- The Netherlands spent US$5.0 billion on net official development assistance (ODA) in 2016, making it the sixth-largest donor country (in 2016 prices). This corresponded to 0.65% of its gross national income (GNI).
- ODA decreased from 0.75% of GNI in 2015 to 0.65% in 2016, due to decreased costs for hosting refugees in the Netherlands. As these costs were lower than expected in 2016, funding originally budgeted for hosting refugees was reallocated to development programs.
- The Dutch government has sharply cut ODA since 2010 as part of its austerity measures. The government announced in 2012 that it would cut ODA by €750 million below the 0.7% of GNI target for the 2014-2016 period, and keep ODA structurally €1 billion below the 0.7% target from 2017 onwards. However, these plans may be revised once a new coalition government is formed.
- The Netherlands focuses its ODA on four thematic priorities: 1) security and the rule of law, 2) water, 3) food security, and 4) sexual and reproductive health and rights (including HIV/AIDS). Other focus areas include climate protection, humanitarian aid, private sector development, women’s rights, and gender equality.
- Geographically, Dutch development assistance is concentrated on sub-Saharan Africa and low-income countries.
- On March 15, 2017, the Netherlands held general elections. The ongoing coalition talks provide an opportunity to advocate for increased funding for development, and shape the strategic direction of Dutch development policy.
- All political parties have called for an increased development budget in their election manifestos, except for the winning conservative VVD party and the far-right PVV, which came in second place in the election. However, the VVD stated that it will not govern with the populist PVV. The VVD will need at least three other parties to form a majority, which presents opportunities to generate more resources for development programs, particularly for Dutch thematic priorities.
the big six
- How much ODA does the Netherlands provide?
ODA was inflated in 2015 due to increased costs for hosting refugees
In 2016, the Netherlands was the sixth-largest donor country among members of the OECD’s Development Assistance Committee (DAC), spending US$5.0 billion on net ODA (in 2016 prices; US$5.0 billion in 2015 prices).
Dutch ODA stood at 0.65% of gross national income (GNI) in 2016 (seventh among DAC countries), a share expected to decrease to 0.56% in 2017. In 2012, the government decided
The Netherlands takes the costs incurred to host refugees in their first twelve months in the country from the ODA budget. This has reduced the funding available for ‘regular’ development programs, especially since portions of the funding to cover these costs in 2016 and 2017 have been frontloaded and will be financed from ODA budgets for the period 2016 to 2020. The ODA-reportable costs for hosting refugees peaked at US$1.3 billion in 2015. In 2016, these costs (US$460 million) were lower than expected, which has resulted in a reallocation of US$511 million that was originally budgeted for refugees to the development assistance budgets for 2016 and 2017. On top of this, another US$34 million that had previously been budgeted to cover costs associated with hosting refugees has also been reallocated to the Emergency Relief Fund, which supports victims of conflict and natural disasters and runs from 2014 to 2017. For 2017, costs for hosting refugees are budgeted at US$998 million. The Labor Party (PvdA), the Green Party (GroenLinks), and the Reformed Party (SGP) all call for ‘pure’ ODA, which neither includes refugee costs in- country nor climate financing. The Christian Union (CU) would like to cap refugee costs at a maximum of €250 million of ODA (US$277 million).
- What are the Netherlands’ strategic priorities for development?
Focus is on four thematic priorities
The objectives and priorities of Dutch development policy are outlined in the strategy paper: ‘A World to Gain: A New Agenda for Aid, Trade and Investment’ (released in 2013). The Netherlands focuses its development assistance on four thematic priorities: 1) security and the rule of law, 2) water, 3) food security, and 4) sexual and reproductive health and rights (SRHR, including HIV/AIDS). Other priorities include climate protection, humanitarian aid, private sector development, women’s rights, and gender equality. The Netherlands puts a strong emphasis on the interlinkages between these priority themes in its policies and programs. These priorities are based on the ‘added value’ and expertise of the Netherlands, and large thematic shifts are thus not expected after the elections, though changes in focus within the thematic areas are possible.
Since late 2012, the government has refocused development assistance with the aim of increasing alignment between development cooperation and foreign trade and has involved the private sector more strongly in development programs. Furthermore, the Dutch government has reduced funding to cross-cutting themes, such as good governance and education, to multilateral organizations working on issues that are not Dutch thematic priorities for ODA, and to funding for CSOs. The priorities are expected to largely remain in place after the March 2017 elections, though there might be changes in focus within them.
