At a glance
ODA funding trends
The Netherlands is the seventh-largest donor country, spending US$5.3 billion on official development assistance (ODA) in 2019. This corresponds to 0.59% of its gross national income (GNI). ODA decreased by 4% between 2018 and 2019.
The current government, in office since 2017, committed to compensating for the development budget cuts made by its predecessor by adding €2.8 billion (US$2.7 billion) in ODA between 2019 and 2022.
In 2017 costs for hosting refugees in the Netherlands almost doubled, increasing from 9% of ODA in 2016 (US$479 million) to 17% in 2017 (US$894 million). These costs decreased in 2018 to 10% of ODA (US$574 million) and again in 2019 to 9% of ODA (US$507 million). In the 2020 budget, they stand at US$498, or 11% of the total ODA budget. The 2021 budget allocates $453 million, or 9% of the total ODA budget to refugee costs.
The Netherlands’ 2020 development budget was revised in September 2020 and increased by almost €300 million (US$354 million) due to additional spending on the COVID-19 response. The ODA-to-GNI ratio increased to 0.61% in 2020 because of special COVID-19 measures and the measures put in to compensate for the declining GNI.
The Dutch government 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.
Following the May 2018 policy note, ‘Investing in Global Prospects: For the World, For the Netherlands’, the Netherlands has shifted its geographic focus towards unstable regions of the West African Sahel, the Horn of Africa, North Africa, and the Middle East.
Advancing gender equality and strengthening the position of women and girls is a cross-cutting theme of Dutch development policy, and the government has taken leadership on the matter, including on issues related to SRHR.
In September 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.
The Netherlands was part of a group contribution of US$459 million with other EU member states to the COVAX Facility, which aims to ensure universal access to the eventual COVID-19 vaccine.
The Netherlands will host an online Climate Adaptation Summit on January 25, 2021. This climate-neutral virtual conference, spearheaded by Dutch Prime Minister Mark Rutte, will bring together global leaders to discuss adaptation needs for climate change. The summit aims to accelerate actions initiated by the Global Commission on Adaptation.
Despite a recommendation from the Advisory Council on International Affairs (AIV), that the Netherlands allocate a sum of €1.0 billion (US$1.2 billion) to the immediate response to COVID-19 in the world’s poorest countries, the Cabinet made only €500 million (US$590 million) available from general resources and frontloaded €464 million (US$548 million) from the upcoming years’ budgets.
The next general election for members of the Dutch House of Representatives is scheduled for March 17, 2021. Results will determine Parliament’s development and foreign policies.
The Netherlands is the 7th-largest donor in absolute terms; ODA-to-GNI share has decreased
The Netherlands is the seventh-largest donor country among members of the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC). Total ODA amounted to US$5.3 billion ODA in 2019 (current prices; US$5.4 billion in constant prices). The percent of Dutch gross national income (GNI) being spent as ODA fell by 0.04% between 2018 and 2019, from 0.62% to 0.59% and to 0.61% in 2020. Forecasts suggest this will fall to 0.55% in 2021 and to 0.52% by 2024.
ODA peaked in 2015, largely driven by the high costs of hosting refugees in the Netherlands. ODA decreased to US$5.3 billion in 2017 before rising again to US$5.7 billion, mainly driven by increased contributions to the World Bank group.
The costs of hosting refugees in the Netherlands – partly reportable as ODA – have fluctuated heavily over the past five years, peaking in 2015. In 2019, they stood at a low US$507 million, accounting for 9% of ODA. The Netherlands takes some of the costs incurred by hosting refugees from its development budget, which in the past has reduced funding available for global development, a cause of controversy in Dutch parliament since 2015. In 2016 and 2017, the government decided to draw €1.2 billion (US$1.4 billion) from future ODA budgets to cover these costs.
According to ‘HGIS nota 2021’, ODA is projected to stand at €4.6 billion (US$5.6 billion) by 2022; this could change depending on the outcome of the upcoming election and on the longer-term scale of the effects of COVID-19 on the Dutch economy and ODA plans.
In March 2020, the Dutch Parliament approved a motion to preserve the development budget from financing a part of the package for the domestic response to the COVID-19 crisis. The motion emphasized the need to preserve ODA funding for global health and food security. This ring-fenced budget, will partially come at the expense of frontloading it from future year’s budget (which has been done in previous crises).
