Netherlands

At a glance

ODA funding trends

  • The Netherlands is the seventh-largest donor country on the Organisation for Economic Cooperation and Development’s (OECD’s) Development Assistance Committee (DAC), spending US$5.4 billion on official development assistance (ODA) in 2020 (in 2019 constant prices). This corresponds to 0.59% of its gross national income (GNI).

  • The 2020 development budget was revised in September of 2020 and increased by almost €300 million (US$336 million) due to additional spending on the COVID-19 response.

  • The third Cabinet of Prime Minister Mark Rutte, in office 2017-2021, committed to adding €2.8 billion (US$3.1 billion) in ODA between 2019 and 2022. Rutte was reelected for a fourth term in March of 2021 and the government coalition is forming now through a process that will likely take months.

Strategic priorities

  • The Dutch government traditionally focuses on four thematic development priorities: 1) security and the rule of law, 2) water management, 3) food security, and 4) sexual and reproductive health and rights (SRHR) including efforts against HIV/AIDS.

  • Advancing gender equality and strengthening the position of women and girls, including on issues related to SRHR, is a cross-cutting theme of Dutch development policy.

  • In September of 2020, with the publication of the 2021 development budget, the Dutch government announced its intention to double its expenditure on fighting climate change, specifically fighting deforestation and land degradation.

 

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Outlook

  • In the March 2021 elections, Mark Rutte of the center right’s Volkspartij voor Vrijheid en Democratie (People's Party for Freedom and Democracy; VVD) was elected Prime Minister for a fourth consecutive term, with Development Minister Sigrid Kaag’s progressive D66 party taking a surprise second place. This is seen as good for the future of ODA funding.

  • A Dutch Advisory Council on International Affairs advisory report on foreign policy for the next Cabinet called for the Netherlands to make a greater commitment to the fair global distribution of COVID-19 vaccines and to increase the budget for development cooperation to at least 0.7% of GNI.

  • The current caretaker government will present the spring budget in June of 2021 with any final changes to the 2021 budget after final recalculations of the gross domestic product (GDP) shifts from the previous year. The caretaker government will not be able to make any major policy shifts.

Policy Priorities

Focus is on SRHR, security and the rule of law, water management, and agriculture

The objectives and priorities of Dutch development policy are laid out in the policy document ‘Investing in Global Prospects: For the World, For the Netherlands’ (also referred to as the ‘BHOS policy’). Released in May 2018 under Foreign Trade and Development Cooperation Minister Sigrid Kaag, the document stresses that the country’s development cooperation should combat the root causes of poverty, migration, terrorism, and climate change within the framework of the UN Sustainable Development Goals (SDGs).

To do so, the government works on four overarching, closely linked main objectives:

  1. Preventing conflict and instability;

  2. Reducing poverty and social inequality;

  3. Promoting sustainable inclusive growth and climate action worldwide; and

  4. Promoting economic growth of the Netherlands.

These objectives are implemented through a focus on four traditional thematic priorities, chosen based on the added value and expertise of the Netherlands. These priorities remain unchanged under the May 2018 BHOS policy:

  1. Sexual and reproductive health and rights (SRHR) including HIV/AIDS;

  2. Water management;

  3. Agriculture, including food security; and

  4. Security and the rule of law.

The Netherlands places a strong emphasis on the interlinkages between these priorities in its policies and programs. Existing efforts across these sectors have increased their focus on “unstable” regions as defined in the BHOS: the West African Sahel, the Horn of Africa, and the Middle East and North Africa (MENA) region.

Global health, and particularly SRHR, has traditionally been a major priority area of Dutch development cooperation. In 2019, SRHR funding represented 85% of total Dutch bilateral health funding (reproductive health care: 58%; population policy and administrative management: 11%; family planning: 10%; STD control including HIV/AIDS: 5%; personnel development for population and reproductive health: 1%). In 2017, the Dutch government launched the global initiative ‘She Decides’ to support organizations focused on SRHR and family planning (see sector ‘Global Health’). Since then, the initiative has grown into a worldwide movement, comprising of global champions and activists working to advance women’s rights.

