28/06/2017 - The Netherlands has responded to new global goals and challenges by integrating its aid, trade and investment agendas, and is an innovator in using aid flows to mobilise significant additional and responsible resources from the private sector, according to a new OECD report.
The DAC Peer Review of the Netherlands expresses concern, however, over cuts to the country’s aid budget that come on top of a requirement to report all refugee costs and climate finance as official development assistance (ODA). This may divert funds from core development projects.
The Netherlands is able to raise development issues in international trade meetings by having the same minister responsible for trade and development. Collaboration between the economy, health and foreign affairs ministries enabled the Netherlands to increase access to medicines in the poorest countries by persuading the EU to allow cheaper generic drugs to be produced there. The Netherlands is also a good humanitarian and multilateral partner, with a strong focus on sexual reproductive health and rights.
The Netherlands has actively used ODA to help poor countries increase their tax revenues and to attract private finance to help combat and protect against climate change. It has also promoted a strong role for the private sector in development for over a decade. This means that total financial flows from the Netherlands to developing countries far outweigh ODA. The Review recommends more monitoring of total development flows and keeping appropriate checks and balances on private sector activities stemming from the combination of aid, trade and investment.
“After an excellent 30-year record as one of the DAC’s most generous and predictable donors, Dutch aid is now on a downwards trend and the cost of meeting international legal obligations to host refugees has eaten into future funds for overseas projects,” said DAC Chair Charlotte Petri Gornitzka, launching the Review in The Hague. “We hope the Netherlands can stem the decline in ODA, and at the same time reassert its leadership and reputation for high quality aid.”
The Netherlands exceeded the UN ODA target of 0.7% of gross national income (GNI) every year from 1975 to 2012, but dropped below 0.7% in 2013 and 2014. Although the ratio rose again to 0.75% in 2015, preliminary data for 2016 indicates a drop back to 0.65%, and budget projections recently sent to parliament indicate further steep cuts over 2017 to 2019.
Furthermore, a requirement introduced by the government in 2012 for all refugee costs to be reported as ODA, taking advantage of DAC rules allowing the first year of in-donor refugee costs to be counted as ODA, saw the cost of hosting refugees rise from 11% of bilateral ODA in 2011 to 32% in 2015 as a result of the unprecedented number of asylum applications.
The top six recipients of Dutch aid in 2015 were Ethiopia, Bangladesh, Afghanistan, South Sudan, Rwanda and Syria. The Netherlands sent only 18.1% of its country-specific ODA to least-developed countries in 2015, below a DAC average of 28.4%.
The Review praised a shift in the Netherlands to more innovative and flexible funding models but cautioned this could lead to a lesser focus on recipient country systems and could weaken mutual accountability between the Netherlands and recipient countries. It recommends a review of new instruments and tenders, particularly in private sector development, and warns against adding too many new priorities when resources are stretched.
Each DAC member is reviewed every five years in order to monitor its performance, hold it accountable for past commitments and recommend improvements. Reviews use input from officials in the country concerned and a partner country – Bangladesh for this Review – as well as civil society and the private sector. Read more on DAC Peer Reviews.
The Netherlands fully implemented seven and partially implemented nine of 21 recommendations made in its last Peer Review in 2011. Five recommendations have not been implemented.
The DAC Peer Review of the Netherlands is available at: www.oecd.org/dac/oecd-development-co-operation-peer-reviews-the-netherlands-2017-9789264278363-en.htm
For further information journalists are invited to contact the OECD Media Office (+33 1 45 24 97 00).
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