Netherlands

At a glance

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).

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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. In December of 2021, the Dutch Minister of Foreign Trade and Development Cooperation, Tom de Bruijn, informed Parliament that the budget had increased by a further €80 million (US$92 million).  

The fourth government of Mark Rutte, the Dutch Prime Minister since 2010, was sworn in in January of 2022. According to the coalition agreement, the Netherlands will be adding €407 million (US$466 million) for development cooperation annually which will bring ODA levels up to a yearly average of €5.1 billion (US$5.8 billion) from a baseline of €4.7 billion (US$5.3 billion) in the past legislature.

Policy Priorities

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 policy on Foreign Trade and Development Cooperation (BHOS): 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.   

For more details see: Investing in Global Prospects: For the world, For the Netherlands

ODA Breakdown

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 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 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 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%.

Main Actors

Prime Minister Mark Rutte’s party, the liberal party (VVD), won the March 2021 elections in the Netherlands, followed closely by the center liberal party (Democrats 66 or D66) led by Sigrid Kaag, the former Foreign Trade and Development Minister. Following a record 272 days of coalition talks and a full 360 days since the ‘Rutte III’ government resigned amid a national scandal, the new cabinet was sworn in in January. Rutte’s fourth government is for the second time be composed of his own liberal-conservative VVD party and the more social-liberal and pro-European D66, the Christian-Democrat CDA, and the more social-Christian ChristenUnie parties. The new cabinet’s top priorities are health care, climate, education, housing, and the COVID-19 crisis. 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.  

 

The Netherlands Organisation Chart

Dutch 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 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: climate mitigation and adaptation; increasing sustainability of value chain; food security, sustainable water management, and water, sanitation, and hygiene (WASH); women's rights and gender equality; freedom of expression and freedom of religion and belief; equal rights for LGBTIQ populations; and 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 2022 (and subject to parliamentary approval), ODA is projected to increase by 2% between 2022 and 2026, reaching €5.6 billion (US$6.3 billion) in 2026. The ODA/GNI ratio is projected to decrease to 0.56% by 2026.

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.