Budget Toolkit: Netherlands

The OECD collects and publishes granular data on DAC donors' ODA. While this data, featured in our Donor Tracker Profiles, provides the most comprehensive view of donor government ODA spending and is crucial for accountability and transparency, it provides only a past perspective. The time taken to collect and verify the information means that preliminary data are published about 3 months after the calendar year ends, and the complete and detailed data on resource flows take more than 12 months to be published.

To get a more up-to-date view on donors’ future plans and to influence ODA budgetary decisions, advocates need to look to donor budgets and their surrounding decision-making processes for insight. The majority of donors publish draft budgets and conduct negotiations in the last quarter of the calendar year before finalizing the next year’s budget. Through this series of Donor Budget Toolkits, the Donor Tracker aims to support advocates in better understanding donor budget timelines, how they translate to ODA spending, and how decision-making processes work, so they can best advocate for development cooperation in donor budgets negotiations. The series will be released over the upcoming months, in line with ongoing budget negotiations in markets tracked by the Donor Tracker.

ODA volume

How much ODA does the Netherlands contribute?

In 2021, the Netherlands was the 9^th-largest donor country in 2021, spending US$5.3 billion on ODA. This corresponds to 0.5% of its GNI, putting it in 6^th place in a ranking of countries’ ODA expenditures relative to the size of their economies.

Preliminary OECD data for 2022 shows a drastic jump of 30% in ODA to US$6.5 billion, largely due to growth in in-donor refugee costs, support to Ukraine, and the Netherlands' heightened contributions to multilateral organizations.

ODA sources

What are the main sources of the Netherlands' ODA?

ODA is distributed across Dutch ministries according to their respective responsibilities.

Key Stakeholders

ODA decision-makers

Who makes decisions on the Netherlands' ODA?

The Netherlands has a constitutional monarchy with a parliamentary democracy, and its governmental structure comprises three main branches: the executive, legislative, and judicial branches.

The Executive Branch:

The Monarch: The King or Queen of the Netherlands serves as the ceremonial head of state with limited political powers. The monarch's role in the budget process is largely symbolic.

The Government: The executive authority is held by the government, led by the Prime Minister. The government is responsible for developing the national budget proposal and submitting it to the legislative branch for approval.

The Legislative Branch:

The States General: The Dutch Parliament, known as the States General, is the highest legislative body in the Netherlands. It consists of two chambers: the House of Representatives (Tweede Kamer) and the Senate (Eerste Kamer) The Dutch budget process is a bicameral one. The government prepares a detailed budget proposal that outlines government revenues and expenditures for the upcoming fiscal year. This proposal is presented to the House of Representatives.

The House of Representatives plays a pivotal role in the budget process. The budget must gain majority approval in the House of Representatives to pass. The Senate reviews the budget but does not have the authority to amend it; their role is primarily to assess the budget's legality and compliance with the constitution. While Parliament has the right to amend the budget, changes are rarely made.

The Judicial Branch:

Does not directly participate in the budget process.

ODA timeline

When and how are decisions on the Netherlands' budget made?

The Dutch fiscal year corresponds to the calendar year.

Current Budget Impact

What does the current development budget tell us about the Netherlands' ODA?

The Dutch ODA budget for 2023 stands at EUR6.2 billion ( US$6.5 billion) with a slightly decreased ODA/GNI ratio of 0.62%, compared to 0.67% in 2022. According to the development budget published in September 2022, the Netherlands is set to increase its spending for development cooperation by around EUR300 million ( US$316 million) annually from 2022-2024 and an additional EUR500 million ( US$527 million) each year from 2025 onward.

While the additional funding is not enough to reach the internationally agreed-upon 0.7% ODA/GNI target, it is projected to keep the ODA/GNI ratio stable, at around 0.62% from 2023-2024 and 0.65% from 2025-2027. The governing parties intend to reach 0.7% ODA/GNI in the next legislative period, hopefully by 2030. Not all the coalition parties are supportive of the target. VVD, which has traditionally opposed ODA increases and has pushed back on the target, instead advocates for the role of trade and private sector transactions as well as multilateral programming for development.

