CENTRE FOR STRATEGIC AND INTERNATIONAL STUDIES

Development Policies and Trends in Germany

MPA Batch 3 , Group 1

 Group (1) : Group Member listKo Saw Naing Lin SweKo Zaw Min Min MaungKo Chan Myae AungMa Htin Hnin KhineMa Thet Thet MonMa Eindra Yar DeiveMa Khin Soe San

OUTLINES OF THE PRESENTATION

Research Questions Aims and Objectives of the paper Introduction (Background history of the

country , brief presentation on economic and political situation)

Chapter (1) Political and development situation of Germany

Chapter (2) Role of Government in development Chapter (3) Main causes of development of

Germany Findings and Recommandations

RESEARCH QUESTIONS

What are the driving factors or forces for Germany to become developed nation?

What is the Sustainable Development Strategy of Germany?

What are the current challenges for Germany to sustain their development success?

AIMS AND OBJECTIVE To learn about how government shape the

Germany in the aspect of economic and human development.

To understand the determinants or factors for Germany to become a developed country.

To understand Germany Economy and lessons learned of Germany’s road to development.

To learn the current situation of Germany to sustain their development success.

INTRODUCTIONGermany Flag and Country Map

INTRODUCTIONGermany after WW II

Germany Now

BACKGROUND HISTORY OF THE COUNTRY The country we know as Germany today was throughout

history mostly an association of states After the revolutions of 1848, the first German Parliament

was created. After a victory in the French-Prussian war in 1871, a

unification of the German states was attained, which initiated a period of great advances in various areas, the economy, the political area and the military.

In 1914, when World War broke out, the fall of the Hohenzollern dynasty started as Germany was defeated.

The winning nations impose the Versailles Treaty and the German territory splits in two once more.

There was an economic crisis and the German National Socialist Workers’ Party (Nazi) obtains the power doing away with democracy. Nazi Germany lasted 12 years (1933-1945). Hitler got the full control succeeding also the head of state.

BACKGROUND HISTORY OF THE COUNTRY By 1945, Germany was under the control of the Allied Powers in Europe:

the United States, the USSR, Britain and France. In 1949 Germany split into two countries, with the occupied zones

belonging to the three Western powers merging to form the Federal Republic of Germany (FRG), while the Soviets established the German Democratic Republic (GDR).

Built in 1961, the Berlin Wall became known as a symbol of communism.

It physically divided the Communist West Germany and Democratic East Germany.

Germany has the fourth largest economy in the world, and reforms over the past decade have enabled job creation and driven unemployment to one of the lowest rates among advanced economies, currently at around 6 percent.

Although country has rapidly prosper in economic and development, a study says Germany's birth rate has slumped to the lowest in the world, prompting fears labour market shortages will damage the economy.

BRIEF PRESENTATION ON ECONOMIC AND POLITICAL SITUATION OF GERMANYEconomic of previous times

Germany before 1800 was heavily rural, with some urban trade centers.

In the 19th century,it began a stage of rapid economic modernization,led by a heavy industry .

By 1900,it has the largest economy in Europe a factor that play a major role in its entry into WW 1 and WW II.

Economy of Nazi Germany During Hilter era (1933-1945)the economy developed a

hothouse prosperity ,supported with high government subsidies to those sectors that tended to give germany military power and economic autarky,that is economic independent from the global economy.

1950,Germany overtook Britain in comparative productivity level for the whole economy primarily as a result of trends in services rather than trends in industries.

BRIEF PRESENTATION ON ECONOMIC AND POLITICAL SITUATION OF GERMANYCurrent Economic

After reunification in 1990,East Germany had to move away from a Command economic system and slowly toward a Mixed system.

Germany has a type of mixed economic called a social market economy which has developed after WWII and it includes a variety of private freedom combined with centralized economic planning and government regulations.

Social market economy rested on three main principles:1. Individual freedom rested on the liberal ideal of individuality.2. Solidarity meaning that individual is part of a larger society

consisting of mutual dependencies.3. Subsidiary being a role of the state to shape the relation

between individuality and solidarity .It should give the highest priority to individual rights and ensure that what can be done on the part of the individual should be done by it and not by the state.

BRIEF PRESENTATION ON ECONOMIC AND POLITICAL SITUATION OF GERMANYEconomic Freedom Snapshot

2016 Economic Freedom Score 74.4 Economic Freedom Status Mostly free Regional Ranking 8th in Europe Notable Successes Rule of Law and Open Markets Overall Score Changes Since 2012 +3.4 

BRIEF PRESENTATION ON ECONOMIC AND POLITICAL SITUATION OF GERMANYPolitical Situation

Germany's commitment to regulatory efficiencies and open market policies continues to be bolstered by the effective protection of property rights.

