India rising

At his previous job as general secretary of the liberal, market-oriented Free Democrats (FDP) while his party was in opposition, Dirk Niebel proved he knows how to get attention. And as Germany's new minister for economic cooperation and development, he's showing he hasn't lost the talent.

With his early announcement that China and India no longer qualify for foreign aid, Niebel once again made the headlines and drew criticism from political opponents who said his plans to scrap payments for both nations were simply a populist media stunt.

Experts, however, have agreed with Niebel's assessment, but urged a thoughtful approach to phasing out the aid payments.

"China is probably not a developing country that needs development aid anymore," Joerg Himmelreich, an Asia analyst with the German Marshall Fund, told Deutsche Welle.

"It makes sense if you focus your argument on the fact that China has accumulated $2 trillion in foreign exchange reserves," agreed Howard Loewen, a German Asia specialist. "The argument goes that this is an indication that China has enough resources to take care of its own development problems, and if you take into consideration that there has been a strong growth of the economy for almost a decade, this country can take care of its own development problems."

Delicate phase-out

While the decision to end aid, especially to China, sparked a vigorous debate about the usefulness of foreign aid in general, the policy itself is actually not new. In fact, Germany's last administration, when the development ministry was headed by the Social Democrats, started a phase out of foreign aid to China.

What's left is 28 million euros ($41 million) worth of so-called technical assistance in this year's budget, which will be ended as well, according to the ministry. Ongoing projects and agreements, however, would be finished and honored, the ministry added. That, Himmelreich noted, is important, because the Chinese are "very sensitive about cuts in financial aid for the country."

Aside from the planned phase-out of aid for China and India, Germany's overall foreign policy toward Asia with a focus on China, India and Japan is unlikely to experience any major shake-ups under the new center-right government.

German foreign policy, regardless of which party controls the foreign and economic cooperation ministries, tends to be based on the principle of continuity and isn't geared toward abrupt shifts in focus. The broad outlines of foreign policy are also being drawn up in the chancellery, which in recent years has played an increasingly strong role in international affairs vis-a-vis the foreign ministry.

Focus on India

Still, experts hope for a reorientation of some aspects of Germany's Asia strategy under the new administration.

"I think especially the potential of India as a global actor for energy stability and security has been neglected and underestimated," said Himmelreich. "We should really look much more to India than before. India, as well as being one of the future global actors is a democracy, has huge potential, which many experts consider even more profitable and fruitful than that of China."

So far, Himmelreich said, India and China have been largely viewed in economic terms. Now it's time to expand the scope of German foreign policy to include questions of global security with China and India. Afghanistan, he said, is a good example, "We should reflect much more on the potential role India can play with its relation to Pakistan in the stabilization of the Afghan conflict."

The increasing focus of US foreign policy toward the Asia is another development that demands Germany's attention. US President Barack Obama's trip to Asia and his participation in the APEC meeting is a "clear indication that the US wants to play a role in the regional cooperation process," Loewen said.

Germany and the EU need to consider the United States' heightened interest in Asia since it will have global policy implications. "The US pushes multilateral visions, its own vision and wants to make a difference in the region," said Loewen.

A policy area that has already been pushed by the previous government, but that should become an even higher priority is environmental policy in Asia, according to Gabriele Vogt, an Asia and Japan expert at the University of Hamburg.

"Just think about China and its continuous development of new factories everywhere," she told Deutsche Welle. "There's a lot to be done in terms of awareness raising and implementation of environmental protection policies in China."

Leaving a mark

While Germany's international partners in Asia can expect a continuation of Berlin's general foreign policy approach toward the region with some new aspects, this could make it difficult for the Free Democrats who now hold both the foreign and the economic development ministry to leave a lasting mark.

What's more, two of the party's main themes - its strong market orientation and an equally strong human rights platform - could prove tough to square in a foreign policy arena where global powers such as China are economically important, but have at the same time a troubling human rights record.

How the FDP will attempt to solve this problem is unclear, Loewen said.

"I see this as a process and it is not easy to see at the moment which position will take the dominant stance in this concept," he said.

Author: Michael Knigge

Editor: Rob Mudge