The Netherland’s key development priorities:
- Sexual and reproductive health and rights (including HIV/AIDS)
- Security and the rule of law
- Food security
Increased funding for humanitarian aid and refugees; decreased funding for CSOs
According to OECD data, the Netherlands channeled more than two-thirds (73%, or US$4.3 billion) of its total ODA bilaterally in 2015. However, nearly one- third (31% or US$1.3 billion) of this was used to cover the costs of hosting refugees in-country, making it by far the largest expenditure area of Dutch bilateral ODA.
The second-largest share of bilateral ODA was allocated to ‘government and civil society’ (17%). However, since the end of 2015, funding for CSOs has been sharply cut and replaced by the funding scheme “Dialogue and Dissent. Strategic partnerships for lobby and advocacy” (2016-2020, with a maximum of €185 million (US$ 205 million) per year. This puts an emphasis on advocacy work (as opposed to provision of services and goods) and strategic partnerships.
The Netherlands has stepped up its support for humanitarian aid and is a strong advocate for this at both the United Nations (UN) and European Union (EU) level. The country allocated 11% of bilateral ODA to humanitarian aid in 2015. Between 2014 and 2015, the humanitarian aid budget grew by 88%. This increase was driven by the creation of the Emergency Relief Fund (€570 million or US$632 million for 2014 to 2017) to support victims of conflict and natural disasters. This financing comes on top of the humanitarian aid budget line. The Netherlands pledged €125 million (US$139 million) at the Syria Conference for 2016, of which €75 million (US$83 million) was earmarked for emergency aid and €50 million (US$56 million) for stimulating education and employment for refugees. Mid 2017 an additional €40 million (US$44 million) for humanitarian aid was made available by the Dutch government. Of this, €11.5 million (US$12.7 million) will go the UN’s Central Emergency Response Fund (CERF); the Netherlands agreed with CERF that this additional contribution should address the needs of women and girls in the area of sexual and reproductive health in crisis situations. €5 million (US$5.5 million) has been made available for SRHR programs in humanitarian settings in 2017. After 2017, spending on humanitarian aid is projected to slightly decrease, as the Emergency Relief Fund will come to an end.
Global health, and particularly SRHR, is another priority. Health accounted for 6% of Dutch bilateral ODA in 2015. However, total ODA to health is much higher as the Netherlands channels more than half (52% in 2015) of health ODA as multilateral ODA. This brings total health ODA to US$496 million in 2015, or 9% of Dutch ODA, which is on par with the OECD’s Development Assistance Committee (DAC) average. The Dutch government has recently reaffirmed its leadership on SRHR by launching the global initiative ‘She Decides’ to support family planning and civil society organizations in response to the decision by the new United States (US) administration to cut funding to organizations that support access to or provide information about safe abortion. (See question six: ‘How is Dutch ODA spent?’ for more details.) For further information on global health, see “Deep Dive: Global Health”.
- Who are the main actors in Dutch development cooperation?
Minister for Foreign Trade and Development Cooperation leads; no implementation agency
Prime Minister Mark Rutte (People’s Party for Freedom and Democracy, VVD) led a coalition government with the Labor Party (PvdA) until the elections in March 2017. As the VVD won the most seats in the general election, it is likely that Rutte will continue to serve as Prime Minister of the new government. The Ministry of Foreign Affairs (MFA) defines priorities for Dutch development policy. Up until the elections, the MFA was headed by Bert Koenders (PvdA). The Minister for Foreign Trade and Development Cooperation (MFTDC), Lilianne Ploumen (PvdA), who is part of the MFA, leads the MFA’s work on development cooperation.
Within the MFA, the Directorate-General for International Cooperation (DGIS) is responsible for designing and coordinating the implementation of development policy. Unlike many other donor countries, the Netherlands does not have an implementing agency. The Dutch embassies are in charge of strategic planning and the administration of bilateral programs.
THE NETHERLANDS' DEVELOPMENT COOPERATION SYSTEM
The role of Parliament is to scrutinize development policy and budget allocations. Parliament can annually amend the government’s draft budget bill. Parliamentary debates in November/December can lead to significant changes to the ODA budget.
Dutch civil society organizations (CSO) play an active role in Dutch development cooperation. The development CSO umbrella association is Partos, representing over 100 such organizations. They lobby the Parliament and the MFA. Many CSOs implement their own programs in developing countries, and are funded by the Dutch government and through private donations. In 2015, 25% of the country’s bilateral ODA was channeled through CSOs. However, since the end of 2015, program funding for CSOs has been sharply cut and a larger focus has been placed on strategic partnerships and advocacy.
- How is the Dutch ODA budget structured?
The Minister for Foreign Trade and Development Cooperation manages more than half of total ODA
The 2017 draft ODA budget, presented in September 2016, stands at €4 billion (US$4.4 billion). It foresees that the Minister for Foreign Trade and Development Cooperation, who is part of the Ministry of Foreign Affairs, will manage the largest share of ODA (53%), followed by the Minister of Foreign Affairs (14%).
