Dutch Reforms Less Money, More Results

This article was last updated on April 16, 2022

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The leaders of the coalition partners in the minority government of  The Netherlands decided to lock themselves in for the coming three weeks in order to bring the budget for 2012 in line with the requirements of the EU. Since this means a maximum budget deficit of 3%, it implies budget cuts between 9 and 16 bln. euro (exact figures yet unknown). Mr. Wilders whose (freedom) party supports the coalition, suggested (or insisted) that part of the money will be cut from the development cooperation budget.
 
As was to be expected this suggestion met with great resistance. In the first place from those whose livelihood depends on subsidies originating from this budget; (I)NGO’s, Universities, Consultants, Think Tanks, Development Experts, Publications, Consciousness Organizations and more. There was also an emotional appeal by well-known politicians and other public figures under the heading “Investing in development cooperation is investing in the future”. Then there is the quite understandable appeal on international solidarity with the poor who live on less than a dollar a day.
Reactions on the internet on those appeals are rather mixed and vary from “We are morally obliged to support the poor” to “We will first have to bring our house in order” and  “The Netherlands will lose much of its international standing if cutting on aid”. What is striking is the general lack of trust in the effectiveness of the Dutch aid effort; does the aid really reach the poor?  The “developers” clearly have an image problem.
Reality however goes far beyond an image problem.
 
  1. -International flows of capital, also to developing countries, are much  bigger than the flow of development aid.
  2. -Development does not depend on the amount of aid capital flowing to developing countries. Countries like Malaysia, Thailand and Singapore never received large amounts of aid, but are doing rather well.
  3. -China, India and Brazil are stories on their own, but definitely their development had nothing to do with aid flows, but everything with the creation of economic structures conducive to growth. These countries still have large problems with poverty but will not refer to aid to solve those problems.
  4. -In Africa many countries avail of natural resources, like Congo and Angola. The appalling poverty in those countries is not due to lack of financial resources but the lack of competent and dedicated politicians. Mali and Rwanda are in a process of development. Not because of development cooperation but because local structures have been created that stimulate development.
  5. -It seems that “donor darlings” like Bolivia, Bangladesh and Tanzania still have problems to overcome their earlier aid dependence.
As such this situation does not provide reasons to cut on the development cooperation budget. Its does however point to the necessity to overhaul the way The Netherlands deals with their partners in development.
 
International Non- Governmental Organizations recognized the need to change course and are desperately seeking for reasons to survive. They tried to find a new “paradigm” by redefining the objectives of aid and expanding those objectives with the care for international goods. (http://www.thebroker.eu). Apparently they accepted that their contribution to poverty eradication would always be marginal as local structures, which they could hardly influence, are decisive for failure or success.
Also the World Bank took another tack by designing a programme that will only disburse after the activity has been implemented successfully, and not on the basis nicely formulated plans. A design that according to a press release of the Dutch Ministry of Foreign Affairs was embraced by State Secretary Knapen. Already, in March 2010, I promoted this idea in my blogpost  “Towards performance based financing in development cooperation” on http://www.thebroker.eu, but despite Mr.Knapen’s position up till now it was not translated into policy. That is a pity as it would give a boost to the image of the development cooperation effort and would make it easier to resist the present right wing onslaught on the budget. Perhaps we could do with a smaller budget if only successes are financed?
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