The rule of law is well-maintained and a strong tradition of minimal tolerance corruption is firmly institutionalized.

Rule of Law: Although government transparency is high and anti-corruption enforced effectively. The law fully protects properly owned by foreigners and secured interests in both chattel and real property are recognised and enforced.

Regulatory Efficiency: The regulatory regime aids dynamic business formation. No minimal capital is required to launch a new business. The government has cut subsidies for renewable energy sources but maintains price controls in other economic sectors such as rental housing.

Open Markets: EU members have a 1 percent average tariff rate. Foreign and domestic investors are generally treated equally under the law.

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.1 Political Situation of Germany

The Federal Republic of Germany is a federal parliamentary republic, based on representative democracy.

The Chancellor is the head of government, while the President of Germany is the head of state which holds a ceremonial role but substantial reserve powers.

Executive power is vested in the Federal Cabinet and federal legislative power is vested in the Bundestag and the Bundesrat.

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.1 Political Situation of GermanyMajor Parties in Germany:

Christian Democratic Union (CDU) Christian Social Union (CSU) Social Democratic Party (SDP) Free Democratic Party (FDP) The Left Alliance 1990 (The Greens)

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.1 Political Situation of GermanyFederal legislative power :

Federal legislative power is divided between the Bundestag and the Bundesrat.

The Bundestag is directly elected by the German people, whilst the Bundesrat represents the regional states.

Judicial Branch : The Judiciary in Germany is totally independent. The organisation of courts is traditionally strong,

and almost all state actions are subject to judicial review.

Germany has a powerful Constitutional Court.

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.1 Political Situation of GermanyChancellery is in Berlin and Constitutional Court is in Karlsruhe.

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.1.2 Recent politics of Germany

Red Green Coalition Christian Democrat Comeback Grand Coalition 2005-09 CDU-CSU-FDP Coalition 2009

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.2 Germany Economy

Germany has the largest population in the European Union with 81.8 inhabitants in January, 2010.

Germany is the 3rd largest country in terms of immigrants from around the world.

Germany is known for its well established social security system which stems from the flourishing German economy. It ranks 4th in terms of nominal GDP and 5th in terms of purchasing power in the world.

Germany is the world’s second largest trader both in terms of imports and exports.

Germany is also the hub of global scientific and technological developments.

The graph in the next slide shows how the real growth rate has performed since 2007 till 2009. (in percentage)

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.2 Germany EconomyThe graph below shows how the German economy performed since 2007 till 2009.

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.2 Germany Economy

Germany is part of the G-7, Group of Seven, G-8, Group of Eight, and G-20, Group of Twenty.

At the core of Germany's success and influence lies its currency.

The main export and import partners of Germany are: France, US , Netherlands, UK, Italy , Spain , Russia.

Germany’s main exported and imported commodities are: Machinery , Vehicles , Chemicals, Metals and manufactures , Foodstuffs, Textiles.

The real strength of Germany trade has been its productive workforce which according to 2009 figures amounted to 43.51 million.

The manufacturing industries employed almost 29.7% of the work force and the growth helped Germany trade in terms of automobiles and machinery.

CHAPTER (1) POLITICAL AND DEVELOPMENT SITUATION OF GERMANY1.2 Germany Economy

Germany’s industry: The Germany industry sectors employ as much as 29.7% of the total work force.

Germany’s manufacturing: Manufacturing laid the foundation for the German economy.

Indisputably, Germany produces some of the finest automobiles in the world besides ships and tools.

The German industry sectors are well developed and poised to offer greater value around the world, thereby fortifying the country’s economy even in financially turbulent times.

CHAPTER (2) : ROLE OF GOVERNMENT IN DEVELOPMENT

2.1 The Federal Government Role The German federal government plays a

crucial role in the German economy, sometimes directly and sometimes indirectly through the effects of other policies on the economy.

Unlike the Japanese government, there is no single ministry that attempts to direct industrial government and competitiveness, but government policy can have wide-ranging effects because of the many offices that play a role.

CHAPTER (2) : ROLE OF GOVERNMENT IN DEVELOPMENT

2.2 The Chancellor The way the chancellor and his office, the Chancellory, deal with the

economy depends very much on the incumbent's interests and personal style. For example, under Helmut Schmidt (1974-82), who was very interested in economic matters, the Chancellory shaped, directed, and coordinated the economic policy of the entire government economic apparatus.

He has used the political, not the bureaucratic, structure to make policy, working through the CDU/CSU and the FDP or through personal contacts.

Germany was the first to introduce social insurance programs including universal healthcare, compulsory education, sickness insurance, accident insurance, disability insurance, and a retirement pension.

