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Trilateral Cooperation in Africa, Germany and China

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Published: Wed, 07 Feb 2018

A Model towards Poverty Reduction in Africa

1 Genesis of Trilateral Development Cooperations
1.1 Introduction: The roots of current Trilateral Cooperations

The shift towards multilateral cooperations and, more specifically, Trilateral Cooperations (TC) is more visible today than ever before. Many traditional aid recipient countries have recently become donors of development aid as well (Altenburg & Weikert 2007: 1). In particular are today’s emerging powers such as China, India, Brazil and South Africa. These countries are increasingly providing aid programs for needier developing countries. This thesis deals with this entry level into the donor role. In the case of the country China, which has already provided development aid in the past and holds an important position among the New Donors. In addition the study attempts to find an answer to the question: Is there a common ground, together on which the People’s Republic of China and the Federal Republic of Germany might engage in a Poverty Reduction Project in Africa? Finally a tentative model shall be introduced, which suggests how Trilateral Cooperation between China, Germany and Africa might look like.

Taking a closer look further back in history one will find that development co-operations in general became more significant in the late 1940s, in the aftermath of World War II, following the initiation of the famous Marshall Plan to rebuild the economy of the European countries (Hjertholm & White 2000: 59). This successful implementation led to the belief that development aid projects have the ability to be effective. As a result of this realization, the notion of development aid received an enormous boost.

From the late 1940s until the early 1960s Development Cooperations have been exceptionally in the form of bilateral agreements (Mehta & Nanda 2005: 1). Among the existing development aid given to reconstruct Europe, the United States of America was the outstanding donor establishing Development Cooperations in many developing countries (Mehta & Nanda 2005: 1).

The period from the early 1960s to the mid 1970s saw a considerable progress in multilateral development assistance (source). While in 1960, the original membership of the Development Assistance Group, the predecessor of the Development Assistance Committee (DAC), did cover most of the significant aid donors of the day the list of member states comprised Belgium, Canada, France, Germany, Italy, Portugal, the United Kingdom, the United States and the Commission of the European Economic Community, joined almost immediately by first Japan and then the Netherlands. But even by then, the Russians had famously replaced the US and the World Bank as sponsors of the Aswan Dam, and indeed India and other Asian Commonwealth countries had been providing technical assistance under the Colombo Plan (source) since 1950. In 1961, Kuwait established the first of the Middle East funds: Hence their has been a great dislike of most of the well-established and professional Middle Eastern donor agencies of being referred to as “emerging donors” aka “non-DAC donors”. (source)

In addition, China undertook some significant and high-profile interventions, most notably the Tan-Zam railway, which was probably the biggest construction project undertaken anywhere in Africa in the 1960s and 1970’s, and where at a time when DAC donors almost never covered any local costs China took a much more generous attitude – even if they raised the local currency largely by sales of Chinese consumer goods (source).

Mehta and Nanda (2005:2) name four major multilateral institutions as being responsible for providing development assistance during this period: International Development Association (IDA) attached to the World Bank; the Fund for Special Operations of the Inter-American Development Bank (IDB); the cooperation fund of the European Economic Community; and the United Nations Development Programme (UNDP), organized in 1965 through the merger of several United Nations (UN) financial facilities.

Meanwhile, the idea of South-South Cooperations was born at the Bandung Conference[1] in 1955 when the leaders of 29 so-called developing countries came together to recognize the promotion of collective self-reliance as a political imperative. This event was followed by the establishment of a Working Group on Technical Cooperation among Developing Countries (TCDC) by the UN General Assembly in 1972. In 1978, many more such leaders gathered at Buenos Aires to formulate a Plan of Action (BAPA), a conceptual framework and programmatic goals, all endorsed by the UN General Assembly a few months later. The Bandung conference was celebrating its golden jubilee in 2005, at which point practical ways to put forth the South-South cooperation agenda was examined.

In 1999, the High-level Committee called the Special Unit on the Review of TCDC[2] and resolved that the South-South cooperation should be viewed as a complement and not as a substitute for the North-South cooperation. This effectively meant that the committee was of the view that a North-South-South cooperation was needed. Thus, the recognition for the importance of Triangular Development Cooperation came about.[3]

However, on a practical level, Trilateral Cooperation already received a major boost in 1993 at the Tokyo International Conference on African Development (TICAD). It has since become known as the TICAD process in which Japanese resources are used to promote exchanges between Asian and African countries (Mehta & Nanda 2004).