Projections from the International Monetary Fund (IMF) from April of 2020 suggest that the Netherlands’ gross domestic product (GDP) will fall by almost 8% in 2020, and that same month, the Dutch Minister of Finance noted that GNI could fall as much as 12%. More recent estimates, however, put GDP contraction at just 5%. Despite the economic contraction, the Netherlands was able to maintain its 2020 development budget with the compensations from the national COVID-19 rescue package, which devoted a small proportion to ODA. The budget for the following year was also supposed to be ringfenced, however, the latest budget note reveals that is set to be reduced by €124 million (US$146 million) compared to the figure quoted for 2021 in the HGIS nota published in 2019.
In late April 2020, the Dutch government requested guidance from the Advisory Council on International Affairs (AIV) for calculating what would be an effective international response from the Netherlands. This report, published on May 11, recommended the Netherlands allocate a sum of €1.0 billion (US$1.2 billion) to the immediate response to COVID-19 in the world’s poorest countries.
The cabinet instead decided to make €500 million (US$590 million) available from general resources as well as to frontload €464 million (US$548 million) from the upcoming years (2022 and beyond), which will put higher pressure on future development budgets.
The current coalition government, in office since October 2017, is committed to compensating for the cuts made by the previous coalition government. To do so, it will gradually increase development funding: according to the coalition agreement, an additional €1 billion (US$1.1 billion) will be added to the budget over the 2019-2022 period, and the €1.2 billion (US$1.4 billion) that had been set aside to cover costs of hosting refugees in the Netherlands will be reallocated for development programs in partner countries. According to ’HGIS nota 2019’, by 2022 ODA is projected to stand at US$5.8 billion. Despite these increases, in relative terms, net ODA as a percentage of GNI is projected to decrease from 0.6% in 2017 to 0.54% in 2022, according to the May 2018 policy note ‘Investing in Global Prospects: For the World, For the Netherlands’.
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
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 substantiates the Coalition Agreement that was published in November 2017. It stresses that the country’s development cooperation, as an integral part of foreign policy, should combat the root causes of poverty, migration, terrorism, and climate change within the framework of the United Nations (UN) Sustainable Development Goals (SDGs).
To do so, the government works on four overarching, closely linked main objectives:
- Preventing conflict and instability;
- Reducing poverty and social inequality;
- Promoting sustainable inclusive growth and climate action worldwide; and
- Promoting economic growth of the Netherlands.
Gender equality and strengthening the position of women and girls is a cross-cutting objective of the policy. 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:
- Sexual and reproductive health and rights (SRHR) including HIV/AIDS;
- Water management;
- Agriculture, including food security; and
- 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 North Africa and the Middle East. The policy also outlines increased funding across various areas including climate protection, education, humanitarian assistance, private-sector development, and women’s rights and gender equality.
Global health, and particularly SRHR, is a major priority area of Dutch development cooperation. In this area, large amounts of funding are channeled through multilateral organizations: in past years, it has represented around half of the Netherlands’ total funding for health. 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. Additionally, it announced its first contributions to the Global Financing Facility (GFF) for Every Woman Every Child in 2018, pledging €59 million (US$68 million) for 2018 to 2023. The Netherlands committed €156 million (US$194 million) to the Global Fund to Fight AIDS, Tuberculosis and Malaria for the period between 2017 and 2019, and pledged €156 million (US$172 million), during the 2019 replenishment conference for the 2020-2022 period.
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$451 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$189 million) to climate protection projects between 2019 and 2022. Climate financing was also increased by €20 million (US$24 million) in 2019 and will be augmented by a further €40 million (US$47 million) annually from 2020 onwards. According to the government’s current predictions, climate financing within the development budget will rise to €480 million (US$566 million) annually by the end of this government’s term of office in 2021.
The Netherlands channels the majority of its ODA bilaterally
The Dutch government has a preference for bilateral funding. In 2018, bilateral funding stood at US$3.8 billion, or 67% of total ODA compared to the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) average of 59%. However, this included US$940 million in earmarked funding to multilateral organizations (i.e., channeled through multilaterals but earmarked for specific regions, countries, or themes), which is reported as bilateral ODA. This also included the costs of hosting refugees in the Netherlands reported as ODA (US$574 million in 2018).
Besides multilateral organizations, civil society organizations (CSOs) play an important role in program implementation, receiving 27% of bilateral ODA in 2018 (or US$1.0 billion). This is well above the DAC average of 18%. The ‘Dialogue and Dissent’ policy framework for 2020 to 2024, published in June 2019, puts special attention on the role of CSOs as independent advocates and influencers around the world, and on the promotion of women's rights, gender equality, and inclusion. The Netherlands’ disburses all of its ODA as grants (and none as loans or equity investments).
