Background Notes: Netherlands

PA/PC Source: Office of Public Communication, Bureau of Public Affairs Date: Jan 15, 19911/15/91 Category: Country Data Region: Europe Country: Netherlands Subject: Travel, History, International Organizations, Trade/Economics [TEXT] January 1991 Official Name: Kingdom of the Netherlands

PROFILE

Geography
Area: 41,473 sq. km. (16,464 sq. mi.). Cities: Capital- Amsterdam (pop. 687,450). Others-The Hague, seat of government, (pop. 449,350); Rotterdam, principal port (pop. 558,850); Utrecht (pop. 231,750). Terrain: Coastal lowland. Climate: Northern maritime.
People
Population: 15 million. Nationality: Noun-Dutchmen and Dutchwomen. Adjective-Dutch. Ethnic Groups: Predominantly Dutch; largest minority communities are Moroccans, Turks, Surinamese, and Indonesians. Religions: Roman Catholic, Protestant, non-affiliated, and other. Language: Dutch. Education: Years compulsory-10. Attendance-nearly 100%. Literacy-98%. Health: Infant mortality rate-6/1,000. Life expectancy-76 yrs. (males, 73 yrs.; females, 79 yrs.). Work force (1985): 6 million. Agriculture-1.4%, Trade-17%, Industry-30%, Services-45%. Of the above total, government-23% of the work force.
Government
Type: Parliamentary democracy under a constitutional monarch. Constitution: 1814 and 1848. Branches: Executive-monarch (chief of state), prime minister (head of government), Cabinet. Legislative-Bicameral Parliament (First and Second Chambers). Judicial-Supreme Court. Subdivisions: 12 provinces. Political parties: Christian Democratic Appeal (CDA), Labor Party (PvdA), Liberal Party (VVD), Democrats '66 (D'66), other minor parties. Suffrage: Universal over 18. Defense (1989): 2.9% of GNP. Flag: Three horizontal stripes: red, white, and blue, from top to bottom.
Economy
GNP (1989): $224 billion; (1988) $227 billion. GNP per capita (1988): $15,000. Annual growth rate (1989): 4.2%. Per capita income (1989) $13,500. Inflation (1989): 1%; 1988: 0.7%. Unemployment (1989): 6%; (1988): 6%. Gov't deficit/GNP (1989): 5% (US: 3%). Natural resources: Natural gas. Agriculture (4% of Net National Income (NNI)): Products-dairy, poultry, meat, flower bulbs, cut flowers, vegetables/fruits, sugar beets, potatoes, wheat, barley, oats. Industry (19% of NNI): Types-steel, metal products, electronics, bulk chemicals, natural gas, petroleum products, transport equipment. Trade (1989): Exports-$103 billion: mineral fuels, chemical products, machinery and transport equipment, foodstuffs. Imports- $104 billion: mineral fuels and crude petroleum, machinery, chemical products, foodstuffs. Major trade partners-FRG, Belgium, Luxembourg, France, UK, US. Official exchange rate (average 1989): 2 Dutch guilders= US $1. Foreign Development aid: 1.5% of NNI, (1990 est.: $3 billion).
Membership in International Organizations
UN, North Atlantic Treaty Organization (NATO), European Community (EC), Organization for Economic Cooperation and Development (OECD), International Energy Agency (IEA), International Atomic Energy Agency (IAEA), European Monetary System, BENELUX Economic Union, European Space Agency (ESA), INTELSAT, Western European Union, others.

PEOPLE

The Dutch are primarily of Germanic stock with some Gallo- Celtic mixture. They have clung tenaciously to their small homeland against the constant threat of destruction by the North Sea and recurrent invasions by the great European powers. Religion influences Dutch history, society, institutions, and attitudes and is closely related to political life, though to a diminishing degree. The right of every individual to religious freedom is guaranteed by the constitution. Although church and state are separate, a few historical ties remain-the royal family belongs to the Dutch Reformed Church (Protestant). The arts have played a major role in the development and representation of Dutch culture. The works of Old Masters, including Rembrandt and Hals, and later artists, such as Mondriaan and Van Gogh, are on display in museums throughout the Netherlands. The government strongly supports artists, sculptors, and architects and attempts to use their works in public projects whenever possible. The Amsterdam Concertgebouw Orchestra and the Residentie Orchestra in The Hague and the Rotterdam Philharmonic enjoy excellent international reputations. The Netherlands' active intellectual life is stimulated by lively political satire and a counterculture and is sustained by prestigious universities.

