Dutch government changes policy: enabling instead of helping developing countries
October 10, 2010
In January of this year the Academic Advisory Council for the Dutch Government (Wetenschappelijk Raad voor het Regeringsbeleid) advised the Dutch Minister of Development Co-operation to drastically change its policy: start investing in self-reliant people and in private sector development in Developing Countries instead of (old fashioned) aid-programmes.
After some initial media attention, many of these reports disappear in oblivion after a few weeks. How remarkable that this advice stayed in the limelight for months. It was subject to fierce discussion in the sector itself (which was logical given the big budget cuts proposed), but also in broader society.
‘The Liberal Party (VVD) proposes to cut the budget for Development Co-operation by 50%’, reported many media a few months ago. In fact the VVD also proposed in their Party Program for the elections in June 2010 to change the focus from aid to private sector development. Under influence of new coalition partner CDA, VVD didn’t achieve its goal to cut the budget in half, but the Coalition Agreement of the upcoming government was clear about the shift in policy:
“The starting point is to go from aid and relief to invest in self-reliance in developing countries.....
Within the budget for Development Cooperation there will be a strong expansion and extra opportunities for Dutch business. Development of the private sector will be one of the priorities”
Within the budget for Development Cooperation there will be a strong expansion and extra opportunities for Dutch business. Development of the private sector will be one of the priorities”
Private sector development has some real potential. To name a few opportunities:
· Countries/regions are enabled to develop specialties: e.g. a strong logistic sector or flower growing sector, whatever fits your
geography, climate, infrastructure, workforce or knowledge. Whatever it takes to win a battle in the ever-more globalised market place.
geography, climate, infrastructure, workforce or knowledge. Whatever it takes to win a battle in the ever-more globalised market place.
· Companies (there and here) are stimulated to co-operate: develop products, transfer knowledge, outsource services etc.
· The financial sector, the’ big enabler’, will see this as an extra stimulus to further invest in developing countries and emerging markets.
· But most importantly: People are stimulated to become entrepreneurs and in this way develop skills. But above all, they get the opportunity to feel proud about their accomplishments.
However, this upside potential can easily be frustrated by negative effects such as governance malpractice, social inequality issues or pollution. It is our duty as a well-off country to help these private sectors to develop responsibly. One way to do this is by set appropriate conditions for sustainable development when money is invested. Another is evaluating projects and investments through impact assessments.
Enabling instead of helping, or trade instead of aid, that’s the new course for Dutch Development Co-Operation. Although aid for hunger relief or crises should definitely not be abandoned, we believe this course in Development Co-operation will serve developing countries well. But sustainability conditions and impact assessments should be part of the deal.
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