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Business and Economy.
The
Dutch economy is an advanced one with a per capita income that puts it in 15th
place in the world in 2002. Above all the Dutch economy is characterised by its
openness and international orientation.
The evidence can be found in the exports and imports of goods and services,
each equal to more than 60% of GDP. The openness of the Dutch economy may also
be seen from the Netherlands’ success in recent years in attracting direct
foreign investment (DFI). For many years now the Netherlands has been held up
by various organisations (such as the Economist Intelligence Unit and the
International Institute for Management Development) as one of the most
attractive destinations for DFI. Apart from being a major recipient of DFI, the
Netherlands itself invests heavily in other countries.
Export-oriented
With a share of 14.6% of the total added value generated in the
Netherlands, the role of the industrial sector is modest in comparison with
that in many other western countries. The limited scale of the domestic market
means that industry is of necessity export-oriented. On top of that, the lack
of raw materials leaves industry heavily dependent on imports. Among the
leading segments of the industrial sector are food, tobacco and beverages, the
chemical industry and the metal industry.
Sizeable services sector
With a share in total added value of 80.4%, the services sector is
comparatively large. In particular it covers commercial services, which account
for 55% of total added value. Big players are financial and business services
(26.5% of total added value), wholesaling and retailing (12.8%) and transport,
storage and communication (7.2%).
Big in horticultural products
Compared with most other western countries the Netherlands has a large
agricultural sector, with a share of 2.5% of total added value. It is the world
market leader for horticultural products and also a major exporter of meat and
dairy products.
Trading nation
The Netherlands is a big trading nation. In 2002 it accounted for 3.8% (USD
243.4 billion) of world goods exports and 3.3% (USD 217.7 billion) of world
goods imports, making it one of the ten most important merchandise exporting
and importing countries in the world. In the league table of exporting and
importing countries of commercial services the Netherlands was in eighth and
seventh place respectively in 2002, with shares of 3.6% (USD 54.7 billion of
exports) and 3.7% (USD 55.9 billion of imports).
Important distributor
Partly on account of its geographical location, the Netherlands has carved
out a role for itself as the distribution centre of Europe. This goes a long
way to explaining the high level of Dutch trade. As much as 40% of goods
exports consist of re-exports – goods imported into the Netherlands which then
leave the country again after undergoing little if any processing. Ownership of
these goods must however be transferred to a Dutch resident. In particular this
consists of a flow of goods from the US and Asia reaching the European market
via the Netherlands.
EU-oriented
The lion's share of Dutch goods exports goes to countries within the EU,
especially neighbouring Germany. Eastern Europe and North America have however
become more important export markets in recent years. The average growth of
goods exports to Eastern Europe (13%) and North America (12%) during the period
1998-2002 was substantially higher than the average growth of total exports
(7%). The European Union has also been dominant on the import side, although
imports from the emerging markets in Eastern Europe, Asia, Latin America and
Africa have become more important. The average growth of imports from these
countries has been much higher over the past five years than the total growth
of imports (6%).
 Leading export
products
Four-fifths of
Dutch exports consist of merchandise. Dutch firms chiefly export capital goods
(especially machinery and transport equipment) and chemical and agricultural
products. Last year capital goods amounted to roughly a third of the export
package. Recent years have seen a fall in the share of agricultural products in the
export package.
From services to direct investment
Dutch exports of services consist primarily of business services, transport
services and travel. International services also increasingly take the form of
direct investment in foreign service companies.
Explosive growth of investment in Eastern Europe
The EU and the US are the most important destinations of Dutch direct
foreign investment, jointly accounting for nearly 80% of the total. A notable
feature has been the strong growth in direct foreign investment in Eastern
Europe: the average growth over the past five years exceeds that in any
other region.
Economy
The worldwide economic dip has not left the Netherlands unscathed. Economic
growth has been hovering around zero for two years now – worse than that in the
other EU member states, apart from Germany. This is due not just to the
disappointing international economic situation; other contributory factors have
been a deterioration in the Netherlands’ competitiveness on account of the
relatively high wage increases, plus the appreciation of the euro. Add the
adverse development of house prices and share prices and the unfavourable
picture is explained.
Favourable expectations
But there is light on the horizon. Since 2004 there appears to be
a cautious worldwide economic recovery, spearheaded by the United States.
If the recovery is sustained, the Netherlands will be able to benefit
from this, starting with a revival in exports.
Share of sectors in total added value,
2002 (%)
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Agriculture, forestry and fisheries
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2.5
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Mining
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2.6
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Industry
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14.6
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Of which:
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Food, tobacco and beverages
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3.2
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Printing and publishing
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1.4
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Chemicals,
including rubber and plastics
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2.3
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Metals
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1.5
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Other
industry
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6.2
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Construction
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5.9
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Trade, hospitality industry and repairs
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14.9
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Transport, storage and communication
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7.2
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Financial and business services
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26.5
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Public sector
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11.7
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Other services
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14.2
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Key figures on the Dutch economy (% less
indicated otherwise)
|
|
2001
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2002
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2003
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2004
|
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GDP (real
growth)
|
1.3
|
0.2
|
0
|
1¼
|
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Unemployment
(% labour force)
|
3.3
|
3.9
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5½
|
6¾
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Inflation
|
4.5
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3.5
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2¼
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1¼
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Government
account (% GDP)
|
0.1
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-1.3
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-1.9
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-2.6
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Goods
exports, excluding energy (real growth)
|
0.9
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-2.2
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½
|
5
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Of which produced domestically
|
-0.8
|
-0.6
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-2¼
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2¼
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Goods
imports (real growth)
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1.4
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-2.2
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1¾
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5
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Geographical breakdown of goods exports (2002)
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Billions of euros
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Share (%)
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Average growth 1998-2002 (%)
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EU
|
177
|
76
|
6
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Eastern Europe
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11
|
4
|
13
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Other Western Europe
|
10
|
4
|
8
|
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North America
|
12
|
5
|
12
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Latin America
|
3
|
1
|
4
|
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Asia and Oceania
|
17
|
7
|
7
|
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Africa
|
4
|
2
|
7
|
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World
|
234
|
100
|
7
|
|
|
|
|
|
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Geographical breakdown of
goods imports (2002)
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|
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Billions of euros
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Share (%)
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Average growth 1998-2002 (%)
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EU
|
116
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57
|
4
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Eastern Europe
|
9
|
4
|
14
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Other Western Europe
|
8
|
4
|
6
|
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North America
|
19
|
9
|
5
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Latin America
|
6
|
3
|
10
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Asia and Oceania
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42
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20
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11
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Africa
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5
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2
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10
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World
|
205
|
100
|
6
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Sources: Statistics Netherlands, CPB
Netherlands Bureau for Economic Policy Analysis
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