Netherlands

Summary

ODA Spending

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 due to growth in in-donor refugee costs, support to Ukraine, and the Netherlands' heightened contributions to multilateral organizations.

How is the Netherlands’ ODA changing?

Between 2020 and 2021 the Netherlands’ ODA decreased by 7%. According to the government, the decline was mainly connected to economic difficulties and was calculated in line with the estimated decrease in GDP.

According to the latest development strategy, published in June 2022, the Netherlands will increase ODA spending by EUR300 million ( US$316 million) from 2022-2024, and structurally per year by EUR500 million ( US$526 million) from 2025 onward. Additionally, the ODA budget linked to GNI is expected to increase further. A large share of the prospective ODA increase has already been slated for refugee costs.

Where is the the Netherlands’ ODA allocated?

The Netherlands channels 72% of its ODA bilaterally, more than the DAC donors' average of 59%. This includes 22% of earmarked funding to multilaterals, which is counted as bilateral funding. This current split between bilateral and multilateral funding in the Netherlands is likely to remain stable in the coming years. The Netherlands’ strong bilateral funding focus is reflective of the government’s focus on promoting trade relationships and strengthening the link between development and trade.

Bilateral Spending

The Netherlands’ sectoral distribution of ODA is in line with its policy priorities. The Netherlands spent the largest share of its bilateral ODA in 2021 on ‘government and civil society,’ amounting to 19% of bilateral ODA, or US$740 million. ‘Health and populations,’ an area closely related to Dutch thematic priorities, saw a significant jump of 27% from 2020 and received the 2^nd-largest share of ODA, at 12%, or US$452 million. Spending on hosting refugees in the Netherlands and ‘humanitarian aid,’ while remaining high up on the list, saw a decline from 2020 of 32% and 18% respectively. They are the 4^th and 5^th largest sectors of bilateral ODA, with funding levels at US$408 and US$300 million, respectively, in 2021. Preliminary OECD data for 2022, however, shows that in-donor refugee costs have once again gone up in both absolute and relative terms, reaching US$946 million or 15% of total ODA.

28% of bilateral ODA, or US$1.1 billion, was channeled through the public sector. NGOs and CSOs also play an important role in implementation, channeling 24% of Dutch bilateral ODA in 2021, or US$927 million, above the DAC average of 17%.

LICs are the main recipients of the Netherlands’ ODA. Priority countries tend to be the countries of origin for a high proportion of migrants and refugees arriving in the Netherlands.

Excluding funding unallocated by region, the Netherlands places a priority on Sub-Saharan Africa; the region received 66% of bilateral ODA in 2021.

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.

The Netherlands provided all its ODA as grants in 2021. Although it does not extend loans as part of its development cooperation, engaging the private sector and promoting private sector growth in LICs is one of the government’s key priorities.

Multilateral Spending and Commitments

Approximately 6% of the Netherlands’ 2023 ODA budget goes towards multilateral cooperation. In 2022, this percentage was 4%. The Netherlands provides core contributions to several multilateral organizations, including the UNDP, UNICEF, and UNIDO, as well as international finance institutions including the AfDB, the World Bank, and the EBRD. This small increase in multilateral funding suggests that the government is heeding the advice of the Ministry of Foreign Affairs’ evaluation service, which argues that a rise in multilateral funding could increase the impact and scale of Dutch ODA.

In December 2022, the Netherlands published its policy framework on global multilateralism. This framework is complementary to the government's coalition agreement and existing strategies, including the 2022 development strategy, the international climate strategy, and the global health strategy. The policy framework outlines three multilateral pillars:

1. Protect: protecting the multilateral system against influences that undermine the international legal order and human rights;
2. Strengthen: strengthening the Netherlands’ own position and that of the EU in the current dynamic geopolitical multilateral field of influence; and
3. Reform: ensuring the multilateral order is more representative, coherent, efficient, and more effective, operating in line with the vision and mission of the founding treaties and statutes.

The Netherlands’ recent commitments to multilateral organizations are summarized below.

Politics & Priorities

What is the current state of Dutch politics?

The Netherlands is a representative democracy with a parliamentary system. Elections take place every four years except in the event of a dissolution.