HISTORY

Julius Caesar found the Netherlands inhabited by Germanic tribes, one of which, the Batavi, did not submit to Rome until BC 13, and then only as an ally. A part of Charlemagne's empire in the 8th century AD, the area later passed into the hands of the House of Burgundy and the Austrian Hapsburgs. Falling under harsh Spanish rule in the 16th century, the Dutch revolted in 1558, under the leadership of Willem of Orange. By virtue of the Union of Utrecht in 1579, the seven northern Dutch provinces became the Republic of the United Netherlands. During the 17th century, considered its "golden era," the Netherlands became a great sea and colonial power. Its importance declined, however, after wars with Spain, England, and France in the 18th century. In 1795, French troops ousted Willem V of Orange, the Stadhouder under the Dutch Republic and head of the House of Orange. Following Napoleon's defeat in 1813, the Netherlands and Belgium became the "Kingdom of the United Netherlands" under King Willem I, son of Willem V of Orange. The Belgians withdrew from the union in 1830 to form their own kingdom. King Willem II was largely responsible for the liberalizing revision of the constitution in 1848. The Netherlands prospered during the long reign of Willem III (1849-90). At the time of his death, his daughter, Wilhelmina, was 10 years old. Her mother, Queen Emma, reigned as regent until 1898 when Wilhelmina reached the age of 18 and became the monarch. The Netherlands proclaimed neutrality at the start of both world wars. Although the Netherlands escaped occupation in World War I, German troops overran the country in May 1940. Queen Wilhelmina fled to London and established a government-in-exile. Shortly after the Netherlands was liberated in May 1945, the queen returned. Crown Princess Juliana succeeded to the throne in 1948 upon her mother's abdication. In April 1980, Queen Juliana abdicated in favor of her daughter, now Queen Beatrix. The Netherlands' once far-flung empire was granted full independence or nearly complete autonomy after World War II. Indonesia formally gained its independence in 1949, and Suriname became independent in 1975. The five islands of the Netherlands Antilles (Curacao, Bonaire, Saba, St. Eustatius, and a part of St. Maarten) are an integral part of the Netherlands realm but enjoy a large degree of autonomy. On January 1, 1986, Aruba, which had been a part of the Netherlands Antilles, was granted a separate status within the kingdom on par with, but apart from, the Netherlands Antilles. [For more information, see Background Notes on Netherlands Antilles.]

GOVERNMENT

The present constitution dates from 1848 and has been amended several times. The first level administrative divisions are the 12 provinces, each governed by a locally elected provincial council and a provincial executive appointed by members of the provincial council. The province is formally headed by a queen's commissioner appointed by the crown. The government is based on the principles of ministerial responsibility and parliamentary government. It is composed of three institutions: the crown, the States General, and the courts.
The Crown
-- The monarch is the titular head of state. The queen's function is largely ceremonial, but she does have some influence deriving from the traditional veneration of the House of Orange (from which Dutch monarchs for more than three centuries have been chosen), the personal qualities of the queen, and her power to appoint the formateur, who forms the Council of Ministers following elections. -- The Council of Ministers plans and implements government policy. Most ministers also head government ministries, although ministers without portfolio exist. The ministers, collectively and individually, are responsible to the States General (parliament). Unlike the British system, Dutch ministers cannot simultaneously be members of parliament. -- The Council of State, a constitutionally established advisory body to the government, consists of members of the royal family and crown-appointed members generally having political, commercial, diplomatic, or military experience. The Council of State must be consulted by the cabinet on proposed legislation before a law is submitted to parliament. The Council of State also serves as a channel of appeal for citizens against executive branch decisions.
States General (Parliament)
The Dutch parliament consists of two houses, the First Chamber and the Second Chamber. Historically, Dutch governments have been based on the support of a majority in both houses of Parliament. The Second Chamber is by far the more important of the two houses. It alone has the right to initiate legislation and amend bills submitted by the Council of Ministers and shares with the First Chamber the right to question ministers and state secretaries. The Second Chamber consists of 150 members, directly elected for a 4-year term (unless the government falls prematurely) on the basis of a nationwide system of proportional representation. This system means that members represent the whole country, rather than individual districts as in the United States, and are normally elected on a party slate, not on a personal basis. The electoral system makes a coalition government almost inevitable. Elections for the Second Chamber were held in September 1989. New elections are not constitutionally required until 1993. The First Chamber is composed of 75 members elected for 4- year terms by the 12 provincial legislatures. It cannot initiate or amend legislation, but its approval of bills passed by the Second Chamber is required before bills become law. The First Chamber generally meets only once a week, and its members usually have other full-time jobs. The last First Chamber was constructed as a result of provincial assembly elections in June 1987; the Chamber will next be revised following such elections in March 1991.
Courts
The judiciary comprises 62 cantonal courts, 19 district courts, 5 courts of appeal, and a Supreme Court which has 24 justices. All judicial appointments are made by the crown. Judges are nominally appointed for life but, in fact, are retired at age 70.