In May 2004, an international conference on poverty reduction in Shanghai, China adopted the Shanghai Agenda for Poverty Reduction. Commonly known as the ‘Shanghai Consensus’, it opposed the central theme of the Washington Consensus by proclaiming that state intervention is necessary for development and that everything cannot be left to the markets (Metha & Nanda 2005:2). The agenda shows that stronger cooperation between all development partners including South-South cooperation can facilitate an increase of poverty reduction efforts through exchange of ideas, the transfer of resources and the strengthening of capacity. In this effort, it also reinforced the issue of partnership between all stakeholders to leverage and scale up a country’s development efforts.

Today, more than five decades after the beginning of development aid, many principles are still being implemented for Development Cooperation Projects. To mention in particular is the need to correct the discrepancy between providing assistance on one hand and montary discipline and trade liberalisation on the other hand. The, so called ‚New Donors’ (Altenburg & Weikert 2007) present willingness to accept responsibility for international development.

The evolving relationship between China and Africa could be one of the most important developments in the international relations in the post-Cold-War era (Ampiah & Naidu 2009). Germany is known as a traditional donor and has a long history of development assistance within both geographic entities, China and Africa[4].

The thesis at hand discusses opportunities and limits of Trilateral Development Cooperation between the traditional donor Germany and the emerging country China in a third African developing country. Emerging countries are aspiring economical and political powers, which cannot be ignored in order to solve present and future world order issues (Stamm 2004: 20).

Starting with this Introduction, part 1 leads from an historical perspective to the more nuanced assessment of the current plateau of relations of Trilateral Cooperations.

The Development of TCs will be discussed in part 2, including Egon Bahrs’ approach implementing Germany’s first Trilateral Cooperation and its failures. Furthermore it will show the specific Establishment of Trilateral Cooperations within the German Development Cooperation for Sustainable Development (GTZ). Part 2 provides a contextual understanding of Trilateral Cooperations by (1) giving definitions, (2) considering preconditions as well as (3) alluding to benefits of Trilateral Cooperations. Two case studies concluding the chapter evaluating German Trilateral Cooperations by contrasting the two geopolitic areas discussed in this work: Southeast Asia and Sub-Saharan Africa.

By tackling the crucial question of the role of governance within Trilateral Cooperations concerning ideological differences between the western and the southern world, part 3 starts with an identification of the ‘term of negotiation’, followed by a summary of approaches given by diverse institutions and international organisations engaging within the governance debate. It further contrasts governance as a common term of negotiating with the emerging conflicts arising from clashing perceptions of governance particularly between China and Western Countries. This part also examines perspectives on Chinas alternative governance model.

Covering all the geo-strategic positions, part 4 examines the cross-currents of Germany’s and China’s relation to Africa. In opposition to the common myths that often describe China’s role as that of a ‚yellow peril’ and Western powers as ‚knights in shining amour’ part 4 rather focuses on common engagement within the field of poverty reduction. Furthermore does part 4 present a model, showing what a Trilateral Cooperation between China and Germany in Africa will look like. Delineating the triangular relationship, a case study is used as a model suggesting the Congo Basin Forest Partnership as a possible development project with promissing success for all participating actors.

The final substantive part provides a collection of lessons learned from engaging in Trilateral Cooperations in general and warns for possible dangers and finally concludes with an analysis of the possiblitities of the developing partnership between Germany, China and the continent of Africa.

1.2 Research to date

There are numerous publications on Trilateral Cooperations in general. A more globalized world tends to be open for more cooperation. For this reason many of the former bilateral cooperations are now extended to Trilateral Cooperations. Multilateral Cooperations in general are a common way of working together to solve common conflicts. Trilateral Development Cooperations between traditional donors, non-DAC countries and developing countries however are rather rarely researched (Harmer & Cotterrell 2005: 4). More specifically, Trilateral Cooperations with China in Africa have only been researched in recent years by institutions such as the European Union (Commission of the European Communities 2008), Deutsche Institut für Entwicklungspolitik (Altenburg & Weikert 2006) and Department for International Development (Mehta & Nanda 2005). Most of the research compiled for this thesis is therefore based on documents of these institutions.