The fight against climate change is another key issue for the Dutch government and Parliament has committed to stepping up its support to climate financing in low-income countries. As such, according to the BHOS, the Netherlands utilizes €400 million (US$448 million) of ODA resources yearly for climate-related expenditures. The Dutch Fund for Climate and Development (DFDC) was launched at the end of 2018 and will provide €160 million (US$179 million) to climate protection projects between 2019 and 2022. Climate financing was also increased by €20 million (US$22 million) in 2019 and will be augmented by a further €40 million (US$45 million) annually from 2020 onwards.

According to the government’s current predictions, climate financing within the development budget will rise to €480 million (US$537 million) annually by the end of Rutte’s third cabinet’s term of office in 2021. Following the federal elections of March of 2021, a government formation period has begun, which typically lasts for many months. The policy priorities of the next governing coalition for 2021-2025 will be determined after the new government is formed and Cabinet positions are filled.

ODA Breakdown

The Netherlands channels the majority of its ODA bilaterally

The Netherlands mainly provides official development assistance (ODA) through bilateral channels: 65% (US$3.4 billion) in 2019, well above the average of the Organisation for Economic Cooperation’s (OECD’s) Development Development Assistance Committee (DAC) average of 59%. This included US$767 million in earmarked funding to multilateral organizations (i.e., funding channeled through multilaterals for specific regions, countries, or themes), which is reported to the OECD as bilateral ODA.

The Netherlands provides the largest proportion of its ODA through the public sector: US$1.1 billion in 2019 or 33%. NGOs and civil society followed close behind with US$941 or 27%, above the DAC average of 20%. The ‘Dialogue and Dissent’ policy framework for 2020-2024, published in June of 2019, gives special attention to the role of CSOs as independent advocates and influencers around the world, and the promotion of women's rights, gender equality, and inclusion.

The Netherlands prioritizes government and civil society and health and populations

In 2019, the Netherlands spent 20% (US$688 million) of its bilateral ODA on activities in the government and civil society sector. Funding to this sector saw a 14% increase between 2018 and 2019.

14% (US$494 million) of Dutch bilateral funding was used to cover the costs of hosting refugees within the Netherlands following a major 20% decrease since 2018. These cuts are in keeping with a multiyear decline after a high of US$1.4 billion in spending in this sector in 2015.

ODA for health and populations accounted for 9% of the Netherlands’ total bilateral ODA in 2019. Funding to this sector decreased by 19% since 2018 (due to a bump in funding that year), falling back down to US$299 million, approximately even with funding levels in 2016 and 2017.

The Netherlands disbursed all of its ODA as grants in 2019.

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Dutch ODA has a strong focus on low-income countries and targets 'sub-Saharan Africa'

The majority (70%) of the Netherlands’ bilateral ODA is not allocated by region since funding for CSOs, earmarked funding for multilaterals, and costs of hosting refugees cannot be allocated to a specific country or region. When excluding this funding, the Netherlands traditionally prioritizes ‘sub-Saharan Africa’ (meaning the countries of Eastern, Western, Central, and Southern Africa, as designated by the African Union). The region received 63% of bilateral ODA allocated by region in 2019.

Dutch development tends to focus on the lowest-income countries. Again, a large proportion is not allocated by income group. When only considering funding allocated to specific countries, 66% of bilateral ODA in 2018 went to low-income countries.

In November of 2018, the Dutch Ministry for Foreign Affairs and Development Cooperation of the Netherlands sent a letter to Parliament providing details on the shift in the geographical focus of Dutch development cooperation. The renewed Sexual and Reproductive Health and Rights (SRHR) Partnership Fund will focus in large part on the upscaling of programs in Ethiopia and Mali, and on the establishment of new programs in Niger, Burkina Faso, and Uganda. Dutch contributions to multilateral funds such as United Nations Population Fund (UNFPA), Gavi, the Vaccine Alliance, and the Global Fund to Fight AIDS, Tuberculosis and Malaria are not geographically earmarked; the funds will be disbursed according to the organizations' criteria and country lists, and therefore the changes in focus countries do not affect them.

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The Netherlands selects its focus regions and countries based on three elements:

  1. The urgency and need for development cooperation;
  2. The added value of Dutch efforts; and
  3. The potential for alignment with Dutch thematic priorities.

Following the federal elections of March of 2021, a government formation period has begun, which will likely last for many months. The policy priorities of the next governing coalition will be determined after the new government is formed and cabinet positions are filled.