Costs of hosting refugees reported as ODA decreased by 30% between 2017 and 2018
In 2018, 16% (US$629 million) of Dutch bilateral funding was used to cover the costs of hosting refugees within the Netherlands, making it the largest expenditure area within bilateral ODA . The Netherlands places a high priority on supporting democratic systems in partner countries; as such, spending on government and civil society increased by 16% between 2017 and 2018, from US$537 million to US$622 million. Spending on health and populations, historically a top priority for the Dutch government, also increased by 33% to reach a full 10% of ODA at US$380 million. Agriculture (including forestry, fishing, and rural development) received the fifth-largest share of funding with US$296 million in 2018, up from US$266 million in 2017. Spending on humanitarian aid took a 6% cut and fell from fourth place to sixth place, or from US$307 million to US$289 million over this period.
Dutch ODA has a strong focus on low-income countries and targets sub-Saharan Africa
A large share of the Netherland’s bilateral ODA is not allocated by region; this is driven by funding for CSOs, earmarked funding for multilaterals, and costs of hosting refugees, which cannot be allocated to a specific country or region. When excluding this funding, the Netherlands traditionally prioritizes sub-Saharan Africa; the region received an average of 57% of bilateral ODA in 2018. This share drops to 20% when including all funding (DAC average: 21%).
When looking at the income level of recipient countries, Dutch development tends to focus on the poorest countries. When only considering funding allocated to specific countries, 60% of bilateral ODA in 2018 went to low-income countries (LICs; 15%, if total bilateral ODA is considered).
In November 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. As previously announced in the Development Cooperation Policy published in May of 2018, projects will increasingly focus on the West African Sahel region, the Horn of Africa, the Middle East, and North Africa. The memorandum states that the thematic program budget in these regions will increase by a third at minimum over the course of the current government term, and staff capacity and expertise building will be also prioritized in these regions. 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.
The Netherlands selects its focus regions and countries based on three elements:
- The urgency and need for development cooperation;
- The added value of Dutch efforts; and
- The potential for alignment with Dutch thematic priorities.
Following its 2018 ‘Investing in Global Prospects’ policy, the Dutch government shifted its emphasis to the regions of the West African Sahel, the Horn of Africa, and the Middle East and North Africa (MENA). At the same time, the Netherlands continues its activity in the Great Lakes region (Burundi, Rwanda, Uganda, and East Congo) and two Asian countries (Afghanistan and Bangladesh). ‘Investing in Global Prospects’ lays out specific focuses for each priority region:
- In the Sahel, the Netherlands focuses mainly on the “economic powerhouses” of the region, Niger and Nigeria.
- In the Horn of Africa, key partner countries continue to be Ethiopia, Kenya, and South Sudan. Additional funding is planned, with stronger increases going to Somalia and Sudan.
- In the MENA region, the Dutch government maintains its relations with the Palestinian Territories and Yemen, mainly focusing on humanitarian assistance. It is also increasing its cooperation with Lebanon, Jordan, and Iraq, with a special emphasis on supporting the reception of refugees in the region.
- In the Great Lakes region, the Dutch government emphasizes bilateral cooperation with Burundi, Uganda, and Rwanda, while providing regional funding to East Congo (DRC) focused on stability, humanitarian assistance, and poverty reduction.
- In Afghanistan, the Netherlands continues to focus on promoting stability and security. In Bangladesh, the government plans on transitioning from a development relationship to a trade relationship, focusing on water, textiles, women, and the plight of the Rohingya.
According to the policy, funding for bilateral programs is set to increase by at least a third compared to 2017 levels in each of these focus regions during this government’s term of office. The establishment of three new embassies in Armenia, Niger, and Burkina Faso was announced in 2019 by Foreign Minister Stef Blok. Diplomatic missions in Niamey and Ouagadougou, currently satellites of the Netherlands’ Mali embassy, are slated for expansion and full embassy status as part of the government’s efforts to increase its presence in the Sahel. These moves were part of a US$44 million initiative announced in 2018 to boost Dutch diplomatic presence globally.
Dutch core funding to multilaterals largely goes to the EU and the UN
In 2018, the Netherlands only channeled 33% 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 (US$642 million or 34% of the Netherlands’s multilateral ODA) and United Nations (UN) agencies (US$493 million or 26%). In addition to these core contributions, the Netherlands channeled 17% (US$940 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, 49% of Dutch ODA in 2018 was implemented by multilateral organizations (see figure). This remains below 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.
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), currently in his third term of office, has led a coalition government with the social-liberal Democrats 66 (D66), the Christian Democratic Appeal (CDA), and the Christian Union (CU) since 2017. The next general elections are planned for March 2021.