1.3 Methodology

The research for the thesis at hand was compiled during the course of an internship at the German Cooperation for Sustainable Development (GTZ)[5] in Beijing, China. The research was considered as part of the Sino-German Poverty Monitoring & Evaluation Project, which was established to introduce a participative Poverty Monitoring and Evaluation System (from local to national level) to the Province Jiangxi. The project has recently been expanded to include the topic of “Trilateral Cooperations: Germany & China in Africa”. The mandate of the intern entailed an analysis of the possibilities for Engagement in a Trilateral Cooperation between Germany and China to the benefit of a third African nation in the field of poverty reduction.

For this purpose GTZ experts, project partners such as International Poverty Reduction Center in China (IPRCC) and the State Council Development-Oriented Poverty Alleviation Leading Group (LGOP) as well as consultants of the organisation’s broad network supported and advised the research. As a result, the thesis is mainly based on qualitative analysis, case studies and comparative analysis. In addition, the qualitative methods comprises literature review, policy and legal analysis. Historical as well as recent case studies are analysed for the purpose of presening lessons learned as an aid to future performance. Furthermore, the presented study reposes on one-on-one conversations with the GTZ (China, Indonesia, Germany), IPRCC experts, the German Embassy in South Africa and the China Agricultural University. There has been correspondance with the Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung[6] (BMZ) as well as with the Deutsche Institut für Entwicklungspolitik[7] (DIE). In addition various documents and relevant sources of information, as from the European Union, for example, have been evaluated.

During the process of identifying relevant cooperation corridors for strategy-building and the development of new instruments for cooperation, the usage of sources has been a challenge. Some interview partners, exclusivly Chinese contributers, wish not to be cited and some studies, relevant for this thesis, are either not published or they are being kept confidental. The salient information which is free to be used can partly be found in the final chapter as well as in the use of ideas and data, the sources, of which must remain anonymously cited.

2 Trilateral Cooperations in Context

2.1 Defining Trilateral Cooperations

Generally speaking, a Trilateral Cooperation is a three-sided joint operation for mutual benefit. In the context of this thesis, the term, ‘Trilateral Cooperations’ refers to a certain set-up of participants: one traditional donor, one new donor and one developing country. Among the different types of trilateral cooperations this analysis focuses on ‘Trilateral Development Cooperations’.[8]

According to DIE (Altenburg & Weikert 2007), Trilateral Development Cooperations are considered as “cooperation projects which are jointly planned, financed and carried out by an established donor country which is already a member of the OECD[9]-DAC together with a cooperation country which, although itself a recipient of development cooperation and not (yet) a member of the DAC, is emerging as a new donor, and a third country as the recipient.” The DIE definition is of great importance for the Trilateral Cooperation Model, I will present in part 4 of this study as it points out the special composition of the trilateral cooperation. In this case Germany is the traditional donor, while China acts as the new doner and non-OECD and DAC-member and an African country as recipient. Another imporant aspect of a trilateral cooperation is given by the German Development Cooperation. It states that a Trilateral Cooperation is an innovative form of cooperation: “A mutual passing on of lessons learned to technically and institutionally less advantaged third countries.[10]”

There are, however, two essential features of Trilateral Cooperations: (1) the importance of South-South relations and (2) the type of capital transfer.

(1) In contrast to traditional aid assistance governments of emerging countries are now asked to change their way of thinking. Trilateral Cooperations challenge them to change positions from having been an aid receiver in the past towards becoming a new donor. In other words, money from industrialized countries is transferred on an institutional level to the developing country, where it will be implemented through technical assistance. Therefore South-South relations are of great importance in this matter.

(2) Trilateral development cooperation offers new means of funding, as the established donor and the cooperation country organize the know-how-transfer to the third country jointly.

2.2 Preconditions for Trilateral Cooperations

To maximize the opportunities for the success of Trilateral Cooperations, it is necessary to set up specific preconditions and ensure that they are met in order to prove that an effective or cooperative work is feasible.