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Dutch core funding to multilaterals largely goes to the EU and the UN

In 2019, the Netherlands channeled 35% of its ODA as core funding to multilaterals (OECD DAC average: 41%), amounting to US$1.9 billion. The largest recipients of core contributions to multilateral organizations were EU institutions with US$621 million or 33% of the Netherlands’s multilateral ODA and UN agencies with US$517 million or 28% of multilateral ODA (UNOCHA: US$108 million; UNDP: US$88 million; UNHCR: US$43 million). In addition to these core contributions, the Netherlands channeled 15% (US$767 million) of its total ODA through multilaterals in the form of funding earmarked for specific thematic priorities or regions (reported to the OECD as bilateral ODA). Thus, in total, 50 of Dutch ODA in 2019 was implemented by multilateral organizations (see figure), above the DAC average of 55%.

Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.

For more granular and up-to-date development finance data on the Netherlands, including information on where and in which sectors it is spending both ODA and non-ODA funds, please consult the IATI d-portal. IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation.

Main Actors

Minister for Foreign Trade and Development Cooperation leads on strategy; embassies administer bilateral ODA

Prime Minister Mark Rutte (People’s Party for Freedom and Democracy, VVD) was reelected in 2021 for a fourth consecutive term in office, after leading a coalition government since 2017.
Despite a mediocre response to the COVID-19 crisis and a racially motivated tax scandal that led to the early resignation of his government earlier this year, incumbent Mark Rutte’s People’s Party for Democracy and Freedom (VVD) won the election. Sigrid Kaag, the current Foreign Trade and Development Minister, and leader of the center liberal party D66 finished second with an unexpected 15% of the votes. The results have led to a deeply fragmented Parliament, with a record 17 parties obtaining seats. Rutte will need the support of (at least) three other parties to form a coalition. The government formation process is expected to take months; in the meantime, the outgoing government is serving in a caretaker capacity.

The Ministry of Foreign Affairs (MFA) currently under Kaag’s leadership, defines priorities for Dutch development policy. Within the MFA, the Directorate-General for International Cooperation (DGIS) is responsible for designing and coordinating the implementation of development policy. The Prime Minister leads the government’s executive council, the Council of Ministers, which proposes policies and regulations. The mandates of the Ministers for Economic Affairs and Climate Policy (Stef Blok, VVD) and Foreign Trade and Development Cooperation (Sigrid Kaag) have significant overlap, which helps ensure policy coherence.

Unlike many other donors, the Netherlands does not have a development agency; Dutch embassies implement Dutch bilateral programs in partner countries according to four-year Multi-Annual Strategic Plans (MJSPs), developed by the MFA for all partner countries. New Multi-Annual Strategic Plans, now renamed Multi-Annual Country Strategies, have been developed and will cover the period from 2019 to 2022. Summary factsheets are available for each country.

The Netherlands Organisation Chart

Parliament scrutinizes development policy and budget allocations and can amend the government’s draft budget bill annually; debates in November/December can lead to significant changes to the ODA budget. Dutch civil society organizations (CSOs) play an active role in Dutch development cooperation; the development CSO umbrella association, Partos, represents over 100 organizations that engage with the Parliament and the MFA to influence policy and funding decisions. Many CSOs implement their own programs in low-income countries and are funded by the Dutch government and through private donations. Since the end of 2015, program funding for CSOs has been sharply cut, and the MFA has been placing a larger focus on strategic partnerships and advocacy. Funding for CSOs is channeled through the funding scheme ‘Dialogue and Dissent: Strategic partnerships for lobby and advocacy’ (2020- 2024) with the overarching goals of strengthening of a civil society that expresses the voices and needs of citizens, and the establishment of an inclusive and sustainable society overall based on a human rights approach.

The government has divided grants for civil society in the new policy framework into seven specific themes:

  1. Climate mitigation and adaptation;
  2. Increasing sustainability of value chain;
  3. Food security, sustainable water management, and water, sanitation, and hygiene (WASH);
  4. Women's rights and gender equality;
  5. Freedom of expression and freedom of religion and belief;
  6. Equal rights for LGBTIQ populations; and
  7. Security and the rule of law.

