At a glance
- The Netherlands is the seventh-largest donor country, spending US$5.6 billion on official development assistance (ODA) in 2018. This corresponds to 0.61% of its gross national income (GNI). Net ODA increased by 6% between 2017 and 2018.
- The current cabinet, in office since 2017, is committed to compensating for some of the budget cuts made by the previous cabinet. To do so, it will allocate an additional US$2.5 billion between 2019 and 2022 as ODA. Despite this funding, as the government’s budget proposal currently stands, ODA/GNI share will fall to 0.54% in 2022.
- In 2017, costs for hosting refugees in the Netherlands almost doubled, increasing from 9% of net ODA in 2016 (US$446 million) to 17% in 2017 (US$835 million). However, these costs decreased again in 2018 to 10% of net ODA (US$531 million). In the 2019 budget proposal, they stand at US$473 million, or 9% of the total ODA budget.
- Traditionally, the Netherlands focuses on four thematic priorities: 1) security and the rule of law, 2) water management, 3) food security, and 4) sexual and reproductive health and rights (SRHR) including HIV/AIDS. These four themes will remain the focus of this cabinet (2017-present).
- The May 2018 policy note ‘Investing in Global Prospects: For the World, For the Netherlands’ released by the minister for foreign trade and development cooperation, Sigrid Kaag, indicates a geographic shift in the Netherlands’ development 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 shown leadership in this area, including in addressing issues related to SRHR.
- The Netherlands will host the first International Conference on Mental Health and Psychosocial Support in Crisis Situations in Amsterdam on October 7-8, 2019, with the intention of bringing the issue higher on the global agenda.
- The Netherlands is currently applying for a seat on the Human Rights Council of the United Nations (UN) for the upcoming term (2020 to 2022), with plans to focus on freedom of expression, freedom of religion or belief, and equal rights for women, girls, and LGBTQ people. The election will take place at the UN’s General Assembly in New York in October 2019.
In absolute terms, ODA is projected to rise during current legislative term
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 reached US$5.6 billion ODA in 2018 (current prices). These numbers are based on the new methodology for measuring ODA loans which the OECD DAC applies to ODA reporting since 2018. Preliminary ODA figures for 2018 using this new methodology were first released in April 2019. This methodology, called ‘grant-equivalent’ methodology, more accurately reflects donor funding through concessional ODA loans because only the grant portion of loans, expressed as a monetary value, is counted as ODA. This reform had no impact on the Netherlands’ ODA volume, as it does not extend ODA loans.
Following a peak of US$5.9 billion in 2015, ODA decreased reaching US$5.0 billion in 2017 (in constant prices). Between 2017 and 2018, the Netherland’s net ODA rose by 6%, mainly driven by increased contributions to the World Bank group.
In recent years, the costs of hosting refugees – partly reportable as ODA – have been sparking debates in the Netherlands. These costs have fluctuated heavily over the past five years: They peaked at US$1.4 billion in 2015, before dropping to US$531 million in 2018, accounting for 10% of net ODA. Some of the costs incurred by the Netherlands for hosting refugees are financed from the ODA budget, which has reduced funding available for global development.
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 the government’s Homogeneous Group for International Cooperation (HGIS), which details ODA expenditures per ministry in a financial plan updated yearly (HGIS nota), costs for hosting refugees in the Netherlands should gradually decrease between 2019 and 2022, from €420 million (US$473 million) budgeted in 2019 to €338 million (US$381 million) in 2022. The current coalition government, in office since October 2017, is committed to compensating for the cuts made by the previous coalition government.
The current coalition government, in office since October 2017, is committed to compensate 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’.
Focus is on four thematic 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 substantiates the Coalition Agreement released in November 2017. It stresses that development cooperation, as an integral part of foreign policy, aims to combat the root causes of poverty, migration, terrorism, and climate change within the framework of the United Nations 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 the 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 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, incl. food security, and 4) security and the rule of law. The Netherlands puts a strong emphasis on the interlinkages between these priority themes in its policies and programs. Existing efforts across these sectors will increasingly focus on unstable regions defined in the BHOS: the West African Sahel, the Horn of Africa, and North Africa and the Middle East. In addition to that, the policy outlines that it will increase funding across various areas, including climate protection, education, humanitarian assistance, private-sector development, and women’s rights and gender equality.