Altenburg & Weikert (2007) note that common interests are not yet a sufficient condition for Trilateral Development Cooperation and give four elementary requirements, which, from their point of view, need to be fulfilled before entering the triangular cooperation: Increasing alignment with good donor practices, co-financing by the cooperation country, efficiency, and donor coordination. Although the aforementioned requirements can be seen as some sort of core preconditions, there are still other crucial factors that need to be considered. (Altenburg & Weikert 2007: 3)

Firstly, the right timing, for a successful undertaking is imperative.[11] For all participating actors of the TC, the necessity to enter the cooperation needs to be apparent. The right timing needs to be considered in this context also because there might be countries willing to enter the tripartite operation but are, time wise, either not ready or simply not able to be part of a certain project. Political strategy plays a major role in finding the right timing to engage in a Trilateral Development Cooperation.

Secondly, readiness of actors is indispensable for a trilateral dialogue and a cooperation implementation. There are two major considerations concerning this precondition, which might even seem too obvious.

(1) The actors need to be ready to engage in both trilateral dialogue and cooperation. Within the past years there has been much discussion between potential cooperation countries but not one single trilateral dialogue has let to the commencement of a sound trilateral cooperation. Thus, the readiness for dialogue but not for the actual cooperation, has been given. This observation has only been made in reference to TC with the anchor country China.

(2) The motive one participant holds behind the decision to enter the trilateral dialogue[12] and cooperation is of no greater importance as long as the motives will not interfere with the implementation of the Cooperation. The motives need to be dynamic and resilient. However, the motives of all three parties may but do not have to be identical (Grimm 2008).

Thirdly, there is a necessity of one common denominator even if it might be the smallest one. The interface of interest among the three participant countries is a central condition for a successful TC. Furthermore, it would be beneficial to identify potentials of the tripartite dialogue and determine possible limitations. It will be of great advantage to harmonize diverse efforts of implementation into forming a Trilateral Development Cooperation.[13]

Fourthly, the importance of political support needs to be verified . Trilateral Development Projects are dependent on the support on the respective governments. Yet, not only policy-makers need to be involved in the cooperation process, but necessary committees and panels have to be considered in the process as well. Agreements, such as the Paris Declaration[14] should also be discussed and applied.

Fifthly, transparency should be practised, so that communication is made easy, corruption can be avoided and fair play is guaranteed.

2.3 Potentials and Limits of Trilateral Cooperations

“Trilateral cooperation can be an effective way of bringing appropriate intermediate technology’ and ‘appropriate policy’ to developing countries.”[15]

The link between proper know-how and adquate policy constitutes the cooperative advantage that Trilateral Cooperations offer as opposed to previous bilateral assistance programs. In the past, consulting services put forth by established donors have, as seen in many cases, not used the suitable type of technical assistance or the services offered may have not been appropriate to the recipient country’s needs. Moreover, donor countries coming to a ‘developing country’ with their own type of technical expertise can create problems for the recipient country as there can be confusion and duplicity. As a result, the efficiency of the aid put in place remains questionable. These problems can be avoided by implementing a Trilateral Cooperation, by which an emerging country has been in the position of the recipient country itself and will be most likely be able to assist in a proper way. (Altenburg & Weikert 2006: 3)

Another advantage is that aid is tied to the donor country’s provision of goods and services. On an average, a developing country expert costs one-third of the cost of developed country experts at prevalent international rates.[16] However, if the expertise is carried out by anchor countries as well as by developed countries, the costs will be shared and generally less money will be invested. In this case Trilateral Development Cooperation can be a cost-effective way of promoting development cooperation.

Another issue related to tied aid, as argued in Mehta & Nanda (2005), is that when the donors tie up with local (donor’s home country) technical assistance providers, there is a possibility that monitoring by the donors may get relaxed as they are likely to develop alliances. A third country provider of technical assistance is far less likely to develop such a relationship with a donor and hence monitoring is likely to be more rigorous.

Hence, triangular cooperations may bring more accountability in the implementation of development programs. With the involvement of a third country technical assistance provider, it is likely that more information will be made public and will thereby increase overall transparency in aid administration thereby creating a positive impact on global Governance. With a transparent aid administration system, the impact of politics on aid would be far less ….(source!)

