The German Government’s Devastating Cuts to Foreign Aid

Last month, the Federal Cabinet of the German government convened to approve a draft budget for 2025. Although the budget will continue tobe debated in parliament over the coming months, the initial draft sets the tone both politically and financially, and establishes the government’s priorities. This time around, development policy and foreign aid were not among them.

In the ongoing budget negotiations, neoliberal politicians have repeatedly called for significant spending cuts to the Federal Ministry for Economic Cooperation and Development (BMZ) — or for the ministry to be abolished altogether. Next year, the so-called “traffic-light coalition” between the Social Democrats (SPD), Greens, and Free Democrats (FDP) will be making more cuts to funding for projects in the Global South than in any other department. Compared to the last budget passed before the current government’s tenure began, BMZ funding has fallen by 23 percent in four fiscal years, and funding for humanitarian aid from the Federal Foreign Office (AA) by 29.9 percent.

Instead of strengthening development policy and humanitarian aid, as promised in the coalition agreement, the 2025 budget continues with spending cuts in the international arena. Instead of addressing ways to bolster revenue such as a more extensive global minimum tax or a national wealth tax, the debt brake and spending cuts remain the dominant practice.

The ongoing debate around Germany’s foreign aid also mixes racist and free-market arguments. Our thesis roughly one year before the 2025 parliamentary elections is that the government is seeking to externalize the consequences of Germany’s austerity policy. After all, small-scale farmers from Mali will not protest in front of the Brandenburg Gate.

Die Linke should speak out against cuts to the BMZ and AA budgets, while supporting the demands of relevant civil society initiatives. At the same time, Die Linke must adjust its stance on “development policy” to align with a global, intersectional, and solidarity-based approach. Die Linke can use development policy as an arena to highlight the consequences of crisis-prone capitalism and national chauvinism, and as a space to develop ideas and concepts for a fairer and more humane global society.

Promises vs. Reality

A look at the 2021 coalition agreement shows where Germany and the German government stand in terms of development policy: “Spending on crisis prevention, humanitarian aid, AKBP [foreign cultural and educational policy] and development cooperation should continue to increase on a one-to-one basis with defence spending.” Yet the figures tell a different story — indeed, precisely the opposite has happened. Instead of approving more funding for the BMZ’s international work, the coalition has decided to enact unprecedented cuts.

^{*VENRO estimates on the cabinet resolution dated 5 July 2024.
Sources: VENRO: Haushalt 2024: Neue Kürzungen, Analyse 2024; VENRO: Auswirkungen von Kürzungen bei der Entwicklungszusammenarbeit und Humanitären Hilfe, own calculations.}

If you compare the current figures with the figures from the last budget before the current government took power, the BMZ budget is now set to fall by 23.23 percent. The Foreign Office’s humanitarian aid and crisis prevention activities will also continue to be cut significantly in the coming fiscal year.

If the BMZ budget had increased in proportion to defence spending (excluding special funds) as promised, the budget for 2025 would be 15.18 billion euro. Instead, however, the government withdrew a total of roughly 6.1 billion euro from development policy over the four fiscal years. In humanitarian aid, the government has planned about 400 million less over the next four years. Such cuts are incomprehensible and — as the British example makes clear — dangerous in light of the growing number of global crises and the moral responsibility of the Global North.

What the FDP has long pursued — namely completely abolishing the BMZ — is now being partially achieved by draining its financial resources.

The coalition also failed to fulfil other commitments and promises. For example, the agreement on the so-called “ODA quota”, concerning how much foreign aid donor countries should contribute relative to their economic output, states: “We will adhere to an ODA quota of at least 0.7 percent of gross national income (GNI). Within this framework, we are earmarking 0.2 percent of GNI for the poorest countries of the Global South (LDCs). In addition, the funds for international climate financing will continue to grow.” Neither promise has been kept.

According to a parliamentary inquiry by Die Linke, only 0.12 percent of Germany’s economic output was used for LDCs in 2022, compared to 0.14 percent the year before. The German “climate promise” to spend 6 billion euro per year on international climate financing in the Global South was also buried following the supreme court decision regarding the application of the debt brake. The trend away from solidarity with the world’s poorest is thus also abundantly clear here.