Prime Minister Mark Rutte’s party, the liberal-conservative VVD party, won the March 2021 elections. It was followed closely by the social-liberal and pro-European Democrats 66, or D66 party, led by Sigrid Kaag, the current Minister of Finance and former Foreign Trade and Development Cooperation Minister. After a full 360 days after the ‘Rutte III’ government resigned amid a national scandal, during which record-long coalition negotiations took place, the new cabinet was sworn in on January 11, 2022. Rutte’s fourth government is composed of his own VVD party, D66, the Christian-Democrat CDA, and the more social-Christian ChristenUnie party.

On July 7, 2023, Prime Minister Mark Rutte handed in the resignation of all ministers and state secretaries to the King after it became clear that there were irreconcilable differences between the coalition parties’ views on migration. The prime minister, ministers, and state secretaries to agreed to continue to carry out their duties in a caretaker capacity until a new cabinet could be formed following the elections scheduled to take place in mid-November 2023.

Who is responsible for allocating the Netherlands’ ODA?

Dutch CSOs play an active role in Dutch development cooperation. The development CSO umbrella organization, Partos, represents over 100 organizations that engage with parliament and the MFA to influence policy and funding decisions. Many CSOs implement their own programs in LICs and are funded by the Dutch government and through private donations. Since the end of 2015, program funding for CSOs has been cut sharply, and the MFA has placed a larger focus on strategic partnerships and advocacy. From 2021 onwards, funding for CSOs is channeled through the new Strategic Partnership programs focusing on various themes. A total of 42 CSOs were funded under the Strategic Partnership grant scheme, under four different funding calls: Power of Voices (includes food security, climate adaptation and human rights programs), Power of Women, the SRHR Partnership Fund, and Women, Peace and Security. The partnerships cover the period 2021-2025 and cover a total of EUR1.3 billion ( US$1.5 billion).

What are the Netherlands’ development priorities

The Netherlands’ new development strategy emphasizes the role of trade and the Dutch private sector while continuing a focus on the Netherlands’ traditional development cooperation goals. The new cabinet’s top priorities are health care, climate, education, housing, and responding to the COVID-19 crisis. In addition, planned ODA budget increases are mainly dedicated to investments in supporting refugees, humanitarian support, SRHR, and climate.

The objectives and priorities of the Dutch development policy are laid out in the policy document, Doing What the Netherlands is Good At. Released in June 2022 under Foreign Trade and Development Cooperation Minister Liesje Schreinemacher, the document focuses on the intersection between trade and development priorities. The strategy’s self-proclaimed keyword is ‘focus,’ which covers both a geographic focus of 25 priority countries, and a thematic focus of traditional policy areas of expertise, including water, agriculture, and SRHR. Digitalization and sustainability appear as cross-cutting themes throughout the strategy.

The Netherlands encourages the coordination and strengthening of trade and development by encouraging Dutch businesses to invest in LMICs, especially in sustainability and innovation.

The strategy focuses on three key areas:

1. Trade: Dutch trade policy with LMICs will concentrate on a smaller number of markets, focusing on strengthening Dutch earning capacity and, together with trade partners, strengthening sustainability, digitalization, economic resilience, and the protection of entrepreneurs against unfair competition. Within the EU, the Netherlands aims to maintain its position as a driver for international corporate social responsibility legislation;
2. Development cooperation: Tackling the root causes of ‘poverty, terrorism, irregular migration, and climate change,’ as well as reaching the SDGs remain the focus of Dutch development cooperation. Additional investments are dedicated to the COVID-19 pandemic, strengthening global health systems, and climate change. Traditionally, strong areas of thematic expertise for the Netherlands like water, agriculture, and SRHR maintain high importance; and
3. Strengthening the link between trade and development cooperation: Dutch businesses are set to become much more involved in achieving the SDGs in 14 emerging economies. This effort attempts to increase investment in sustainability and digitalization, as well as strengthen the connection between Dutch organizations and local partners. PPPs focused on export and innovation policy are of particular importance.

Following the 2022 development strategy Doing what the Netherlands is Good At, the Dutch MFA published its theory of change for strengthening the private sector to promote development on November 28, 2022. The ministry believes that strong SMEs help accelerate the transition to sustained, inclusive, and sustainable economic growth in LMICs with decent work for all ( SDG 8), especially women and youth. The three main ways that the MFA aims to strengthen SMEs in its 40 private sector development priority countries is by strengthening the business climate (for example, by strengthening farmers’ cooperatives to better represent farmers’ interests), by improving trade conditions and making trade and production more sustainable (for example, through value chains, logistics, and ensuring policy coherence between international trade agreements and legislation regarding Corporate Social Responsibility, and by making the financial sector in priority countries more sustainable and inclusive (for example, through financial products and services for SMEs, especially those owned by women and youth).