This year's 2023 ODA budget confirmed many of the budget lines included in the June 2022 development strategy, Doing What the Netherlands is Good At. In line with the Rutte IV cabinet’s coalition agreement, the budget of the Minister for Foreign Trade and Development Cooperation increased by approximately EUR300 million ( US$ 316 million) from 2022-2024, and structurally per year by EUR500 million ( US$526 million) from 2025 onward. For 2023, the largest part of the development budget is dedicated to investments in humanitarian support (15%), followed by strengthening the private sector and labor force in LMICs (14%), SRHR (14%), food security (11%), climate (8%), and refugee support (8%). It is also expected that the ODA/GNI target ratio would increase as the Dutch economy rebounds from the COVID-19 pandemic.

Next steps?

Budget Negotiations

The 2024 budget will be debated in parliament in November and December 2023, with the potential to make large changes in the proposed budget allocations.

On September 19, 2023, the Dutch cabinet announced that EUR400 million ( US$ 428 million) will be cut from the 2024 development budget and reallocated to support the reception of asylum seekers in the Netherlands. The 2024 budget showed an additional 7% of development funding will be reallocated to accommodate the high levels of asylum seekers in the Netherlands. The reallocation brings the total 2024 budget for the Minister for Foreign Trade and Development Cooperation to EUR3.6 billion ( US$3.9 billion).

Despite the cabinet’s commitment to continue existing development policy, the 2024 budget made cuts in addition to those announced in the April 2023 Spring Budget. The 2024 budget showed a cut of EUR300 million ( US$326 million) to development funding, which contradicted the motion from June 2023 by the House of Representatives to reverse the April 2023 development budget cuts. The total amount of the development budget cut between 2023 and 2026 increased from EUR3.4 billion ( US$3.7 billion) to a total of EUR3.5 billion ( US$3.8 billion).

On October 26, 2023, the Dutch House of Representatives approved advancing EUR70 million ( US$76 million) from 2028 development budget as a buffer against proposed development budget cuts for 2023. The recently approved treasury move, similar to the move announced in June 2023, will add EUR70 million ( US$76 million) to the remaining 2023 development budget in response to the September 2023 cuts. It is meant to support climate adaptation in vulnerable countries, support for asylum seekers, and humanitarian assistance.

On November 22, 2023, the nationalist, right-wing PVV, led by Geert Wilders, won 37 parliamentary seats in the Dutch general election, making it the largest party represented in the Dutch parliament. Outgoing Prime Minister Mark Rutte’s party, the conservative-liberal VVD, suffered a staggering loss and shrank from 34 to 24 seats. While polls leading up to the election indicated that the PVV would grow in size, the 20 seats gained by the PVV was not anticipated by political experts.

Budget Reception

Partos, an organization which represents more than 100 development organizations in the Netherlands, criticized the 2024 budget when it was published. Director Liana Hoornweg argued that these cuts undermine the Netherlands’ international credibility, particularly in light of the Netherlands' recent call on other countries to contribute more to achieving the SDGs during the 78^th UN General Assembly. Hoornweg called on the Dutch government to stop subsidizing the fossil fuel industry, which totals approximately EUR37.5 billion ( US$40.8 billion) annually, and to reinvest those funds in sustainable development.

Experts predict that the PVV will face coalition-building difficulties. Frans Timmermans, leader of the second-largest party GroenLinks, expressed that his party would never join a coalition with the PVV and stands in opposition to the PVV's discriminatory stances. The leader of the VVD, Dilan Yeşilgöz, expressed that her party will not join a coalition with Wilders, though it would be open to being a ‘tolerating partner’. If Wilders is unable to secure a majority coalition, the VVD would advise a minority coalition. A minority government would force the PVV's coalition to secure the VVD's approval for the 2024 draft.