Growing Populist Invective against Foreign Aid

Liberals and conservatives have criticized the BMZ for many years. If they do not want to dissolve it completely, they call for the BMZ to be transferred to the Ministry of Economic Affairs — after all, the original goal is the “economic development” of “developing countries” — or (more rarely) to integrate it into the Foreign Office and thereby achieve efficiency-boosting coherence and coordination. Critics often point to France, where the Ministère de la Coopération was dissolved and development cooperation was integrated into the Foreign Ministry.

In an era of fiscal distribution struggles and growing national and global inequality, attacks on global solidarity and international redistribution are on the rise in the German press and broader political landscape. The aim is often to discredit development policy as such. The simplified comparison of government spending in Germany and that in the Global South serves as a vehicle, presented as a zero-sum game to the supposed detriment of the German population.

A recent example of this “Germany First” discourse was the aggressive criticism of the BMZ's funding of new bicycle paths in Peru, which are intended to contribute to a transport transition in the Andean nation, one of the countries most affected by climate change. The example was taken up by Finance Minister Christian Lindner on primetime television to justify additional defence spending. Instead of responding to the increasingly loud criticism of the debt brake and austerity policy at the time, he scapegoated development cooperation as supposedly excessive and pointless spending of ideological do-gooders for whom distant Peru is more important than Germany.

What the FDP has long pursued — namely completely abolishing the BMZ — is now being partially achieved by draining its financial resources. The SPD and the Greens have not yet prevented the cuts. Although Development Minister Svenja Schulze recently threw around the figure of 12 billion euro in BMZ requirements as a red line, the 2024 budget already falls short of this line by more than 800 million euro.

A Contested Field for Die Linke

Development policy is part of the Left’s DNA. After all, it is about international solidarity, empathy for the structurally disadvantaged, and changing our own and collective awareness and actions. From a left-wing perspective, development policy means redistribution in favour of people in the Global South.

In times of real and perceived insecurity in our own country, this does not make us many friends among the general population. On the contrary, left-wing critiques of colonialism, an unjust global economy, and the exploitation of people and nature by German companies regularly provokes defensive reflexes. Right-wing and liberal forces use them to appeal to selfish, nationalistic instincts among the population, discredit development policy as such, and cut its funding.

Development policy, as the Left tends to understand it, is difficult to introduce into current debates in German politics. This does not mean that issues of “postcoloniality” or the Eurocentric understanding of “development” and “underdevelopment” should not be addressed in current development policy debates simply because they are not easy to communicate in day-to-day political work. On the contrary: if, for example, “empowerment” is understood to mean discussions with company representatives from the Global South “at eye level” — as representatives of the BMZ like to suggest — then the lack of equality in LIGHT of the existing power asymmetries must be unequivocally criticized and discussions in this form rejected.

Generally speaking, left-wing critique must take a critical look at international cooperation. If, for example, actors such as the state-owned Deutsche Investitions- und Entwicklungsgesellschaft (DEG) use offshore financial centres to avoid taxes, or, as a subsidiary of the Kreditanstalt für Wiederaufbau (KfW), finance German companies that systematically commit human rights violations, this form of “development policy” must be clearly criticized and ultimately stopped.

Die Linke must explicitly project itself as a partner of civil society in the Global South, the EU, and in Germany itself.

The current shape of development cooperation and the cuts to the BMZ will further encourage the financialization of development policy (i.e. using public money to acquire profit-oriented private investments for alleged development policy projects) — a trend that is met with approval, as recently expressed by the Parliamentary State Secretary at the BMZ, Niels Annen (SPD), during a hearing on climate measures in Africa. As liberal and conservative politicians and business representatives have long desired, so-called “de-risking” — the protection of private investments with public funds — will also increase. Development policy, as currently pursued by the German state, is too often a foot in the door for capitalist penetration and market-based (de-)regulation of previously untapped markets in Africa, Asia, and Latin America.

