Showing one face to the customer

What are the advantages and disadvantages of the fusion of the GTZ, DED and InWent from different perspectives?

Term Paper (Advanced seminar), 2010
12 Pages, Grade: 3,0



1. Introduction

2. Initial point and need of further restructuring

3. Advantages and Disadvantages of the fusion
3.1. From the point of view of the BMZ
3.2. From the point of view of the implementing organizations
3.3. From the point of view of the developing countries

4. Conclusion

1. Introduction

When dealing with German development cooperation one has to engage in the BMZ (German Federal Ministry for Economic Cooperation and Development) and its quiet complex structures. As there are two offices, the headquarter in Bonn and the other office in Berlin, with different responsibilities, each one divided into four Directorate-Generals which are made up of several divisions. The ministry has not the classical substructure of government agencies because the execution of the projects is done by the, so called, implementing organizations as there are: KfW (Development Bank), DEG (German Development and Investment Association), DED (German Development Service), GTZ (German Association for Technical Cooperation) and InWent (Capacity Building International). Not only is the structure of the BMZ kind of particular it is also an exception that Germany has its own Development Ministry and that Development Cooperation is not treated just as a part of foreign relations.

There have been a lot of discussions on the difficult structures of the BMZ. So in 2002 stared the restructuring of the implementing organizations by the fusion of DSE (Deutschen Stiftung für internationale Entwicklung) and CDG (Carl-Duisberg-Gesellschaft e.V) to InWent. But this was just the initial point of the restructuring process, so in the coalition agreement between CDU and FDP of 2009 was declared further restructuring with the aim of a higher effectiveness of German Development Cooperation. This restructuring should be done in the first years of the actual legislative period.

In our seminar we were investigating on the possible change in Development Policy from Aid to International Cooperation. So the emerging question referring to the BMZ structure is if restructuring the implementing organizations leads to more cooperation or to formulate it more general what are the advantages and disadvantages of the planned fusion of GTZ, DED and InWent and for whom. It is indispensible to look analyze it from the point of view of the different involved actors, as there are the BMZ, the implementing organizations and of course the developing countries. Who is the one who profits by it the most? Does the restructuring lead to more efficiency of German Development Cooperation? The aim of this paper is to try to answer these questions. This is going to be done by first describing the initial situation of the implementing organizations before the fusion of DSE and CDG and answering the question why there still is the need of further restructuring (2.) and then analyzing the possible fusion of GTZ, DED and InWnet from different point of views (3.), so I can finally make a conclusion (4.).

2. Initial point and the need of further restructuring

When in 2006 the PricewaterhouseCoopers (PWC) report demonstrated that there is a need of restrucuring the implementing orgaizations of the BMZ it should not have surprised because since nearly a decade the BMZ and the committee for economic cooperation of the Bundestag agreed on the necisstiy of doing something against the strong fragmentation and as well against the to some extend counterrotating processes of the implementing organizations. So it became obvious that for ensuring international competetiveness and exploit all the potential of German Developemt Cooperation there has to be a chance in the structure of the implementing organizations. (Nuscheler 2006)

The red-green coaltion already started the process of restructuring whith the fusion of DSE and CDG to InWent in 2002 . But this was just one step and the coaltition still did not have the heart to touch the general structures of Financial Cooperation (FC) and Technical Cooperation (TC) and that is what the PWC report critiziced. (Nuscheler 2006)

In the 16th legislative period it was requiered by the coalition contract of CDU/CSU and SPD that the reform of the implementing organizations goes on with the fusion of GTZ and KfW, so the fusion of the core institutions of TC and FC. But the fusion was not carried out which led to a discussion about the ablility to lead and control of the BMZ. It was mentioned that the implementing organizations are to independent of the BMZ and that the BMZ needs to find ways to accomplish what it wants opposite to the implementing organizations. (Maihold 2007)

So the actual situation is that there are still five different implementing organizations. The actual government of CDU and FDP gave up the plan of fusioning GTZ and Kfw but agreed on the merge of GTZ, DED and InWent in their coalition agreement. The new organization will bei named Deutsche Gesellschaft fur internationale Zusammenarbeit (German Agency for International Cooperation). It will have its headquarters in Bonn and Eschborn, the oficces of InWent will last as they are. The new organization will be 100% in hands of the state and will work exclusively requested by the BMZ. (BMZ: 4-6)

So far the plan of the Government but still there are a lot of questions not responded and the responsilbes are still working on an explicit plan how the merge will be carried out. In this process the cooperation of the implementing organizations is requested by the BMZ.