The Netherland’s key development priorities:
- Sexual and reproductive health and rights (including HIV/AIDS)
- Security and the rule of law
- Water management
- Agriculture, incl. food security
Global health, and particularly SRHR, is a major priority area of Dutch development cooperation. Health accounted for 7% of Dutch bilateral ODA in 2017. However, total ODA to health is much higher, as the Netherlands channels half (50% in 2016, the latest year for which data is available) of health ODA multilaterally. Total health ODA stood at US$589 million in 2016, or 11% of Dutch ODA, which is above the OECD’s Development Assistance Committee (DAC) average. The Dutch government continues to be a global leader on SRHR: in 2017, it launched the global initiative ‘She Decides’ to support organizations that focus on SRHR and family planning (see ‘Sector: Global Health’).
Global health, particularly SRHR, is a major priority area of Dutch development cooperation.
The fight against climate change is another key issue for the Dutch government. It has committed to step up its support to climate financing in low-income countries and, according to the BHOS, is expected to spend €400 million (US$451 million) of ODA resources in 2018 on climate-related interventions. A Dutch Climate and Development Fund (DFDC) was launched at the end of 2018, which will provide €160 million (US$180 million) to climate protection projects between 2019 and 2022. In addition, climate financing will be increased by €20 million (US$23 million) in 2019 and €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$541 million) annually by the end of this government’s term of office (2021).
The Netherlands channels the majority of its ODA bilaterally
The Dutch government has a preference for allocating ODA through bilateral funding. In 2017, bilateral funding stood at US$3.6 billion, or 72% of total ODA (OECD Development Assistance Committee (DAC) average: 60%). This included US$708 million in earmarked funding to multilateral organizations, which is reported as bilateral ODA but channeled through multilaterals for specific regions, countries, or themes. This also includes the costs of hosting refugees in the Netherlands reported as ODA (US$835 million in 2017). Civil society organizations (CSOs) play an important role in implementation, channeling 25% of bilateral ODA in 2017 (or US$902 million). All of the Netherlands’ ODA consists of grants (as opposed to loans).
Dutch bilateral funding for the costs of hosting refugees increased by 87% between 2016 and 2017
23% or US$835 million of Dutch bilateral funding in 2017 was used to cover the costs of hosting refugees within the Netherlands, making it the largest expenditure area of bilateral ODA. Despite decreases since 2012, the second-largest share of bilateral ODA was allocated to projects in the ‘government and civil society’ sector (14% or US$501 million, down from US$816 million in 2013). Funding for humanitarian assistance peaked in 2015 at US$488 million, before falling back to US$287 million in 2017. Health and population, and agriculture and rural development, both closely related to Dutch thematic priorities, are the fifth and sixth-largest sectors of bilateral ODA, with funding levels atUS$267 million and US$248 million respectively in 2017.
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 (69% on average between 2015 and 2017) or income group (78%). This funding mainly includes funding for CSOs, earmarked funding for multilaterals, and costs of hosting refugees. When excluding this funding, the Netherlands traditionally places a priority on sub-Saharan Africa: the region received 56% of bilateral ODA between 2015 and 2017. This share drops to 17% when including all funding (DAC average: 33%). When looking at income level, Dutch development policy traditionally focuses on the poorest countries. When only considering funding that is allocated to specific countries, almost two-thirds (64%) of bilateral ODA between 2015 and 2017 went to low-income countries (LICs; 14% if total bilateral ODA is considered).
Dutch development policy traditionally focuses on the poorest countries.
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 its 2018 ‘Investing in Global Prospects’ policy, the Dutch government will shift 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 will continue its activity in the Great Lakes region (Burundi, Rwanda, Uganda and East Congo) and two Asian countries (Afghanistan and Bangladesh). The 2018 development policy ‘Investing in Global Prospects’ lays out specific focuses for each priority region:
- In the Sahel, the Netherlands will focus mainly on the “economic power houses” of the region, Niger and Nigeria.
- In the Horn of Africa, key partner countries will 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 will maintain its relations with the Palestinian Territories and Yemen, mainly focusing on humanitarian assistance. It will also increase 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 puts an emphasis on 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 will continue to focus on promoting stability and security. In Bangladesh it will transition 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. In addition to that, new embassy offices will be opened where necessary to increase the Netherlands’ visible presence (especially in the Sahel), and existing embassies in focus regions will receive increased support from local experts and diplomats with development experience.