Die Linke criticizes not only these flawed approaches, but also the specific policies of Development Minister Svenja Schulze, which are characterized by political hyperactivity and poor implementation. One example of the former is the Global Alliance for Food Security, which was announced at the meeting of G7 development ministers in Berlin on 18–19 May 2022, but has essentially only produced the Global Food and Nutrition Security Dashboard, a database of existing food security projects. While interesting as a data source, it provides little new insight and has no impact on the funding of agricultural policy projects. Another example is “feminist development policy”, one of Schulze’s flagship programmes. The Left should welcome it insofar as it means real structural improvements for women. However, if the label “feminist development policy” merely means relabelling funding guidelines so that around 93 percent of all new BMZ projects will contribute to gender equality in 2025, then this is not very credible and, in an era of historic budget cuts, raises suspicions of “purplewashing”.

It is something of a paradox: as Die Linke, we must sharply criticize development policy in its current form — and at the same time, defend it against attacks as a form of material redistribution and historically based compensation (colonialism, world wars, exploitation, isolation, labour, raw materials). Die Linke must also oppose the discourse on the usefulness of German development cooperation, which has grown massively under the pressure to make cuts and outweighs global solidarity with security for Germany and economic promotion for German companies.

For a Politics of Global Justice

Die Linke must explicitly project itself as a partner of civil society in the Global South, the EU, and in Germany itself. Campaigns initiated by civil society, such as those organized by the Association for Development Policy and Humanitarian Aid (VENRO) and the Working Group of One World Regional Networks (AGL), must be supported. In the current budget debate, we call for the BMZ budget not to be cut any further, and instead increased back to 2022 levels at the very least.

We need a clear debate about bolstering government revenue. The global minimum tax for wealthy corporations must not only be significantly raised from 15 percent, but must also be used specifically for global justice. In addition, we need a global minimum tax on billionaires. At the national level, we need tax justice, fairer taxation of high incomes and wealth, and the abolishment of environmentally harmful subsidies (company cars alone are subsidized with around 5.5 billion euro per year).

Die Linke must rise to two challenges. On the one hand, it must put forward a positive narrative of internationalism. Given that people recognize “inequality” as a major social problem and current surveys perceive the “climate crisis” as the most important challenge, there are points for us to build on. It is obvious that these two exemplary fields can only be minimized and solved on a global scale. On the other hand, Die Linke must identify concrete fields of action for a different “development policy”, towards a global, intersectional, and solidarity-based politics. New paths need to be taken: realpolitik and short-term as well as utopian and medium-term.

Short-term realpolitik demands include, for example, that BMZ funds be used to promote the German and European Supply Chain Sustainability Act. Left-wing forces in development policy and their allies should utilize the planned complaint and lawsuit mechanisms, particularly given demands to suspend the laws.

Loans linked to repayment obligations that further exacerbate the debt crisis should be rejected.

Facilitating access to the German education system for people from the Global South is also a suitable demand for more global justice that corresponds to people’s everyday understanding and can be communicated.

In the area of global agriculture, the BMZ must withdraw from the Alliance for a Green Revolution in Africa (AGRA) and other initiatives that promote the Green Revolution agricultural model, with its massive use of resources to the benefit of corporations. Instead, the BMZ should make the right to food and agroecology the guiding principles of its development policy and underpin them with clear measures and measurable goals in all projects.

The German government should support the establishment of public food storage facilities in countries of the Global South. Through a globally coordinated and locally managed system of food storage facilities, stocks of important staple foods such as maize, rice, wheat, vegetable oils, and other products could be set up in strategically useful geographical locations and managed by the Food and Agriculture Organization of the United Nations (FAO), a UN agency set up specifically for this purpose or by national governments.

In climate protection, financing, and adaptation, we need international financial commitments geared towards the needs of the most affected populations and provided in the form of grants. Loans linked to repayment obligations that further exacerbate the debt crisis should be rejected. Innovative taxation mechanisms, such as a shipping tax, an aviation tax, and a global tax on the rich (the UN Tax Convention should be closely monitored here) could be a potential source of funding to promote global redistribution. The funding contractually guaranteed in international climate agreements to mitigate climate damage and losses in countries of the Global South, which contribute the least to the climate crisis but are most affected by the consequences of climate change, must be provided in addition to the 0.7 percent ODA pledge and must not be offset against or replace existing development payments and humanitarian aid.

These exemplary demands around global redistribution, climate justice, and corporate responsibility show the path that Die Linke should take in development policy.