3. Advantages and Disadvantages of the merge

3.1. From the point of view of the BMZ

Since quiet a long time it was the aim of the BMZ to stop Develompent Cooperation in the way of, in a figurative sense, a watering can and to start Development Cooperation all of a piece. So from the point of view the restructuring of the implementing organizations is the central reform to archieve this goal.

For the BMZ it is important to allocate their resources in an efficent and effective way. The german multiplicity of implementing organizations detracts possibilities of coordination and efficiency as well as it takes up a lot of resources. Internationally seen, as already mentioned, is the structure of the German Development Cooperation very particular and also the OECD's Development Assistance Committee (DAC) adiveses the BMZ to reform its structures. The resources spent in the organizational structure would be better invested in development projects. Another problem from the point of view of the BMZ is that there are a lot of double structures within the implementing organizations and that is another lack of efficiency. A really important fact in favor of the reform is the Paris Decleration on Aid Effectiveness (2005), Germany signed, so when the multiplicity of implementing organizations is a factor for less effectiveness there has to be a change. The reform of the implementating organizations could be based on the point of harmonization in the Paris Declaration[1]. The problem is that German Development Cooperation is not acting as one in the developing countries although they lodge together in the so called "German Houses". (BMZ: 3-4/ Nuscheler 2006)

For the BMZ surely it is necessary to underline their reforms with economic savings which will follow up the reform and through reducting the double structures, organizanional as well as personal, the reform will contribute to more cost- effectiveness. Nevertheless the aim is to keep on with the multiplicity of instruments but is is important to bunch these and create new strucutres so these new structures work cost-effective and future-oriented. Another crucial aspect for the BMZ is to have more control over organizations and to gain possibilities of policymaking and organization. The BMZ seeks to be the only agenda-setter in German Development Cooperation. Thereby the BMZ expects to ensure a coherent and uniform appearance of German Develoment Cooperation in the partner countries and on international floor. The reform should lead to show "one face to the costumer" (Beerfeltz 2010) and going algong with this help to establish more transparancy. Until now all three organizations have its own procedures after the reform they will have to do it all the same way, they will also work on the same goals with the same strategies and thereby tranparency is encouraged. With the reform the BMZ seeks to establish Germany as a dynamic and innovative partner in international development policymaking. (Beerfeltz 2010/ BMZ: 3-4)

The reform should mark the inicial point of a new realtion between government and the implementing organizations. The government need more power and influnce on the implementing organizations because as well known until now KfW and GTZ were acting as monopoly companies in their areas. After the reform there will be a strict distinction between policymaking and implementation, so the BMZ can point out his position. From the point of view of the BMZ the reform is about showing that German Development Cooperation is made not only in Germany but by Germany and that it is clear that the umbrella organization of German Develoment Cooperation is the BMZ. (Beerfeltz 2010/ BMZ: 3-4)

Concluding it can be asserted that from the perpective of the BMZ the reform will bring exclusively advanteges. But this is logical as the reform was decided by the coalition and is now going to be planned and implemented by the actaul minister Dirk Niebel and his staff.


[1] "Harmonisation - Donor countries coordinate, simplify procedures and share information to avoid duplication." (OECD)

Excerpt out of 12 pages


Showing one face to the customer
What are the advantages and disadvantages of the fusion of the GTZ, DED and InWent from different perspectives?
Free University of Berlin
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ISBN (eBook)
ISBN (Book)
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development policy, BMZ, GTZ, InWent, DED
Quote paper
Luisa Friederici (Author), 2010, Showing one face to the customer, Munich, GRIN Verlag,


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