Limits of Trilateral Cooperations

Trilateralisation of development cooperations may dilute previous political support base and thus lessen the interest of the domestic constituency in overseas aid. They might also question the accountability in the aid administration when the stakeholders from the donor country are not involved. This would lead to a decrease of commitment in donor countries for development cooperation.

However, this can be countered by a type of Trilateral Development Cooperation, in which Civil Society Organisations (CSOs) from developing countries with high credibility can be involved in developed countries in appraising the stakeholders there about the utility of the aid that they are providing to the developing countries (Metha & Nanda 2005: 2)

It may also not always be easy for one developing country to accept technical assistance for capacity building from another developing country. There are political problems even among several developing countries that might thwart the process.

Another risk factor Mehta and Nanda state in 2005 is that there may be an unwillingness in sections of policy makers and other important stakeholders to accept ‘intermediate technology’ or ‘intermediate policy’ who may be in favour of leap-frogging The lure of trips to rich countries among sections of bureaucracy and the political establishment may also sabotage the process of trilateral development cooperation. LDCs very often do not find the idea of visiting another developing country for training or experience-sharing exciting enough. Even the fringe benefits of visiting a rich country are much higher for them.

2.4 The Beginning of Trilateral Cooperations within German Development Aid

Germany’s Development Aid Institutions are not singularly structured as they are in other European countries. Several Institutions such as KfW, DED, InWEnt and GTZ all function as German representatives in the field of development politics and provide assistance in developing countries. This might lead to different perceptions on what constitutes German Development assistance and which one represents the leading Development Aid institution.[17]

According to Tomecko (2008), GTZ[18] stated a prospective turnover of a little over €1.1 billion per annum and operate through 92 offices that serve 120 countries with about 12,000 employees working in 2,700 projects in the year 2008. About 25% of the mentioned turnover is currently in Asia. A wide geographic presence, access to development cooperation officials and the diversity GTZ projects, the organization is able to provide an infrastructure for Trilateral Cooperations.

On a global scale 14 operational trilateral projects are in place, so Temecko (2008); partners are namely (1) South Africa with Ethiopia, D.R. Congo, Lesotho, India on governance and technology, (2) Brazil with 10 countries in Latin America and Africa mainly in the area of AIDS, (3) Mexico with Guatemala, Ecuador and Dom. Republic on issues related to the environment, (4) Chile with several Latin American countries where we have a special fund for trilateral, (5) Indonesia with Timor Leste on national parks development, (6) China, with Chile, Vietnam and India mainly in the area of economic policy dialogue.

There are four major issues Trilateral Cooperations established through GTZ projects revolving around: Joint missions, the combined use and exchanges of experts, job training as well as education and fellowships and study visits development, micro-finance, SME promotion and health.

Financed are all projects by the parent ministry, the German Federal Ministry for Development and Economic Cooperation (BMZ) by providing additional budgets for activities like enhancing trilateral cooperation projects.

2.5 Lessons learned: Germany’s previous Trilateral Cooperations

The topic of Trilateral Cooperations is not new, the idea of Joint Development Initiatives in Germany dates back to 1974. (Souce) The demonstrated form of Cooperation has been implemented within Germany’s Development Cooperation with different levels of success. Within this study the first Trilateral Development Cooperation, under Egon Bahr, will be discussed intensively as it is the first Trilateral Cooperations in Germany and provides a range of lessons learned for further triangular engagement. In addition, two further Trilateral cooperation attempts are discussed to give a broader insight on what Cooperations have been put into practice and what can we learn from previous experiences.