The government has divided grants for civil society in the new policy framework into seven specific themes:

1. climate mitigation and adaptation
2. increasing sustainability of value chains
3. food security, sustainable water management, and WASH
4. women's rights and gender equality
5. freedom of expression and freedom of religion and belief
6. equal rights for LGBTQ+ populations
7. security and the rule of law.

The Netherlands has recently made it easier for civil society organizations to access flexible, short-term funding. On December 16, 2022, Dutch Minister for Foreign Trade and Development Cooperation announced that the Netherlands has made an additional EUR8 million ( US$8 million) available for the Civic Space Fund's ‘flex option', meant for urgent, short-term projects, and lowered the application request minimum from EUR100,000 ( US$105,000) to EUR25,000 ( US$26,000).

In line with the overall development strategy, the Dutch government recently published its first Dutch International Climate Strategy and Global Health Strategy in October 2022. More strategies are expected to be published in 2023, including an Africa Strategy (Q2 2023), a human rights policy memorandum (Q1 2023), an International Migration Strategy (Q2 2023), and an International Culture Policy (Q4 2023). The Feminist Foreign Policy is expected to be published in the form of a practical handbook in 2023, potentially with the next letter to the House of Representatives planned for July 2023.

By Issue

The Netherlands views gender equality as a prerequisite to all other development goals. The Netherlands is a global champion for gender equality, particularly in SRHR. ‘Equal rights and opportunities for women and girls’ and SRHR are two of the Netherlands’ development priorities. The Netherlands is also expected to publish its first Feminist Foreign Policy in 2023.

| Read more about the Netherlands’ ODA related to Gender Equality

Climate: Regarding climate finance, the cabinet is committed to allocating 50% of public climate finance to adaptation. This is in line with an increasing focus on climate, which began under the previous government.

The Dutch government has also committed to increase its biodiversity finance by 50% by 2025. In line with this commitment, Dutch Minister for Foreign Trade and Development Cooperation Liesje Schreinemacher announced on December 19, 2022, that the Netherlands will contribute EUR50 million ( US$53 million) to the Nature, People and Climate investment program of the CIF, which focus on nature-based solutions.

The Netherlands was the host of the Climate Action Summit from January 25-26, 2021. In another step forward for climate action, the Dutch development bank FMO published a position statement on June 1, 2021, committing to phase out direct investments in fossil fuels over the course of a five-year transition period. The policy prohibits the bank from making any new direct investments in upstream or mid-stream stand-alone fossil fuel-related activities, with an exemption for natural gas and distributed power projects necessary for energy security at affordable prices.

From March 22-24, 2023, the Netherlands co-hosted the UN Water Conference alongside Tajikistan in New York. Among the over 670 commitments made by attendees to address water-related issues as part of the Water Action Agenda, the Dutch government made several commitments. The Netherlands pledged EUR55 million ( US$58 million) in contribution to initiatives that help countries strengthen response towards water-related disasters and climate change.

| Read more about the Netherlands’ ODA related to Climate Change

Education has become less of an area of interest for the Netherlands. In the newest development strategy, the Dutch government wrote that it will “leave themes like primary education to other donors” to prioritize larger and longer programs on a smaller number of priority areas. According to the HGIS, the Ministry of Education, Culture, and Science has committed to slightly increasing its ODA for university education from EUR48,000 ( US$57,000) in 2021 to EUR50,000 ( US$53,000) in 2022 and 2023.

| Read more about the Netherlands’ ODA for Education 

The Netherlands considers itself to be an international leader in the area of agriculture. It is prioritizing green energy and digitization transition especially in trade to lower international trade costs in its development cooperation. The Dutch government also sees agriculture as intertwined with food security, water management, and climate protection.

| Read more about the Netherlands’ ODA for Agriculture

By Region

Since the beginning of the Russian war in Ukraine in February 2022, the Netherlands has been a key provider of support to Ukraine. In November 2022, the Dutch government committed EUR180 million ( US$190 million) for acute ‘winterization’ to help Ukraine through the winter. The funds were reserved to reconstruct housing, electricity, heating, and water services. In December 2022, the Dutch government delivered trucks with materials to help Ukraine repair its electricity infrastructure. Recently, in February 2023, the Netherlands contributed 5 million LED lamps through the Enlighten Ukraine initiative to reduce energy consumption by 10%. Compared with other donor countries, however, the Netherlands' support was quite low at less than 3% of total ODA in 2022.