The Ministry of Foreign Affairs (MFA) defines priorities for Dutch development policy, currently under the leadership of Stef Blok (VVD). Minister for Foreign Trade and Development Cooperation (MFTDC), Sigrid Kaag (D66), 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 donors, the Netherlands does not have a development agency. The implementation of Dutch bilateral programs in partner countries falls under the remit of Dutch embassies. They do so according to the Multi-Annual Strategic Plans (MJSPs), developed by the MFA for all partner countries. MJSPs cover four years, although interim adjustments are possible. The latest public MJSPs ran from 2014 to 2017. New Multi-Annual Strategic Plans, now renamed Multi-Annual Country Strategies, have been developed and will cover the period from 2019 to 2022. Most of these documents are no longer be publicly available, however, their summaries in the form of factsheets are accessible here.
The role of Parliament is to scrutinize development policy and budget allocations. Parliament can amend the government’s draft budget bill annually. Parliamentary 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. They engage with the Parliament and the MFA to influence policy and funding decisions. Many CSOs implement their own programs in developing 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 a larger focus has been placed on strategic partnerships and advocacy. Since 2016, funding for civil society organizations (CSOs) is increasingly channeled through the funding scheme ‘Dialogue and Dissent. Strategic partnerships for lobby and advocacy’ (2016-2020). This scheme emphasizes advocacy work (as opposed to the provision of services and goods) and strategic partnerships between 25 CSOs and the Minister for Foreign Trade and Development Cooperation. Under the two previous cabinets, as part of a larger slashing of ODA funds, spending on CSOs dramatically decreased. In 2018 with the new government, spending overall and funding channeled through CSOs specifically rose again.
The subsequent ‘Dialogue and Dissent’ policy framework for 2020 to 2024 was published in June 2019 and further detailed in a letter to Parliament in November. This letter also included critiques and recommendations from the evaluation report on the Netherlands’ work in crisis settings, called ‘Less pretension, more realism’. The overarching goals of the policy framework are the strengthening of a civil society that, based on a human rights approach, expresses the voices and needs of citizens, and the establishment of an inclusive and sustainable society overall. In particular, the new policy places special attention on the role of CSOs as independent advocates and influencers around the world, and on the promotion of women's rights, gender equality, and inclusion.
Further, 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.
The Minister for Foreign Trade and Development Cooperation manages more than half of total ODA
In 2021, the Netherland’s ODA budget stands at €3.0 billion (US$3.6 billion), accounting for 0.61% of GNI. Despite the overall budget decreases, the ODA-to-GNI ratio is at its highest in recent years, due to GNI contractions caused by the COVID-19 crisis. The ODA/GNI ratio is projected to decrease to 0.52% of GNI by 2024, a fact which elicited harsh criticism from civil society advocates. The budget total reflects a 1% increase compared to 2019.
According to the state budget presented for 2021, ODA is projected to increase by 2% between 2020 and 2024, reaching €4.7 billion (US$5.4 billion) in 2024. Parliament has ring-fenced the ODA budget for 2020, particularly for global health and food security. Beyond 2021, cuts to ODA are expected because of expenditures related to the COVID-19 crisis and of consequent economic contraction.
The Homogeneous Budget for International Cooperation (HGIS) is a budgetary structure within the national budget. It consolidates 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 2020). On top of the funding managed by the MFTDC, other departments within the MFA disburse another 15% of the development budget. The Ministry of Finance provides 2% 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 (9%) and contributions to the EU development budget (7%).
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
|Foreign Trade and Development Cooperation||2,944||3,474|
|Sustainable economic development, trade and investment||409||484|
|Sustainable development, food security, water, and climate||734||866|
|SRHR, incl. HIV/AIDS, of which:||402||474|
|Women's rights and gender equality (incl. contributions to UNWOMEN)||52||61|
|Other (mainly CSO support)||289||
|Peace, security and sustainable development||749||884|
|Humanitarian assistance (incl. contributions to UNOCHA, ICRC)||370||437|
|Reception and security in the region and cooperation on migration||162||191|
|Security and rule of law development||217||256|
|Multilateral cooperation and other areas||294||347|
|Other poverty reduction policy||81||96|
|Open for distribution (due to changes in GNP and/or attributions)||69||81|
|Ministry of Foreign Affairs||634||748|
|Ministry of Finance (funding for development banks)||44||52|
|Other ODA expenses||850||1,003|
|Costs for hosting refugees in the Netherlands||504||595|
|Total ODA budget (gross)||4,535||5,352|
Sources: Homogenous Budget for International Cooperation (HGIS-Nota 2020)
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. 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 Nation Populations Fund (UNFPA) and the Global Financing Facility (GFF), by €10 million (US$12 million). The budget must be approved before the end of the year.