POLITICAL CONDITIONS

From the end of World War II until December 1958, the Netherlands was governed by a series of coalitions built on a Labor- Catholic base. Since 1958, governments have been formed primarily from a center-right coalition of the Christian Democrats and the Liberals. The social democratic-oriented Labor Party generally has been in opposition, except between 1973-77 and briefly from April 1965 to October 1966, and from September 1981 to May 1982. The Labor Party is part of the present coalition. The current government, formed in November 1989, is a center-left coalition of the Christian Democratic Appeal (CDA) and Liberal (VVD) parties headed by Prime Minister Ruud Lubbers of the CDA. The government has the support of 103 of the 150 members of the Second Chamber who represent 10 political parties. The four largest parties hold 137 of the 150 seats. They are: -- Christian Democratic Appeal (CDA) was formed from a merger of the Catholic People's Party and two Protestant parties, the Anti-Revolutionary Party and the Christian-Historical Union. The merger process, begun in the early 1970s to attempt to stem the tide of losses suffered by religiously based parties, was completed in 1980. The CDA occupies the political center among the major Dutch political parties. It supports free enterprise and NATO membership and holds to the principle that government activity should supplement but not supplant communal action by citizens. On the political spectrum, the CDA sees its philosophy as standing between the "individualism" of the Liberals and the "statism" of the Labor Party. The CDA won 54 seats in 1989 parliamentary elections. This equalled the party's strong showing in the 1986 elections. -- Labor Party (PvdA), a European social democratic party, is left of center. Labor has 49 seats in the current Second Chamber which makes it the second largest party after the CDA. The party joined the CDA to form the present government, after having spent most of the past 11 years in opposition. Labor's program is based on greater social, political, and economic equality for all citizens, although in recent years the party has begun to debate the role of central government in that process. The PvdA supports Dutch NATO membership but has been critical of some alliance policies, particularly regarding nuclear weapons. Although called he "Labor Party," it has no formal links to the trade unions. -- The Liberal Party (VVD) is "liberal" in the European, rather than American, sense of the word. It thus attaches great importance to private enterprise and the freedom of the individual in political, social, and economic affairs. The VVD is generally seen as the most conservative of the major parties and solidly supports most NATO policies. The VVD was the junior partner in two governing coalitions with the CDA from 1982-89, but is now in opposition with 22 seats in the Second Chamber. -- Democrats '66 (D'66), largest of the "small" parties in the Dutch parliament. The electoral fortunes of D'66 have fluctuated widely since the party's founding in 1966. The 12 seats it currently holds are slightly above the historical average of the party's showing over the last 20 years. D'66 is a center-left party, generally portrayed as between the CDA and PvdA, with its strongest support among young, urban, professional voters. D'66 is currently an opposition party.

