The nation with a big heart

Thanks to its buoyant economy, Holland is among the world's leading donors.

It's tough to decide why we love the Dutch. Romantics would say it's because of Van Gogh, Vermeer, their canals and tulips. Cheese connoisseurs would claim it's because of Gouda and Edam, while sports fans would scream that it's because of footballers such as Hendrik Johannes Cruijff, Ruud Gullit and Ruud van Nistelrooy.

It could well be due to the liberal cultural ethos of Amsterdam or the riveting beauty of Rotterdam. But all these reasons pale in comparison to the fact that the Dutch have for centuries battled nature and triumphed.

One-fifth of the Netherlands has been reclaimed from the sea — owing to its proximity to the North Sea and the Rhine. In fact, a common saying that goes around to mark this achievement is: 'God created the world but the Dutch created the Netherlands'.

This accomplishment, though, is just one aspect of its success. Centuries of experience living in harmony with water and its strategic position in Western Europe (between Germany and Belgium) has made the country an important hub and trading destination.

Exports, in particular, have helped put the Dutch economy on the international map. The Netherlands' excellent seaports and airports have also helped. The Port of Rotterdam, which is one of the largest and busiest ports in the Netherlands and Europe, handled around 196 million tonnes of cargo in the first half of 2007, 4.2 per cent more than the same period last year.

Amsterdam Schiphol Airport, the main airport in the Netherlands, served about 22.4 million passengers during the first half of 2007, an increase of 3.9 per cent compared to the same period in 2006. More than 765,000 tonnes of cargo was also transported via Schiphol Airport, a 3.6 per cent increase compared to the same period last year.

The Dutch are leaders in water and environmental management and maritime industries. The Dutch dredging sector, for instance, is considered a leader in its field. In fact, a report on the Holland Trade website states that no less than 60 per cent of the dredgers operational worldwide were built at Dutch shipyards.

The agricultural sector, known for its dairy and horticultural products, is also important for the country. According to the Agency for International Business and Cooperation (EVD), a part of the Dutch Ministry of Economic Affairs, the sector contributed almost three per cent of the GDP in 2005, which is higher than the EU average. The Netherlands is also a leading global exporter of dairy products, meat, flowers and bulbs, considering that 60 per cent of the total agricultural production is exported.

Exports of food products (excluding drinks and tobacco) accounted for 11.6 per cent of total exports of goods in 2005. According to EVD, the fishing industry also plays a significant role in the economy. The Netherlands is a major fish producer among EU member states, with the total catch exceeded only by that of Denmark, France, Spain and the UK.

Other sectors that are important to the economy include oil and natural gas. The Slochteren gas fields in Groningen Province in the north of the country are among the world's largest-producing natural gas fields. The construction industry is also an important contributor to the country's GDP.

According to the EVD, various Dutch civil engineering contractors operate on a global scale typically using expertise gained in major national land and flood protection programmes. The construction industry's share of the GDP in 2005 was 4.7 per cent (5.3 per cent of gross value added).

The country's financial sector is crucial to the Dutch economy as is the transport sector. The Dutch transport sector operates globally, and makes a significant contribution in Europe to road haulage and internal water freight and airfreight.

The logistics industry in the Netherlands is also an important player in the global logistic sector. Some of the Dutch companies that have an international presence in the sector include as Exel, Vos Logistics, Frans Maas Groep, TNT Logistics and DHL Solutions.

Attractive destination

An open economy and a favourable tax treatment for profits earned by multinationals have also made the Netherlands an attractive destination for foreign direct investment (FDI). Investment inflows in 2006 touched $5.4 billion or about Dh20 billion (source: EVD).

International comparisons of the major economies by both the Economist Intelligence Unit and others (such as the World Competitiveness Yearbook produced by the International Institute for Management Development) have consistently ranked the Netherlands as one of the most attractive destinations for FDI. Investment initiatives have also attracted a variety of foreign firms in recent years, including Polaroid, Esso, Dow Chemical, Fuji, Nissan, Engelhardt, Amsco, Thorn EMI and Rank Xerox.

All these sectors and sound economic policies have carved the Netherlands' path to becoming one of the world's wealthiest economies. According to a preliminary official estimate, Dutch GDP growth was 2.4 per cent year-on-year in the second quarter of 2007, virtually the same as in the first quarter. Compared with 2006, economic growth in the first half of this year has been severely curbed by the lower production of natural gas (source: EVD). The Economist Intelligence Unit, though, maintains its forecast of GDP growth of 2.4 per cent in 2007 and of 2.3 per cent in 2008.

Robust growth

According to EVD, economic growth accelerated to three per cent in 2006 (after a weak performance in 2005), mainly due to stronger domestic demand. Exports — one of the most important pillars of the Dutch economy — also did well in 2006 due to strong demand in the euro area and the world economy. Germany, Belgium and the UK were the top-three destinations for the country's exports in 2006.

Buoyant producer confidence, rising corporate profits and strong growth in new orders contributed to a solid rise in investment spending in 2006. Business investment is also expected to remain robust in 2007 and 2008, driven by further strong growth in profits, good financing conditions and the need for modernisation. Corporate tax reductions will also help to boost companies' financial positions and free up funds for higher investment.

While these factors will boost the Dutch economy's profile among its peers, it's also important to laud their commitment to helping developing nations around the world. According to the 2006 edition of the 'Commitment to Development' Index, the Netherlands, for the second time in three years, topped the world's wealthiest 21 donor nations for its policies to promote development in poorer countries.

In 2006, the Dutch government announced that it had pledged $201 million (about Dh740 million) to Unicef to radically expand the agency's ongoing efforts to ensure that children in conflict, natural disasters and emerging from crisis can go to school. It is the single-largest donation that Unicef has received in its 60-year history.

Another important humanitarian initiative in 2006 was the government of the Netherlands' support of the Unicef's launch of the 'All Girls to School' campaign in the West African nation of Benin. The Dutch government donated $7.6 million (about Dh28 million) to the effort. The grant, spread across three years, will assist in bringing education to girls in the community.

Such initiatives reflect the great values of this enterprising nation, which has maintained its simple values of hard work and determination while still being competitive and incredibly generous — all of which comes so naturally to them.