SUNS  4296 Wednesday 7 October 1998

Development: Dutch boost aid despite global decline



United Nations, Oct 5 (IPS/Thalif Deen) -- The Netherlands would continue boosting development assistance to the world's poorer nations - even as other Western donors cried poverty and slashed aid budgets - Eveline Herfkens, the new Dutch Minister for Development Cooperation, said Monday.

"We link our Official Development Assistance (ODA) to our Gross Domestic Product (GDP) - and since our economy has kept growing since 1996, so has our development aid," Herfkens told IPS.

The Netherlands was the world's sixth largest donor in absolute terms, and the third in relative (ODA/GDP) terms. "We certainly will continue to sustain it," she said.

Herfkens added that the new Dutch government, which took office in August, hoped other donors would follow the example of the Netherlands and thus reverse the declining support for developing nations.

The Netherlands economic growth was 3.3 percent each in 1996 and 1997, rising to an estimated 3.7 to 4.0 percent in 1998, and was expected to grow even further in 1999.

Last year, the Netherlands joined the big league when it was ranked behind Japan, France, the United States, Germany and the United Kingdom as the world's sixth largest donor beating out Canada, Sweden, Denmark and Norway, among the top ten.
The Netherlands also was one of only four Western donors - besides Denmark, Norway and Sweden - meeting the U.N. aid target of 0.7 percent of GDP set in the early 1970s. The Dutch contribution, in fact, has stood at more than 0.8 percent for several years.

Total Dutch ODA last year was 2.95 billion dollars compared with 9.36 billion dollars from Japan; 6.35 billion dollars contributed by France, 6.2 billion by the United States, 5.9 billion by Germany and 3.4 billion by UK.

Last year the total Dutch contribution to the U.N. family, including the World Bank and the International Monetary Fund (IMF), was about 700 million dollars.

"I am prepared to channel much more aid from my budget into the U.N. system if and where that system works," Herfkens said. "We are doing a lot now - and I am prepared to do more."

As a donor, the Netherlands was ranked first by the Food and Agriculture Organisation (FAO), number two in the U.N. Development Programme (UNDP) and number three in the International Labour Organisation (ILO), she said.

The rising trend of Dutch aid came at a time when ODA has declined significantly. In a report to the General Assembly last week U.N. Secretary-General Kofi Annan said that, since cuts in aid budgets in major industrial nations account for almost all of the recent decline in ODA, "it appears that longstanding international cooperation commitments are being re-examined."

The United States, once the largest donor, now was in third place behind Japan and France. U.S. aid ratio fell from 0.20 percent in 1992 to 0.08 in 1997.

Annan described the decline as "a new low"for the United States. There also had been major aid cutbacks - as a share of GDP - in France, Germany, and Italy, "taking these countries farther from the U.N. target."
"Thus, the trend of declining ODA flows from 1993 to the present continues," Annan said. "Indeed, over this period, the cumulative decline in ODA at constant prices and exchange rates has reached almost 25 percent (it remains over one fifth for ODA flows to countries currently deemed to be aid recipients)."

Asked if there was growing Dutch domestic support for increased development aid in the current climate, Herfkens said: "Yes, there is - and its wonderful." She said the support came not only from the public and non-governmental organisations (NGOs), but also from legislators.

"A character like Jesse Helms does not exist in the Netherlands," she said referring to the chairman of the Senate Foreign Relations Committee who has blocked U.S. funding of the U.N. system. Helms, who along with a Republican-controlled U.S. Congress has been voting against U.N. programmes, has said that "giving funds to the United Nations is like pouring money into a rathole."

"These are not the types of battles I have to fight. That makes my life that much more easier," she said.

Herfkens said the Dutch considered development aid an obligation. "We are the only country in the world where the constitution stipulates our obligation to support multilateralism," she added.

"I don't have to go round trying to defend my budget (for development aid). It is fantastic when you have lived elsewhere and come back home and see the support for development cooperation."

Herfkens said about 10% of aid automatically was channelled through NGOs and a lot of aid to governments went through multilateral agencies such as the United Nations and its affiliated bodies, Funds and Programmes.

Some of the U.N. Funds and Programmes, such as the U.N. Children's Fund (UNICEF), "are doing great work." So is the U.N. Population Fund (UNFPA) and the World Bank, she said. "Some are doing better than the others. It is a mixed record."

"Whenever there is a multilateral qualitatively good channel for aid, why reinvent the wheel?. Why would we use bilateral aid if the multilateral machinery is doing the job," she said.
Herfkens also said she is concerned about the possible impact of emergency assistance on long term development aid. "Internationally, it is true. There is a leakage. There is a lot of money that used to be available for structural aid that is now going into emergency aid."

She also pointed out that emergencies themselves were caused by lack of development. "If you withhold structural aid, you could cause new emergencies," she said

The London Financial Times reported only last week that the Netherlands currently enjoyed unprecedented prosperity, and was outpacing its rivals in Europe. "Once the sickman of Europe, the Netherlands now  boasts the continent's most competitive economy," the Times said.

The newspaper predicted that Dutch economic growth easily would outstrip that of most European rivals for some time to come, "thanks partly to the limited impact from economic turmoil in Asia and Russia."