ECONOMY

The Dutch economy is based on private enterprise. Although the government has little direct ownership or participation, it heavily influences the economy, with more than 45% of the gross national product (GNP) involved in its operations and social programs (including transfer payments). The government plays a significant economic role through the many permit requirements and regulations pertaining to almost every aspect of economic activity. Services, which account for more than half of the national income, are primarily in transport and financial areas, such as banking and insurance. Industrial activity provides about 22% of the national income and is dominated by the metalworking, oil refining, chemical, and food-processing industries. Construction amounts to about 9% of the national income. Agriculture and fishing, although visible and traditional Dutch activities, account for slightly more than 4%. Foreign trade heavily influences the open Dutch economy, with exports accounting for 66% of GNP. The Netherlands find a liberal commercial policy advantageous and participates in the European Community (EC), the Benelux Economic Union, and the European Monetary System. It is a firm supporter of the General Agreement on Tariffs and Trade (GATT) and supports multilateral trade negotiations to establish freer and expanded world trade. The recent political developments in Eastern Europe are not expected to have significant effects on the Dutch economy during the next few years because the Dutch level of trade and investment in those countries is very low. In 1959, the vast Slochteren gasfield in Groningen Province began production and is now one of the world's largest producing natural gasfields. In addition, the Netherlands also discovered gas on the North Sea's continental shelf. At present, total proven natural gas reserves (mainland and North Sea) amount to 1.2 trillion cubic meters. The reserves of other Dutch gasfields, including the Dutch North Sea sector, total about 24% of those of Slochteren. Current gas production is running annually at about 72 billion cubic meters, roughly half of which is exported to EC member countries. General government revenues from natural gas totaled about $8.7 billion in 1986 and accounted for more than 14% of total government revenue, dropping to $2.9 billion in 1989 (4% of revenue). Dutch economic growth has improved after several years of lackluster performance. The annual growth rate in 1989 was 4.2%, while inflation remained low at 1.1%. Corporate investment has been high. Weakening domestic demand and slower increases in export demand are expected to slow down the rate of expansion in 1990. The Netherlands' balance-of-payments current account displays a strong surplus. The CDA/VVD coalition under Prime Minister Ruud Lubbers has agreed on the broad outlines of its economic policy for the 1990-94 period, leaving the basic goals of the previous government intact, but changing its emphasis. The new policies will boost public spending on the environment by $3 billion and education, housing, social security, and health by $1 billion over the next four years. Defense spending will grow by just 0.6% in 1990 and 1991, and will be frozen in 1992 and 1993. In total, the new policy measures will increase public spending by 4.6 billion guilders (about $2.3 billion) per year by 1994.
Environmental Policy
Awareness of the environment plays a major role in Dutch life. In 1988, the Netherlands spent 1.34% of its GNP on environmental protection-almost twice as much per capita as in the United States. The Dutch Ministry of Environmental Affairs has released an ambitious and expensive-$3 billion-environmental plan for 1990- 94. Under this plan, Dutch industry will be required to double its spending on environmental protection. By 1994, industry will have to spend an extra $1 billion each year to meet stricter pollution control guidelines. In November 1989, Prime Minister Lubbers presented his government's proposals to the States General. The Dutch goal is to make production and consumption compatible with the conditions of sustainable development within one generation. In June 1990, a supplement to the environmental plan, "Nmp-Plus", was submitted, including plans for a leveling off and eventual reduction in CO2 emissions by 2000. To finance this program, a CO2 levy has been introduced, which is expected to generate $75 million in 1990. This will be spent on anti-acidification measures ($20 million), energy conservation ($30 million), and promotion of public transport ($25 million).

FOREIGN RELATIONS

The Netherlands abandoned its policy of neutrality after World War II, and joined the NATO alliance as the best means to ensure security and promote national interests. The postwar Netherlands governments have followed an active, engaged foreign policy in many areas of the world. In addition to pursuit of national interests, Dutch foreign policy in recent years has been rooted in several important principles, which include the promotion of peace and security in Europe, support for Third World development, and respect for international law and human rights. The Netherlands seeks to advance many of its objectives through multilateral cooperation. It was a founding member of the European Community, has long based its security policy upon membership in NATO, and is one of five nations to sign the Schengen Accord abolishing border controls between itself and Belgium, Luxembourg, France, and Germany). Economic and trade policy is closely coordinated through the European Community and, to a lesser extent, other international bodies, such as the Organization for Economic Cooperation and Development, GATT, and the International Monetary Fund. Other foreign policy interests generally take into account consultations within European Political Cooperation, the political consultation process of the EC. The Netherlands also is a member of the Benelux group (Belgium, Netherlands, Luxembourg). Finally, the Netherlands is an active and responsible participant in the United Nations and its affiliated organizations. The Netherlands is a strong proponent of North-South cooperation and maintains an impressive development assistance program. Aid commitments are fixed by law at 1.5% of net national income, although actual disbursements have not always reached that level. For 1990, the development assistance program will give special attention to four transnational problems: poverty, population, environment, and debt. The Netherlands has had a long term development relationship with 10 "program" countries (Bangladesh, Egypt, India, Indonesia, Kenya, Yemen, Pakistan, Sudan, Sri Lanka, Tanzania) and three geographic regions (the Sahel, Southern Africa, and Central America). They also contribute large amounts of aid through multilateral channels, especially the UN Development Program, International Development Association, and EC programs. A large portion of Dutch aid funds are channelled through private ("cofinancing") organizations that have almost total autonomy in choice of projects. The Dutch are members of the European Bank for Reconstruction and Development (EBRD) which was formed recently to finance economic reforms in Eastern Europe.