Moreover, the government's universal education policy bore fruit with Germany having the highest literacy rate in the world – 99% – education levels that provided the nation with more people good at handling numbers, more engineers, chemists, opticians, skilled workers for its factories, skilled managers, knowledgeable farmers and skilled military personnel.

CHAPTER (2) : ROLE OF GOVERNMENT IN DEVELOPMENT

2.3 The Minister of Finance and the Minister for Economy

In the cabinet, roles are more fixed, although they might change in accordance with personalities and political parties.

He is responsible for the federal budget. The minister of finance also accompanies the

chancellor to the annual financial summits and is the main German spokesperson in the meetings of the Group of Seven (G-7)

He is thus in a position to manage not only domestic but also international financial policy for Germany and to coordinate the two.

CHAPTER (2) : ROLE OF GOVERNMENT IN DEVELOPMENT

2.4 The BundeskartellamtThe Bundeskartellamt (Federal Cartel

Office) is the institution specifically instructed and empowered to prevent a return to the monopolies and cartels that periodically controlled much of the German economy between the 1870s and 1940s.

The Bundeskartellamt has faced a particularly difficult task in the integration of the East German and West German economies.

CHAPTER (2) : ROLE OF GOVERNMENT IN DEVELOPMENT

2.5 Interesting points from the SustainableGovernance Indicators 2016 for Germany

Economic Policies :With a stable, growing economy, Germany falls into the top ranks internationally (rank 5) with regard to economic policies. Its score on this measure has declined by 0.2 points since 2014. The government has reversed a course of liberalization in favor of greater regulation, including a minimum wage and pension-system expansions.

Social Policies : With a well-developed welfare system, Germany receives a high overall ranking (rank 12) in the area of social policies. Its score on this measure is unchanged relative to 2014.A renewed focus on equity and quality has improved once-worrisome education outcomes.

Environmental Policies : As a leader in the renewable-energy sector, Germany falls into the top ranks (rank 5) in the area of environmental policies. Its score on this measure has improved by 0.2 points relative to 2014. The country has launched a phase-out of nuclear power, but has balked at imposing a carbon tax to reduce use of emissions-intensive coal.

Democracy (Quality of Democracy) : Reflecting a stable system founded on the rule of law, Germany’s score for democracy quality places it in the top ranks (rank 5) internationally. Its score on this measure has improved by 0.2 points overall since 2014.Parties receive public and private funding, with some transparency concerns.

Governance :(a) Executive Capacity : Despite some inefficiencies during crisis periods,

Germany falls into the upper-middle ranks (rank 14) with respect to executive capacity.

(b) Executive Accountability : Despite a few recent oversight challenges, Germany’s overall score for executive accountability places it in the top ranks (rank 6) worldwide.

CHAPTER (3) : MAIN CAUSES OF BEING DEVELOPED NATIONS (OR) DEVELOPMENT OF GERMANY.

3.1 Reviewing the overall Germany development German development policy concentrates on the key sectors of education,

health, sustainable economic development, good governance, rural development and climate and resource protection.

Funds are deployed selectively in these areas in cooperation with the partner countries. Good governance means constructive interaction between the state and society, which guarantees citizens’ political participation, respect for human rights, social welfare and the rule of law.

It also means effective governmental institutions and responsible behavior by the state in terms of political power and public resources.

Good governance in any sector is a prerequisite for development measures to have a sustainable effect.

Human rights are the guiding principle of German development cooperation. Because of good education system and more educated person, from 1895 to

1907, the number of workers engaged in machine building doubled from half a million to well over a million.

Germany is the third largest exporter in the world with 1.13 trillion euros ($1.28 trillion) in goods and services exported in 2014. The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Exports account for 41% of national output.

CHAPTER (3) : MAIN CAUSES OF BEING DEVELOPED NATIONS (OR) DEVELOPMENT OF GERMANY.

3.1 Reviewing the overall Germany development Germany is the richest country in Europe, and the second richest in

the world after the United States The consensus view is that Germany is firing on all cylinders,

making its economic model something worthy of emulation for large economies. Sweden is often touted as a similar example for small open economies. The reality, however, is that for every exporter, there must be an importer; So, to the degree that German economic success is built on exports, it is also built on global imbalances.

Germany for building a recovery based not just on exports, but on capital investment and saving. One reason that Germany is a manufacturing and export powerhouse is because it has invested in those businesses. Certainly, wage restraint over the past decade by German labour unions has kept German companies in the mix. But, at heart, the German export story is about investment in human and physical capital. And that is definitely worthy of emulation.