The Foreign Trade and Development Cooperation budget is organized around thematic areas (see table below). The envelopes for these thematic areas are usually split further into funding lines for bilateral country programs, grants and contributions to multilaterals, and other organizations working in that thematic area.
Overview: the 2017 ODA budget
Foreign trade and development cooperation 2,140 2,373 Sustainable trade and investment 398 441 Sustainable development, food security and water 659 731 Food security, of which: 348 385 Grants 172 191 Contributions to (international) organizations 176 195 Water management, drinking water and sanitation 195 216 Natural resources, climate change 116 129 Social progress 726 805 SRHR, incl. HIV/AIDS 415 460 Bilateral country programs 84 93 Grants (incl. Gavi, PDP's) 169 187 International organizations (incl. Global Fund, UNFPA & UNAIDS) 164 182 Women's rights 54 60 Other (mainly CSO support) 257 285 Peace and security 468 519 Strengthened frameworks for development -111 -123 Multilateral organizations (UN agencies) 135 150 Other -246 -273 Ministry of Foreign Affairs 558 619 Ministry of Finance (funding for development banks) 19 21 Multilateral development banks 19 21 Other ministries 59 65 Other ODA expenses 1,230 1,364 Eu budget 330 366 Refugee costs 900 998 Total ODA budget 4,005 4,441
Sources: HGIS Nota 2017 and Rijksbegroting 2017
- What are important decision-making opportunities in the Dutch annual budget process?
Ministerial budget ceilings are set in April/May; allocation decisions are made between May and July
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 (e.g., food security). The Minister for Foreign Trade and Development Cooperation and the Minister of Foreign Affairs are the main decision-makers during this process, and 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: During the spring, ministers update the budgets of the current year to reflect any changes that have occurred since the draft budget was presented in the previous fall. 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 1 June at the latest every year.
Cabinet decides on ministerial budgets: In August, the cabinet decides on ministerial budgets for the following budget year. ODA allocations can be influenced at this time. 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 2015, for example, Parliament amended the budget in order to increase the Dutch contribution to Gavi, the Vaccine Alliance, by €50 million(US$ 55 million). The budget has to be approved before the end of the year.
- How is Dutch ODA spent?
All ODA is delivered as grants; role of CSOs in implementation is decreasing; stronger focus on private sector
The Netherlands channels more than two-thirds of its ODA bilaterally (73% in 2015). Core contributions to multilateral organizations made up 27% of ODA in 2015. The largest recipients were the EU institutions (US$543 million), the World Bank (US$395 million), UN agencies (US$365 million), regional development banks (US$128 million), and the Global Fund to Fight AIDS, Tuberculosis and Malaria (US$61 million). In addition to these core contributions, the Netherlands channeled 11% of its ODA through multilaterals in the form of funding earmarked for specific thematic priorities or regions (this is reported to the OECD as bilateral ODA). Thus, in total, 38% of Dutch ODA in 2015 was implemented by multilateral organizations (see figure).
All of the Netherlands’ bilateral ODA is allocated as grants (as opposed to loans). There is no Dutch implementation agency. Instead, Dutch embassies are responsible for implementing bilateral programs with partner countries. Civil society organizations (CSOs) play an important role in implementation, channeling 25% of bilateral ODA in 2015. However, at the end of 2015, the largest CSO funding system (€1.9 billion or US$2.1 billion for 2011‐2015) came to an end, with cuts mainly affecting direct program implementation funding. The government established a new funding scheme “Dialogue and Dissent. Strategic partnerships for lobby and advocacy” (2016-2020, with a maximum of €185 million or US$205 million per year), which puts an emphasis on advocacy work (as opposed to provision of services and goods) and strategic partnerships between 25 CSOs and the Minister of Foreign Trade and Development Cooperation. Between 2018 and 2020, €3 million (US$3.3 million) a year will become available for extra support to CSOs that work on service integration and education related to sexual and reproductive health and rights (SRHR) and HIV/AIDS.
Private sector development is an important focus area for the Netherlands. The Dutch Good Growth Fund (DGGF) has a €300 million (US$333 million) budget for 2017 (double the €150 million (US$ 166 million) available for 2015 and 2016) and provides customized finance to micro-, small-, and medium-sized enterprises from the Netherlands, emerging markets, and developing countries. The government uses this fund as a tool to promote investments in trade with emerging markets and developing countries. Public-private partnerships also play a major role in implementing Dutch development cooperation policy. These partnerships are between the government, the private sector, research institutions, and CSOs; they and are referred to as the “Dutch Diamond Approach”.
