THE DUTCH PERSPECTIVE

Monita Pesumal profiles one of the most vibrant and liberal economies in the world

By mid-October, the Netherlands was once again moving towards a partial lockdown to avoid a second wave of the coronavirus pandemic. In a televised press conference, Prime Minister Mark Rutte stated that the situation in the country’s three largest cities – Amsterdam, Rotterdam and The Hague – had become “serious” and required urgent action.

For the first time, wearing face masks was made mandatory in indoor spaces for those aged 13 and above. While many of their European counterparts had imposed compulsory restrictions, the Dutch largely stuck to voluntary guidelines even on mask wearing until then.

A maximum of 30 people were permitted to gather indoors and retail shopping hours were restricted. Public gatherings of four or more people were prohibited and the sale of alcohol in the evening was banned. Citizens were also advised against nonessential travel. Schools would remain open though and public transport kept the wheels of the economy running.

These restrictive measures were set to last for at least four weeks with the impact to be assessed in due course. Should they have proved ineffective, tougher regulations were to follow, according to a statement by Dutch Health Minister Hugo de Jonge at the time.

The Netherlands is the sixth largest economy in the Eurozone and 17th largest economy in the world. It ranks 13th based on per capita income – its per capita GDP exceeds US$ 53,000. The economy is backed by natural resources such as gas, petroleum, peat, limestone, salt, sand, gravel and farmland. Its primary export industries include food processing, chemicals, petroleum refining and electrical machinery.

Additionally, the Netherlands boasts a highly mechanised and productive agriculture sector, which places it among the top agricultural exporters globally.

The energy sector contributes substantially to the Dutch national economy by generating revenue, exports and jobs. Combining green energy and a modern industrial policy, the country aims to have a sustainable, reliable, modern and affordable energy system by 2050.

To this end, the Dutch aim to cut CO2 emissions by half to generate 40 percent of the country’s electricity requirement from eco-friendly alternatives such as wind at sea, solar and bio energy.


In the Netherlands, 98 percent of homes are connected to the gas grid; and 40 percent of primary energy is supplied by natural gas. The country has large energy intensive industry, and a sustainable and successful agriculture sector – both have thrived on the availability of cheap natural gas. Thanks to its greenhouses, the Netherlands is by some accounts the second largest agricultural exporter in the world after the US.

But this year, the Dutch economy is expected to shrink by 6.4 percent as lockdowns have crippled production and exports, and are set to catapult unemployment to the highest level in years. Growth is expected to resume at 2.9 percent and 2.4 percent in 2021 and 2022 respectively, leaving the economy smaller than before the pandemic.

The official Dutch unemployment rate, according to the ILO definition, was 4.6 percent in August although job losses increased by an average of 32,000 a month for a period of three months. Exports were down 2.3 percent in August compared to 2019 with oil and chemicals, machinery and engineering sectors the hardest hit.

Moreover, the Netherlands’ maritime industry comprises Europe’s largest shipping fleet, maritime services and knowledge institutes, maritime suppliers, offshore companies, the shipbuilding industry, manufacture of luxury yachts, hydraulics, the fisheries and aquatic industry, and ports.

The Dutch Port of Rotterdam, Europe’s largest seaport, processes 470 million tonnes annually while Amsterdam is the fourth largest port on the continent. As global lockdowns have led to less production, consumption and trade, Rotterdam port witnessed a 9.1 percent decrease in throughput in the first half of 2020 as a direct result of the economic impact of COVID-19.

Trendy upscale bars, gourmet restaurants, breathtaking windmills, vibrant tulip fields, 2,500 houseboats, 165 canals and waterways, paintings and hundreds of unusual museums make the kingdom rich in history and culture – and therefore, a must-see destination for tourists.

Over 600,000 people are employed in tourism, and work in hotels, restaurants and cafes. But 2020 saw only seven million tourists visit the country – far less than the 21 million that were expected. Predictions for 2020 arrivals were higher due to events set to take place this year including the revival of the Formula One race in Zandvoort and Eurovision Song Contest in Rotterdam. However, the coronavirus ensured none of that would materialise.

The wealthiest 10 percent of the population own approximately 60 percent of total wealth in the Netherlands mainly due to irregular tax policies. There is no capital gains tax; instead, there’s a fixed tax on financial assets and mortgage interest is tax-deductible, an advantage for high income earners who own large houses.

The Netherlands boasts a highly mechanised and productive agriculture sector, which places it among the top agricultural exporters globally