‘Investing in Global Prospects’: The new Netherlands Global Aid Policy strategy

https://www.government.nl/latest/news/2018/05/18/minister-sigrid-kaag-pr...

The document sets out the points Ms Kaag will focus on during the government’s term in office. ‘A greater focus on prevention is desperately needed,’ says the minister. ‘Greater efforts now will mean less human suffering in the future, and it will save billions in emergency aid, reception in the region of origin and reconstruction. That’s better for the world and better for the Netherlands.’

Another distinctive element of the document is the proactive trade and investment agenda, designed to help ensure that significantly more small and medium-sized enterprises (SMEs), including startups, become active internationally. Opportunities for the private sector to contribute to the Sustainable Development Goals (SDGs) will also be expanded, now that the markets for this are growing.

Unstable regions

In line with the minister’s prevention agenda, development policy will shift its focus to fragile states close to Europe. The Sahel, the Horn of Africa, the Middle East and North Africa will become new focus regions, due in part to the high incidence of extreme poverty in these regions. ‘Greater efforts to boost stability, reduce poverty and promote economic growth that benefits all are also an investment in combating irregular migration and the human suffering that accompanies it.’ An annual amount of €60 million will be made available for new programmes focusing on education (including vocational education), work and income for young people in these focus regions.

Women's rights

Efforts to combat other root causes of poverty in the focus regions can also count on additional resources. Shifting programmes to these regions will increase funding by at least one third. There will be a focus on the rights of women and girls in all policy areas. ‘Improving their position, as well as their sexual and economic rights, will have a significant impact on their prospects of a better life.’ More funding will also be made available for strengthening the rule of law and civilian protection, which will also help enhance the investment climate for businesses in the longer term.

Climate

A new climate fund will be established for investment in developing countries, since it is these countries that bear the brunt of climate change. Dutch businesses and knowledge institutions will play a major role in this regard. Their world-renowned expertise can help the countries in question move forward as well as tap into profitable new markets. Each year, €40 million will be injected into this climate investment fund. In due course, this money should lead to investments worth many times this amount through private sector participation. An additional €40 million will be spent on climate and development in other ways.

Innovative emergency aid

The coalition agreement also pledged an increased contribution in the areas of humanitarian assistance and reception in the region of origin. In total, an additional €280 million will be set aside annually for this purpose. Ms Kaag wants to particularly focus on innovation to support the millions of refugees and displaced persons, such as more effective use of digital data and cash aid. Another important area is psychosocial support for people in conflict zones. ‘Often, these people have seen or been subjected to terrible atrocities. Fleeing in itself is stressful, and distressing events on top of this can lead to trauma, requiring specialist treatment. At present there is not enough provision for this,’ says Ms Kaag. She points to the fact that good psychosocial support is not only vital for traumatised individuals themselves, but is also just as important for their family members and those in their wider circle. It can also prevent people from becoming susceptible to radicalisation as a result of unprocessed emotions and frustration.

Earning capacity

The Netherlands is the world’s fourth most competitive economy. A third of our national income and jobs come from foreign trade. Maintaining and, where possible, strengthening our international earning capacity is essential to our prosperity. This requires a proactive trade agenda. ‘Dutch businesses are major players in several sectors, like water, food and logistics,’ says Ms Kaag. ‘They  are the perfect candidates to help develop solutions for the major social issues our world is currently facing, as set out in the SDGs. That’s good for them, for the Netherlands, and for the countries where they do business.’ That is why Ms Kaag is sharpening the focus in economic diplomacy on innovation cooperation and on tapping into new markets. Businesses, knowledge institutions and the government are also being strongly encouraged to pool their resources.

SMEs

There are still plenty more opportunities for SMEs in particular. ‘And we’re going to help them make the most of these opportunities. That’s why we’re going to work to improve services provided to SMEs and startups doing or seeking to do business abroad,’ says the minister. This includes combating fragmentation in order to ensure optimal services. Another important topic is that, in these times of increasing protectionism, the Netherlands will continue to promote maintaining and deepening the multilateral trade system, with a focus on issues such as ensuring a level playing field and sustainability.