2.5.1 The Failure of Germany’s First Trilateral Cooperation under Egon Bahr

„Im öffentlichen Bewußtsein lag Entwicklungshilfe, sobald davon überhaupt Notiz genommen wurde, ziemlich nah bei der christlichen Pflicht des Wohlhabenden, mitleidige Menschen in Not zu unterstützen. […] Unser Interesse mußte stärker betont werden, das Interesse an künftigen Märkten, an Prävention sozialer Spannungen. Es nützt uns, wenn andere etwas kaufen können, sichert sogar Arbeitsplätze.“[19] (Bahr, 1996: 467)

The political course of the German Sozialdemokratische Partei Deutschanlands (SPD)-politician Egon Bahr was considered as pragmatic in nature.[20] His famous speech in front of the Evangelical Academy Tutzingen in 1963 holds the title „Wandel durch Annäherung“ – Change through convergence[21]. It soon became not only his motto but also the program for West German foreign policy[22]. His concept of „change through convergence“ was closely connected to the concept of „peaceful coexistance“ and soon led him to, in his eyes, beneficial ideas of establishing trilateral cooperations.

Bahr’s idea was to bring together the oil money surplusses of the Arab States and the know-how of the industialized countries to engage together in development investments in developing countries.[23] In that, he saw two main advantages: (1) On a global scale the cooperation was supposed to put forth a release of the currency situation and (2) on a national scale the model was alleged to help ease the national finances of the Federal Republic of Germany.[24]

The following calculation serves as an explanation for establishing a Trilateral Cooperation. According to UN criteria for the second period of development aid (1971-1980) 0,7% of the Gross Domestic Product (GDP) should be used for Official Development Assistance (ODA). In 1974 the Federal Republic of Germany had already established 0,36%. Due to the oil price taxation the oil-producing developing countries received additional money in form of yields which were financed by the Federal Republic of Germany through their oil purchases. Therefore the West German GDP increased by 1,7 %.[25]

In recognizing an interplay between economic and development politics, Bahr tried with his model of Trilateral Cooperation to use the surplus of the oil countries to finance development aid in third nations which are non-oil-development countries. As an outcome for Germany he expected to add new jobs, which would lead to an increase in income as well as in demand.

For the developing country he expected that the infusion of know-how and technical assistance would result in a catch-up industrialization with an escalating number of employees. This would have a positive influence on the economic status and would also result in an increase in demand. Brisk trade relationships and the surmounting of the economic crisis were supposed to be the outcomes of his model of trilateral cooperations.

However, Nuscheler (2005) argues that some of Bahr’s assumptions are weak and would thererfore hinder the Trilateral Cooperation model to succeed. First of all, Nuscheler states the assumption that all developing countries would undergo similar development as would industrialized countries, also known as the catch-up industrialization.[26] Due to geomorphological and climatic preconditions, which are completely different than in western countries, a catch-up industrialization would be rather unlikely. Bahr saw the agricultural sector as the most important one for a country, because it has been of great importance for Germany. Conversely, for most developing countries, the agricultural sector was not the key, since the population rate by far outweighs the provision of food, even if all available fields would be in use.

Secondly, Nuscheler questions the assumption that better integration of the developing countries into the world market would stimulate a demand in developing countries as seen in industrialized countries. With the exception of the raw material sector, such demand would not come about in the development countries, Nuscheler (2005) points out. His explanation is that the developing countries have different structures of supply and demand, which is set according to their respective needs.

The third and last assumption of Bahrs Trilateral Cooperation Model, Nuscheler critisizes, is that economic growth will have a positive effect on all parts of the population of a developing country.

All three arguments, Nuscheler states, can be seen as reason for failure of Bahrs model of the Trilateral Cooperation and can be summarized as errors of the concept „development through growth“ (Nuscheler 2005: 78).

In his Trilateral Cooperation model, Bahr also used elements of the „basic need strategy“, which maintains that life is a fundamental need and therefore that development politics should take into consideration that education as well as health-care etc. should be provided for all parts of the population. (Bahr 96: 479). That might be one of the reasons why Bahr drew attention of German development politics to the poorest countries of Africa.

Egon Bahr tested his Trilateral Cooperation model for the first time in 1975 in South Sudan. German companies were supposed to build with money from Saudi Arabian streets and habours in the largest Afrian country, but Bahr’s ambitions were undermined by the Arabs. The Arabs demanded as a countermove from Germany that they will be part of the boycott against Israel and that Germany will exclude those firms from the Sudan-trade, who are in any trade relationship with Tel Aviv.[27] This and German Development Politics under Egon Bahr with the tendency to „more selfishness, less charity“ has been one of several diffuculties leading to the breakdown of Bah

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