for Economic Cooperation submitted the 6th Report on Development Policies to the Federal Government after it had been passed by the Federal Cabinet.

Both developing countries and industrialized nations, he continued, had been living above their means, though admittedly on different levels. Developing countries, often with the assistance of Western banks and development-aid institutions, had, the Minister revealed, carried out overambitious projects or invested money with little hope of a profitable return. The crisis in Africa south of the Sahara had, Warnke said, clearly demonstrated the serious omissions made by many countries of this region in rural development and agricultural policy.

All this had led to an international mood of disillusionment resulting in the re-examination of economic policies and development cooperation between Western industrial countries and developing countries.

Reorientation

Warnke reminded his audience that the Federal Government was acitvely participating in the international rethinking process in the relationships between North and South, and had accordingly reoriented its development policies. In the words of the Minister the Federal Republic was providing development aid out of a sense of moral responsibility and far-sightedness from the political and economic standpoints, but not as a "tributary obligation". Development aid, he said, was not the result of a bad conscience.

The Federal Government considered the rise in the funds available, which were once again increased this year, to be less important than the increase in the effectiveness of the aid itself. The Minister for Economic Cooperation went out to say that too much was being wasted all over the world. In order to change this it was necessary to secure the framework within which the creative potential of each individual could develop. This was, he said, why the
Federal German Government was increasingly also supporting organisations and action groups which helped people to help themselves.

As instruments for the realisation of these goals Warnke stressed political dialogues with counterpart countries on their own economic and development policies as well as improved coordination between the donors. He simultaneously emphasized the basic role of partnership in development-policy cooperation.

Supporting the safeguarding of food supplies

Of the main aspects of Federal German development policy Warnke explained that the safeguarding of food supplies through efforts made in the developing countries themselves, particularly in Africa, had been given top priority. The proportion of assurances to African countries south of the Sahara that corresponding German projects would be carried out had been increased in the period from 1982 to 1985 from 26.5 percent to 34.1 percent, the Minister reported. In the long term, however, it would only be possible to increase food production by developing rural areas and their infrastructure. The share of measures to promote, rural development had, for this reason, been increased from 20.6 percent in 1982 to 29 percent in 1985.

The preservation and protection of the natural foundations of existence are being given increasing attention by the Federal Government. Changes in the environment such as the spread of deserts or the rapid shrinking of the tropical rain forests were, Warnke said, a serious threat to developing countries. The Federal Government had thus examined all current projects with regard to their effects on the environment. The necessary steps to control or eradicate the environmental problems that had arisen had, Warnke continued, been undertaken. All new projects would, of course, be submitted to an examination of their compatibility with environmental protection.

The Minister gave a high priority to the initial and further training of specialists and leaders. The same went for basic-needs-oriented measures, which had been increased from 28.4 percent in 1982 to 37.6 percent in 1985.

As the Minister stressed, it was part of the compensation of interests with counterpart states that German development aid should, wherever possible, have a positive effect on the employment situation in the German economy, thus easing the position of the unemployed in Germany. Warnke considered that the present Government had succeeded in bringing about a detente in the relations between the state and the economy. The Federal Government had undertaken measures to mobilize the dynamic forces of the private sector, particularly in small to medium-sized companies and craft enterprises, for development cooperation.

Development policies are policies for peace

In the development-policy report now published, development aid is seen as part of the Federal Republic's worldwide peace policies. Precisely because the political instability of many Third World countries was the result of underdevelopment the only effective counter-strategy would be one of development.

The forces of balance, not of violence, would be supported. The development report expressly demands, of course, respect for human rights without which there can never be permanent external or internal peace. The success of development efforts, the report went on, was often prejudiced by disregard for the basic rights to life, liberty and security and by the denial of economic, social and cultural rights.

Indebtedness of 22 Developing Countries Reduced

The Federal Republic of Germany has reduced the indebtedness of a total of 22 developing countries belonging to the LLDC group. They were relieved of a total of DM 4,000 million in repayments and interest on development-aid loans already received. These 22 countries include 19 African states. They were relieved of some DM 2,500 million in debts. This was announced by the parliamentary Secretary of State to the Federal Minister for Economic Cooperation, Volkmar Kohler, prior to this year's world economic summit in Bonn (FRG). Kohler stressed that the Federal Republic of Germany had thus joined those industrial countries which had carried out the 1978 UNCTAD resolution to the greatest possible extent.

The Federal Government, however, rejects a general extension of this practice to developing countries which do not belong to the LLDC group. Nor is it in favour of a worldwide international conference on foreign debts.

Energy Supply Has High Priority

The Federal Republic of Germany and the Republic of India intend to continue their cooperation on the exploitation of local energy sources, the structural adaptation of the industry and transport sector, rural development and technical training. This is the result of governmental negotiations held recently.

The main emphasis in the field of Financial Cooperation will continue to be India's energy supply. In order to reduce its dependence in imports of oil, India is systematically exploiting its own sources of energy. Whithin the framework of the agreements now reached on further development cooperation, support is to be given towards the construction of the 1,700-kilometre pipeline from Hazira to Jagdishpur.

In addition to individual projects in the sector of industry and transport, the provision of credits through two Indian development banks are intended to promote investments by private small to medium-sized companies which will have a positive effect on development projects. German aid is also being granted to help supply 530 Indian villages with drinking water. The main emphasis in Technical Cooperation is on technical training. Ways in which the Federal Republic can support the Indian Government in its efforts to give increased assistance to self-help groups of the poorer classes were also discussed.