SDGs

The 17 Sustainable Development Goals (SDGs) agreed in 2015 by all UN members are the thread running through the minister’s policy. The most striking SDG is ending extreme poverty in all its forms by 2030. But the SDGs also cover other essential issues like eradicating hunger, ensuring good education for all, promoting equal rights for men and women and creating sustainable consumption and production. ‘The ambitions are as big as they are unavoidable,’ says Ms Kaag. ‘A liveable world is in all our interests: the public, businesses and governments. That requires an enormous combined effort. The Netherlands is ready to invest in that prospect.’ And a new SDG fund – a partnership between government, businesses, civil society and knowledge institutions – will be launched to support this endeavour.

SUMMARY

The Netherlands in the world

Prosperity and security in the Netherlands are closely connected to the world around us. This

presents opportunities and challenges. In many ways the world keeps getting better. For example,

the number of people living in extreme poverty has declined sharply, while access to basic services such

as clean water, healthcare and education has improved dramatically. In many developing countries,

these improvements have been supported by economic growth. The Netherlands, too, is thriving

economically. It is an important trading nation and one of the world’s most innovative and competitive

economies.

At the same time, the Netherlands’ policy on Foreign Trade and Development Cooperation (BHOS)

must respond to major changes and serious challenges: growing conflict and instability, large flows of

refugees and migrants, the continued existence of extreme poverty in developing countries, high levels

of population growth in certain regions, climate change, inequality of opportunity, rapid technological

developments and digitalisation, rising protectionism, steep international competition and a looming

trade war.

This policy document shows how the government is responding to these international challenges

and opportunities in the interests of the Netherlands. In doing so, it fleshes out various policies

announced in the coalition agreement, making clear in particular that Dutch development cooperation

– as an integral component of foreign policy – will target the root causes of poverty, migration,

terrorism and climate change. In addition, the document explains how the government is approaching

its ambition to maintain the Netherlands’ position as one of the top-five most competitive economies

in the world. The document is aligned with other policies, such as the Integrated International Security

Strategy, the Defence White Paper and the Integrated Migration Agenda.

Objectives and approach

The updated BHOS policy promotes four closely connected objectives:

• preventing conflict and instability;

• reducing poverty and social inequality;

• promoting sustainable and inclusive growth and climate action worldwide;

• enhancing the Netherlands’ international earning capacity.

This includes improving the protection and prospects of refugees and displaced persons in host

countries in the region of origin, and preventing irregular migration.

A cross-cutting goal of BHOS policy is to advance gender equality and improve the position of women

and girls. Discrimination against women is visible in all aspects of society, which means that gender

equality requires active attention in all areas of BHOS policy.

The 17 Sustainable Development Goals (SDGs) for 2030, as agreed by the United Nations, are the

international guiding principles for BHOS policy. Together they constitute the ultimate prevention

agenda, in the sense that working towards them helps prevent conflict and instability, which is a key

goal of the new policy. The SDGs promote human rights and the rights of women and girls and seek to

improve the lives of the most disadvantaged (under the motto ‘Leave no one behind’). The SDGs also

constitute an agenda for innovation and provide businesses with an opportunity to tap into new

markets by developing innovative solutions for achieving them. Finally, for the first time, the SDGs

offer a universal agenda for international cooperation.

In order to bring the SDGs closer, we need to work in new ways, mobilise innovative financing

mechanisms and employ – and stimulate the development of – digital and other new technologies.

Through its new BHOS policy, the Netherlands will promote innovation in support of the SDGs. We will

pursue an innovative approach ourselves wherever possible and challenge our partners to do the

same.

When it comes to implementing BHOS policy, the Netherlands works closely with civil society,

businesses and knowledge institutions. In developing countries, we tailor our activities to national

plans, including those for SDG implementation. At international level, the EU and like-minded EU

member states are natural partners, along with multilateral development banks and UN agencies.

In accordance with the policy changes, the result areas and indicators of BHOS policy will be aligned

with the SDG framework where possible.

In order to be able to take all necessary measures to contribute as much as possible to the SDGs, the

government needs to take steps that are compatible with the reaffirmation of the international

agreement concluded at EU and UN level to once again work towards a development budget

amounting to 0.7% of gross national income (GNI) by 2030. The spending increases outlined in the

coalition agreement, which are discussed in this document, represent an important step during the

present government’s term of office. During this period, potential follow-up steps will be thoroughly

examined at the appropriate time in the light of the prevailing humanitarian and development

situation, government-wide priorities and the agreed budgetary framework.