US-DUTCH RELATIONS

Our partnership with the Netherlands is our oldest continuous relationship and dates back to the American revolution. Our excellent bilateral relations are based on close historical and cultural ties and a common dedication to individual freedom and uman rights. An outward-looking nation, the Netherlands shares with the United States a commitment to an open market and free trade. In May 1989, Prime Minister Lubbers was in Washington on a private visit and met with President Bush, and 2 months later, President Bush became the first American President to visit the Netherlands while in office. The President went to the Netherlands as a guest of Queen Beatrix and spoke in the church in Leiden used by the Pilgrims before many of them sailed to America. The United States and the Netherlands often have similar positions on issues affecting NATO, regional problems, trade, and economic cooperation which enables them to work together both bilaterally and in the United Nations and other international and regional organizations.

DEFENSE

The defense structure of the Netherlands comprises the Ministry of Defense and the various branches of the armed forces. Political responsibility for the defense of the Netherlands lies with the minister of defense and the state secretary for defense. The Dutch, as members of NATO, are engaged in arms control negotiations with members of the Warsaw Pact which will affect the size and equipment of the participants' conventional military forces. The Royal Netherlands Army Forces (RNAF) has a total peacetime personnel strength of about 123,000 military and civilians. The Royal Netherlands Navy is composed of escort ships, submarines, maritime patrol aircraft, helicopters, a mine countermeasure force, and a Marine Corps, as well as the necessary supporting elements. Priority has been given to anti-submarine warfare, with emphasis on air defense and surface warfare. The weapons systems of the Royal Netherlands Air Force are primarily fighter aircraft and surface-to-air guided weapons.
Principal Government Officials
Head of State-Queen Beatrix Council of Ministers Prime Minister-Ruud Lubbers Vice Prime Minister and Finance-Wim Kok Foreign Affairs-Hans van den Broek Ambassador to the United States-Johan H. Meesman Ambassador to the UN- Robert Jan van Schaik
Principal US Officials
Ambassador-C. Howard Wilkins, Jr. Deputy Chief of Mission-Thomas H. Gewecke Political Counselor-Lawrence G. Rossin Economic Counselor-George Boutin Administrative Counselor-Timothy E. Roddy Commercial Counselor-Michael Hegedus Public Affairs Counselor-C. William La Salle Defense and Naval Attache-Capt. Bruce Barker Army Attache-Col. William Mitchell Air Attache-Col. Allen Ryals Agriculture Counselor-Norval Francis Chief, Office of Defense Cooperation-Col. Charles W. Brewer, USAF Country Attache: Narcotics-Joseph Beachell Customs Attache- Robert L. Gerber Consul General, Amsterdam-Jake M. Dyels The US Embassy is located at Lange Voorhout 102, 2514 EJ The Hague (telephone no. (070) 3-62-49-11). The consulate general is at Museumplein 13, 1071 DJ Amsterdam (tel. 020 790-321).

TRAVEL NOTES

Clothing: Clothing needs are similar to those of Seattle, Washington. Currency unit is the Dutch guilder (Fl.); foreign exchange control regulations place no limit on the amount of foreign currency or negotiable instruments that may be imported. Health: Medical facilities are good. Community sanitation is comparable to standards in US cities. Telecommunications: Facilities are good for local and long- distance use. Amsterdam and The Hague are six time zones ahead of eastern standard time. Transportation: Good public transportation by bus and streetcar is available in the cities and serves principal sectors of the city as well as the suburbs. Most Dutch cities are connected by rail, and almost all regions of the Netherlands are accessible by good public transportation. Excellent transportation to other principal European cities also is available. The main international airport is at Schiphol, near Amsterdam, but a few international flights also arrive at Rotterdam and Maastricht Airports. Published by the United States Department of State -- Bureau of Public Affairs -- Office of Public Communication -- Washington, DC -- Jan. 1991 -- Editor: Susan Holly Department of State Publication 7967 -- Background Notes Series -- This material is in the public domain and may be reprinted without permission; citation of this source is appreciated. For sale by the Superintendent of Documents, US overnment Printing Office, Washington, DC 20402. (###)