Development cooperation is delivering ‘more prosperity and jobs’ in Germany than previously estimated, according to a new study by the University of Göttingen, which was commissioned by KfW.
As the study found, every euro Germany invests directly in a partner country through development cooperation is associated with an increase of €2.50 in German goods exports. This is partly due to income generated in recipient countries, which increases local demand and imports.
Job creation
The study also found that the additional exports linked to development cooperation contribute to creating and securing around 380,000 jobs in Germany across the manufacturing and service sectors.
On a sector-by-sector basis, the strongest export effects were recorded in the mechanical engineering, transport, information technology, chemicals and electrical industries.
‘Economic opportunities’
“The results show that German development cooperation leads to noticeable export effects,” commented Brigitte Réthier, member of the executive board of the KfW Group.
“Our domestic economy also benefits from this, and with it many jobs in Germany. The contribution to sustainable development in partner countries is linked to economic opportunities and interests.”
KfW added that the findings show that development cooperation can contribute to German trade relations while supporting economic opportunities in partner countries. The organisation also said development cooperation can strengthen the resilience of German foreign trade against geopolitical and economic risks.
‘Investments in sustainable infrastructure and climate protection improve the market opportunities for German companies when expanding energy and transport systems in partner countries,’ KfW noted.
The study examined the relationship between payments made under German development cooperation and German exports of goods and services to partner countries between 2005 and 2024. Read more here.
