Aid and trade remain the policy focus of the Dutch Ministry of Foreign Affairs. In February this year the IOB (the Ministry’s evaluation service) published a report on the development impact of businesses funded from the development cooperation budget. Four months later, on June 24th, the Dutch Minister for Foreign Trade and Development Cooperation, Liesje Schreinemacher, published her new policy paper, titled ‘Doing what the Netherlands is good at’.
At the request of Partos, The Broker compared the two documents to see how the IOB’s findings were incorporated into the new policy. The analysis (in Dutch) shows that it is still unclear to what extent IOB findings have been used as a knowledge basis for the new policy. The IOB is critical of Dutch companies’ ability to have a development impact whereas the new policy makes more money available for them. The question is thus how effective this will turn out for the mutual profit as envisaged by the minister?
Since 2012, successive Dutch cabinets have focused on combining aid and trade in development cooperation policy. The idea is that a greater role for Dutch companies in development cooperation would create a win-win situation: Dutch companies make money while contributing to sustainable development. The current cabinet continues this policy and will increase spending on aid and trade policy by EUR 134 million next year. This brings the total spending on the combined aid and trade efforts to 518 million euros and will be further increased to 571 million euros in 2027.
Overall, the IOB study suggests that focusing on the private sector within development cooperation is an obvious and relevant choice. After all, local economic development is an important precondition for job creation, self-reliance and poverty reduction. At the same time, the IOB is critical of how this agenda has been fleshed out by the Netherlands over the past decade.
The minister acknowledges that the IOB policy review makes a ‘number of critical comments’ on the combined aid and trade effort that aims to be mutually beneficial. According to the minister, she meets the IOB’s criticism in her new policy note ‘by bringing more focus to the BHOS policy’ through the selection of 14 combination countries, where development cooperation and trade promotion will be worked on simultaneously.
However, our analysis concludes there is still room to embed more lessons from the past for mutual benefit. Although the IOB is critical of the lack of development impact of Dutch companies, the policy note offers no reflection on why the development impact of companies has proved troublesome in the past. The IOB also calls for more guidance in aid and trade policy through better cooperation between the department responsible for aid and the department responsible for trade, but the policy does not yet offer concrete steps to improve this cooperation.
Today, the Parliament will debate the BHOS budget 2023. It will be interesting to hear how the minister will substantiate the ministry’s choice for a greater role for companies and related increased budget in relation to the questions around the effectiveness of mutual profit of aid and trade raised by the IOB.
Please read the full analysis (in Dutch) here
Find here the quick scan at the Partos website (in Dutch)