In line with its 2022 Doing What the Netherlands is Good At policy, the Dutch government’s regional focus is on the ‘West African Sahel,’ the ‘Horn of Africa,’ and the MENA region. The 2022 development strategy lays out the Netherlands’ 22 focus countries for development cooperation, which also include countries outside of these focus regions, such as Mozambique and Bangladesh. In addition, the strategy also outlines 25 trade focus countries and 14 countries where both development cooperation and trade will be combined in bilateral programs.

The Netherlands published an updated Africa Strategy in May 2023, which outlined short-, mid-, and longterm actions to promote the 54 countries’ equal economic development, reduce poverty, improve human rights, and limit irregular migration.

In particular, the strategy displayed the Netherlands’ ambition to strengthen and deepen its strategic relationship and partnership with African countries, both bilaterally and multilaterally through the EU, with afocus on equitable and reciprocal cooperation based on mutual interests. Key themes included:

• Promoting regional stability, mobility, and migration agreements;
• Achieving the SDGs and AU 2063 Agenda; and
• Increasing the prosperity and climate resilience of people and communities in Africa and Europe.

The Netherlands will also provide a range of support to 12 specific LDCs on the SDGs. Those countries largely coincide with the Netherlands’ focus regions and include Benin, Burkina Faso, Burundi, Ethiopia, Mali, Mozambique, Niger, Palestine territories, South Sudan, Sudan, Uganda, and Yemen.

At the same time, the Netherlands continues activities targeted toward specific objectives in 10 LMICs. Examples include the reception of refugees in Jordan and Lebanon, as well as reconstruction in Iraq. The full list of countries receiving targeted support covers Afghanistan, Bangladesh, Chad, Egypt, Iraq, Jordan, Kenya, Lebanon, Somalia, and Tunisia. In 2020, the Netherlands began ‘phasing out’ of several countries. These include Ghana and Indonesia, with which they intend to intensify their trade relations going forward.

What is the future of Dutch ODA?

Since 2016, the Netherlands has crafted development policy coherence action plans to improve the effectiveness of Dutch development policies. The Dutch government will evaluate these action plans and report on their progress yearly.

On November 25, 2022, Dutch Minister for Foreign Trade and Development Cooperation Liesje Schreinemacher submitted a third revision of their strategy for development policy coherence and on achieving the SDGs.The action plan focuses on three themes that are important for both the Netherlands and the LMICs it supports: 1) reducing the Dutch climate, land, and water footprint, 2) targeting black money and tax avoidance, and 3) lowering vaccine and health inequality.

The new action plan will be evaluated by the MFA evaluation service from early 2023. The plan’s sub-goals, efforts, and indicators will be reported on May 17, 2023, known as Accountability Day.

Budget

What are the details of the Netherlands’ ODA Budget?

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.

ODA distribution across the ministries is described in the HGIS budget. It contains the share of ODA channeled through the Foreign Trade and Development Cooperation budget. The ministry’s ODA budget is organized around thematic areas. The envelopes for these thematic areas are usually split further into grants and contributions to multilaterals and other organizations working in that thematic area.

The government published the fall budget, an updated version of the 2022 draft budget in November 2022. The budget does not specify all ODA allocations but lays out significant changes in the budget for the Minister of Foreign Trade and Development Cooperation, which is largely dedicated to ODA.

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.

 

How does the Netherlands determine its ODA budget?

• Ministries develop initial budget proposal: From February to March, ministries, including the MFA, develop initial budget proposals for the coming year and decide on spending increases or decreases for 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 are also important stakeholders, as they are responsible for designing and coordinating the implementation of Dutch development policy.
• Ministries update 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 fall; this is known as the spring budget, or Voorjaarsnota. While 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 during this period include 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 parliament, or Miljoenennota.
• Parliament debates and approves budget: The ODA budget is debated and amended by the Committee on Foreign Trade and Development Cooperation in the House of Representatives at the end of November. Parliamentary debates in November and December can lead to significant changes to the draft budget. In December 2022, the parliament amended the budget to include an additional, significant share to cover the costs of hosting refugees in the country as well as humanitarian assistance to Ukraine. The budget must be approved before the end of the year.