For a deeper understanding of funding at the recipient level, please consult data from the International Aid Transparency Initiative (IATI). IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation, including more recent activity than is available through OECD data. Data can be searched by recipient country, the ‘publisher’ (including funders that do not report to the OECD), and other filters. Click here for more information on IATI’s data. Click here to go directly to IATI’s ‘d-portal’, a user-friendly interface for data searches.
Dutch core funding to multilaterals largely goes to the EU and the UN
In 2017, the Netherlands only channeled 28% of its ODA as core funding to multilaterals (OECD DAC average: 40%), amounting to US$1.4 billion. The largest recipients of core contributions to multilateral organizations were EU institutions (US$589 million, or 41% of the Netherlands’s multilateral ODA) and UN agencies (US$492 million, or 35%). In addition to these core contributions, the Netherlands channeled 14% of its 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, 42% of Dutch ODA in 2017 was implemented by multilateral organizations (see figure). This remains below the DAC average of 53%.
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 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.
Dutch embassies implement bilateral programs in partner countries
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 a period of 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, are currently under development and will cover the period from 2019 to 2022. These documents will no longer be publicly available. A number of Dutch civil society organizations (CSOs) and members of parliament have called for more transparency and are advocating for shorter public versions of these strategies to be openly available, when finalized.
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 (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. In 2015, program funding for CSOs was sharply cut, and since then, 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 puts an emphasis on advocacy work (as opposed to provision of services and goods) and strategic partnerships and strategic partnerships between 25 CSOs and the Minister for Foreign Trade and Development Cooperation. A subsequent ‘Dialogue and Dissent’ policy framework for 2020 to 2024 is currently being developed by the Ministry of Foreign Affairs (MFA) in an open dialogue with civil society. A subsequent ‘Dialogue and Dissent’ policy framework for 2020 to 2024 was presented on June 20, 2019 and will be debated in Parliament on September 5, 2019. It largely maintains the same programs and funding modalities of the earlier policy framework.
The Minister for Foreign Trade and Development Cooperation manages more than half of total ODA
In 2019, the Netherland’s ODA budget stands at €4.7 billion (US$5.3 billion). This is a marginal increase of 2% from 2018, and 5% from 2017 (€4.5 billion; US$5.1 billion). According to the budget proposal, the ODA budget is projected to increase by 8% between 2019 and 2023, with ODA at €5.1 billion (US$5.8 billion) in 2023.
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 (63% in 2019). 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 7% of the total ODA budget, disbursing funding to development banks. The remaining 16% is mostly contributions to the EU development budget (7%) and funding to cover the costs of hosting refugees in the Netherlands.
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 2018 draft ODA budget
|Foreign Trade and Development Cooperation||2,959||3,336|
|Sustainable economic development, trade and investment||399||450|
|Sustainable development, food security, water, and climate||722||814|
|Food security, of which:||340||383|
|Contributions to (international) organizations||220||248|
|SRHR, incl. HIV/AIDS, of which:||430||485|
|Contributions to (international) organizations (incl. Global Fund, UNFPA, UNAIDS)||268||302|
|Women's rights and gender equality (incl. contributions to UNWOMEN)||52||59|
|Other (mainly CSO support)||285||
|Peace, security and sustainable development||776||875|
|Humanitarian assistance (incl. contributions to UNOCHA, ICRC)||369||416|
|Reception and security in the region and cooperation on migration||172||194|
|Security and rule of law development||235||265|
|Multilateral cooperation and other areas||296||334|
|Other poverty reduction policy||64||72|
|Open for distribution (due to changes in GNP and/or attributions)||101||114|
|Ministry of Foreign Affairs||642||724|
|Ministry of Finance (funding for development banks)||319||360|
|Other ODA expenses||750||845|
|Costs for hosting refugees in the Netherlands||420||473|
|Total ODA budget (gross)||4,730||5,332|
Sources: Homogenous Budget for International Cooperation (HGIS-Nota 2019)
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 theDirectorate-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 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 (called “Prinsjes Dag”), 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, and occasionally beginning of December. 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$56 million). The budget must be approved before the end of the year. More recently, in the 2018 budget negotiations, the Dutch Parliament approved an amendment to the 2018 budget for an increase of €10 million (US$11 million) to be spent on family planning.