Development cooperation to focus more on unstable regions

BHOS policy will focus more on preventing conflicts and combating instability and insecurity.

Problems like poverty, conflict, terrorism, climate change, population growth and irregular

migration are closely intertwined. A growing number of countries in Europe’s vicinity are wrestling

with these problems, particularly in the Sahel, the Horn of Africa, the Middle East and North Africa.

Moreover, extreme poverty in the world is becoming more and more concentrated in fragile regions.

It is in everyone’s interest to tackle the root causes of these problems in cooperation with the countries

themselves. The rapidly expanding youth cohort in these countries needs the prospect of a future

that includes employment, education, equal opportunities and security. Improving the position of

women and girls also plays a crucial role in this regard. The government is therefore investing in

programmes that specifically target these groups. Joint efforts in support of stability, poverty reduction

and inclusive growth also constitute a structural and long-term investment in limiting the pressures

associated with refugees, internally displaced persons and migrants.

Key policy priorities:

• The West African Sahel, the Horn of Africa, North Africa and the Middle East will become the focus

regions for development cooperation.

• The Netherlands will invest €60 million annually in new programmes supporting general and

vocational education, employment and income equality for young people and women in the focus

regions.

• Existing efforts in the fields of water, agriculture, sexual and reproductive health and rights

(SRHR), climate change, the rule of law and private sector development will increasingly target the

focus regions; spending in these regions will thus increase by at least one third.

• The Netherlands will set aside an additional €290 million for emergency aid and the humane

reception and protection of refugees in the region of origin, while also intensifying its efforts in

the field of humanitarian diplomacy.

Climate action and mobilising the private sector for sustainable and inclusive

growth

The Netherlands and developing countries have a shared interest in sustainability and inclusive

growth worldwide, since respect for human rights, nature and the environment and equal opportunities

for all are preconditions for future prosperity and development. The government is

contributing to this goal through its combined agenda on Foreign Trade and Development Cooperation,

in line with the Paris climate agreement and the SDGs. In order to realise these high ambitions, we

must support developing countries in their efforts to tackle the consequences of climate change and

strengthen their economies. We should take advantage of the opportunities provided by digital and

other new technologies and ensure that the private sector, both in the Netherlands and abroad, can tap

into new markets by developing innovative solutions for achieving the SDGs. In this context, the

Netherlands actively promotes corporate social responsibility, fair and sustainable global value chains

and a future-proof multilateral trade and investment system that stimulates sustainable growth and

development.

Key policy priorities:

• The government will establish a national climate and development fund (€40 million annually)

for investments in climate adaptation and mitigation in developing countries.

• Businesses and knowledge institutions will be challenged and supported to contribute to the

achievement of the SDGs. Emphasis will be placed on those specific SDGs where Dutch knowledge

and expertise can truly make a difference at international level and where opportunities exist to

tap into new markets.

• The government will develop a digital strategy in order to take advantage of the opportunities

offered by digital technology for sustainable and inclusive growth.

• In the context of its policies on sustainable value chains and corporate social responsibility, the

government will scale up its activities for eliminating child labour and for promoting a living wage,

and will emphasise effective implementation and expansion of the voluntary agreements on

international corporate social responsibility.

• The Netherlands is a strong advocate of maintaining and strengthening the multilateral trade and

investment system. Among other initiatives, the government has produced a new model text for

bilateral investment agreements, which it intends to renegotiate in order to strike a better balance

between the rights and obligations of governments and investors.

A proactive trade and investment agenda

In order to secure the highest possible return on trade and investment promotion, public and

private actors must join forces and concentrate their efforts more on those markets that are most

important to the Netherlands, with greater emphasis on small and medium-sized enterprises

(SMEs) and startups. The Netherlands is the fourth most competitive economy in the world. This pays

off: the Netherlands owes a third of its jobs and national income to foreign trade. Nevertheless, this

strong international position should not be taken for granted. It is vital that the Netherlands maintain

access to international markets. This requires an international level playing field, maintaining our share

in existing markets, tapping into new markets, encouraging companies to become active internationally

and promoting an attractive business climate at home. In addition, the Netherlands must continue

investing in knowledge, innovation and digitalisation, and with this position itself internationally as a

valuable partner.