CHAPTER (3) : MAIN CAUSES OF BEING DEVELOPED NATIONS (OR) DEVELOPMENT OF GERMANY.3.2 Economic stimulus package

An Economic Stimulus package is an attempt by the government to boost economic growth and lead the economy out of a recession or economic slowdown.

This economic stimulus package to Germany very broadly includes infrastructural investments, social benefits, tax concessions and soft loans.

A substantial portion of this German economic stimulus package, of about 17 – 18 billion, is in form of investments to be made in highway construction, educational spending, and tax cuts for individuals and businesses.

3.3 Ripple effect of Germany’s good education policy The government's universal education policy bore fruit with Germany having

the highest literacy rate in the world – 99% – education levels that provided the nation with more people good at handling numbers, more engineers, chemists, opticians, skilled workers for its factories, skilled managers, knowledgeable farmers and skilled military personnel.

3.4 Poverty reducing The German government sees development policy as an investment in the

future that is in everyone’s interest. Its objective is the sustained fight against poverty and structural deficiencies. The Millennium Declaration and the eight Millennium Development Goals

(MDGs) derived from it are the main international frame of reference for poverty reduction worldwide and for shaping sustainable global development. This is the focus of German development policy as well.

Reducing worldwide poverty is also in Germany’s interests.

FINDINGS AND RECOMMENDATIONS

Findings Germany is well manage and maintaining its resources. Govenment policy on education development and human

development is curiously good highest literacy rate in the world – 99% which lead to become developed country.

Concrete policy on development and partnering with others countries to get more cooperation in sustainable development.

Germany is practicing social market economy and it includes a variety of private freedom combined with centralized economic planning and government regulations such as government commitment to regulatory efficiencies and open market policies continues effective protection of property rights. Its means Germany is well established social security system which stems from the flourishing German economy.

Rule of Law and anti-corruption enforced effectively both foreigners and citizens’ property.

FINDINGS AND RECOMMENDATIONS

Findings The government provide subsidies in some area and

maintains price controls in other economic sectors. Being a developed country, Germany is 3rd largest country

in terms of immigrants from around the world Germany has a powerful Constitutional Court and

traditionally strong. So that that every person may file a complaint to that court when his or her constitutional rights.

Based on 2009 unemployment rate, it’s grew from 7.8% to 8.2% because of industrial slow down to lesser imports for productivity.

Lowest birth rate in the world.

FINDINGS AND RECOMMENDATIONS

Findings Being a developed country, Germany is 3rd largest country

in terms of immigrants from around the world Germany has a powerful Constitutional Court and

traditionally strong. So that that every person may file a complaint to that court when his or her constitutional rights.

Based on 2009 unemployment rate, it’s grew from 7.8% to 8.2% because of industrial slow down to lesser imports for productivity.

Lowest birth rate in the world.

FINDINGS AND RECOMMENDATIONS

Recommendations Germany is the seventh most visited country in the world, with a

total of 407 million overnights during 2012. Domestic and international travel and tourism combined directly contribute over EUR43.2 billion to German GDP. Including indirect and induced impacts, the industry contributes 4.5% of German GDP and supports 2 million jobs (4.8% of total employment). It is recommended Germany should maintain its tourism industry to maintain environment, historical places, create job opprotunities and promote German GDP.

To reduce crime rates, human trafficking, terrorist and other social affects, Germany government should develop policy and implementation plan for controlling migrants as Germany is 3rd largest country in terms of immigrants from around the world. On the other hand, Syrian refugees coming to Germany country and relocating these refugees will be very costly. Merkel (the German chancellor) appeared to bow to political pressure within Germany to work to place limits on the number of refugees entering the country. Because, the Paris terrorist attacks created security fears about the flood of refugees.

FINDINGS AND RECOMMENDATIONSRecommendations

Government should develop inclusive attractive policy to reduce low birth rates. Despite economic prosperity, Germany´s biggest threat for future economic development is the nation's declining birthrate which is among the lowest in the world. The is prevalent in parts of society with higher education are responsible for low fertility rates. As a result, the numbers of workers will decrease and the government spending needed to support pensioners and healthcare will increase if the trend is not reversed. Plus, many no longer consider children a central part of life.

Currently, most of well-known Germany products are export to other countries as well as all the German well-known high tech raw materials are inport from other countries. On the other hand, the eurozone economy continues to falter and will continue to be a pressing concern for Germany in 2016 because of Eurozone deflation. Germany has the strongest and most stable economy in the eurozone. However, that means Germany is often required to provide economic assistance to the rest of the region. Further European economic issues could begin to have a negative impact on Germany's economy. However it is, the recommendation goes to Germany is mainly focus/emphasis on its nation economic stability and sustainable first.

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