Budget Structure

The Minister for Foreign Trade and Development Cooperation manages more than half of total ODA

In 2021, the Netherlands’ ODA budget stands at €4.5 billion (US$5.1 billion), accounting for 0.59% of gross national income (GNI). According to the state budget presented for 2021, ODA is projected to increase by 2% between 2020 and 2024, reaching €4.7 billion (US$5.3 billion) in 2024. The ODA/GNI ratio is projected to decrease to 0.52% by 2024, however, a fact that has elicited harsh criticism from civil society advocates.
The Homogeneous Budget for International Cooperation (HGIS) is a budgetary structure within the national budget, consolidating the ODA allocations within the foreign policy budgets of individual ministries.

The Minister for Foreign Trade and Development Cooperation (MFTDC), a Cabinet-level minister within the Ministry of Foreign Affairs (MFA), manages the largest share of Dutch ODA (66% in 2021). On top of the funding managed by the MFTDC, other departments within the MFA disburse another 14% of the development budget. The Ministry of Finance provides 1% of the total ODA budget, largely made of funding to development banks. The remaining 19% is mostly made of ODA-reportable costs of hosting refugees in the Netherlands (11%) and contributions to the EU development budget (8%).

The Foreign Trade and Development Cooperation budget is organized around thematic areas (see table). The envelopes for these thematic areas are usually split further into grants and contributions to multilaterals and other organizations working in that thematic area.

Overview: The Netherland's 2021 draft ODA budget

millions

millions
US$ (2019)

Foreign Trade and Development Cooperation 2,944 3,351
Sustainable economic development, trade and investment 410 458
Sustainable development, food security, water, and climate 734 822
Food security 321 359

Water

194

217

Climate 219 245
Social issues 743 832
SRHR, incl. HIV/AIDS, of which: 402 450
Women's rights and gender equality (incl. contributions to UNWOMEN) 52 58
Other (mainly CSO support) 289

324

Peace, security and sustainable development 748 837
Humanitarian assistance (incl. contributions to UNOCHA, ICRC) 369 414
Reception and security in the region and cooperation on  migration 162 181
Security and rule of law development 217 243
Multilateral cooperation and other areas 309 329
Multilateral cooperation 172 193
Other poverty reduction policy 68 76
Open for distribution (due to changes in GNP and/or attributions) 69 77
Ministry of Foreign Affairs 634 710
Ministry of Finance (funding for development banks) 44 49
Other ministries 64 72
Other ODA expenses 850 951
EU budget 346 387
Costs for hosting refugees in the Netherlands 504 564
Total ODA budget (gross) 4,535 5,076


Sources: Homogenous Budget for International Cooperation (HGIS-Nota 2021) and Rijksbegroting 2021

Budget Process

Ministerial budget ceilings are set in April or May; allocation decisions are made between May and July

The Netherland´s Budget Cycle
  • Ministries develop initial budget proposal: From February to March, the ministries, including the Ministry of Foreign Affairs, develop their initial budget proposals for the coming year and decide on spending increases or decreases for the main policy areas. The Minister for Foreign Trade and Development Cooperation and the Minister of Foreign Affairs are the main decision-makers during this process. The thematic departments of the Directorate-General for International Cooperation (DGIS) are also important stakeholders, as they are responsible for designing and coordinating the implementation of Dutch development policy.
  • Ministries update their current budgets: Between March and May, ministers update the budgets of the current year to reflect any changes that have occurred since the draft budget was presented in the previous autumn. This is known as the ‘spring budget’. While the Parliament has the right to amend the budget, changes are rarely made. The ‘spring budget’ is published on June 1 at the latest every year.
  • Cabinet decides on ministerial budgets: In August, the Cabinet decides on ministerial budgets for the following budget year. Important decision-makers are the Minister for Foreign Trade and Development Cooperation, the Minister of Foreign Affairs, and the Minister of Finance.
  • Draft budget presented to Parliament: On the third Tuesday of September, the government presents its budget bill to the Parliament.
  • Parliament debates and approves budget: The ODA budget is debated and amended by the Committee on Foreign Trade and Development Cooperation of the House of Representatives at the end of November. Parliamentary debates in November/December can lead to significant changes to the draft budget. In 2018, for example, Parliament amended the budget to increase the Dutch contribution for United Nations Populations Fund (UNFPA) and the Global Financing Facility (GFF), by €10 million (US$13 million). The budget must be approved before the end of the year.