Who are Netherlands’ ODA recipients?
Dutch ODA has a strong focus on low-income countries and targets sub-Saharan Africa
The Netherlands places a priority on sub-Saharan Africa. Sub-Saharan Africa received 18% of the Netherlands’ bilateral ODA between 2013 and 2015, which is below the OECD Development Assistance Committee (DAC) average of 25%. However, 70% of bilateral ODA is not allocated to specific countries (this mainly includes funding for CSOs, earmarked funding for multilaterals, and costs for hosting refugees). When excluding these funds, therefore, sub-Saharan Africa accounted for 60% of bilateral ODA between 2013 and 2015.
Dutch development policy focuses on the poorest countries. When only considering funding that is allocated to specific countries, more than two-thirds (70%) of bilateral ODA between 2013 and 2015 went to low-income countries (LICs) (15% if total bilateral ODA is considered). Seven of the top 10 recipients of Dutch bilateral ODA and 11 of the Netherlands’ current 15 partner countries are LICs.
The Netherlands selects its partner countries based on poverty level, their potential for alignment with Dutch thematic priorities –where the Netherlands’ expertise is of greatest value – the potential for regional interventions (countries in a region where the Netherlands is already present), and where root causes of displacement can be tackled. Since 2011, the Netherlands has reduced the number of its partner countries from 33 to 15. Dutch priority countries are divided into two categories:
- Fragile countries with which the Netherlands maintains ‘aid relationships’ (Afghanistan, Burundi, Mali, the Palestinian Territories, Rwanda, South Sudan, and Yemen),
- Countries with which the Netherlands maintains ‘transitional relationships’ (Bangladesh, Benin, Ethiopia, Ghana, Indonesia, Kenya, Mozambique, and Uganda) to foster economic growth.
The exception to this categorization is Syria, which is not designated as a priority country, yet is still a top recipient of Dutch ODA due to increased humanitarian aid to address the conflict and support those affected. As of 2020, middle-income countries Kenya, Ghana, and Indonesia will cease to be partner countries. The relationship between the Netherlands and these countries will continue, however, and will be focused on trade, investments, and political collaboration. As the Netherlands will continue to have 15 partner countries, three new country partnerships will be established with three least-developed countries (LDCs) in the Sahel in Africa. The Netherlands’ partnership with Rwanda will change from an aid relationship to a transitional relationship in 2020.
How is bilateral funding programmed?
Embassies are key players in strategy development and program implementation
The Ministry of Foreign Affairs (MFA) develops Multi-Annual Strategic Plans (MJSPs) for all partner countries. MJSPs cover a period of four years, although interim adjustments are possible. Current MJSPs run from 2014 to 2017. Strategic plans are based on a combination of Dutch development priorities, development priorities of the partner country, and the potential for Dutch investment returns. In close consultation with relevant thematic departments at the MFA, Dutch embassies establish programs.
How will the Netherlands’ ODA develop?
- The Netherlands has implemented massive ODA budget cuts since 2012. The government agreed to cut ODA by €1 billion (US$1.1 million) below the 0.7% of GNI target from 2017 onwards. However, the March 2017 elections might change this trajectory, as the majority of parties have called for increases in ODA in their election manifestos.
- The Netherlands uses its development budget to cover the costs of hosting refugees in the donor country, which puts pressure on the funding available for development programs. Costs for hosting refugees in the Netherlands will continue to constrain the funding that is available for ‘regular’ development programs in the coming years, as parts of the funding to cover these costs in 2016 and 2017 have been frontloaded and will be financed from future ODA budgets until 2020.
What will the Netherlands’ ODA focus on?
- Dutch ODA currently focuses on four thematic priorities: 1) security and the rule of law, 2) water, 3) food security, and 4) sexual reproductive health and rights (including HIV/AIDS). These priorities are expected to largely remain in place after the March 2017 elections, though there might be changes in focus within them.
- Strengthening private sector development, public-private partnerships, and, more generally, linking development cooperation with Dutch foreign trade interests are also likely to remain a focus for the Netherlands
What are key opportunities for shaping the Netherlands’ development policy?
- On March 15, 2017, the Netherlands held general elections. The current post-election and coalition-building talks provide an opportunity to advocate for increased development budgets as well as to shape Dutch development policy and its thematic priorities for the coming years.
- All political parties have called for an increased or stabilized development budget in their election manifestos, except for the two parties with the most votes: the conservative VVD and far-right PVV. However, the VVD has stated that it will not govern with the PVV, and will need at least three other parties to form a majority. The new coalition government will thus present opportunities to generate more resources for development programs, particularly for thematic priority areas.