Kingdom of the Netherlands
Koninkrijk der Nederlanden
LOCATION AND SIZE.
Once known as Holland, the Netherlands is located in Western Europe. It borders Belgium to the south, Germany to the east and north, and the North Sea along its western coast. The country has a total area of 41,526 square kilometers (16,485 square miles). This includes 33,889 square kilometers of land (13,084 square miles) and 7,643 square kilometers (2,950 square miles) of water. The coastline of the Netherlands is 451 kilometers (280 miles) long. Its land borders are 1,027 kilometers (638 miles) in length. The border with Germany is 577 kilometers (358 miles) long and that with Belgium is 450 kilometers (280 miles) long. The country is about the size of Maryland. The Netherlands is located at the crossroads of 3 of Europe's major rivers: the Rhine, the Meuse and the Schelde. The nation's 2 largest cities are Amsterdam, with a population of 1.1 million, and Rotterdam, also with 1.1 million people. Other major cities include The Hague (700,000 people) and Utrecht (554,000 people). Both the capital and the seat of government are located in the west-central region of the country, near the coast. The Netherlands still has 2 colonies, Aruba and the Netherlands Antilles (both are located in the Caribbean).
The population of the Netherlands was estimated to be 15,892,237 in July of 2000. In 2000, the nation's population growth rate was 0.57 percent. The birth rate was 12.12 births per 1,000 people. The fertility rate was 1.64 children born per woman, which is below the replacement level (this term refers to the number of children a couple must have to replace both parents, which is roughly 2 children). However, a large number of immigrants move to the Netherlands each year. Annually, there is an average of 2.3 new immigrants in the country for every 1,000 citizens. The mortality rate is 8.72 deaths per 1,000 people. The infant mortality rate is 4.42 deaths per 1,000 live births. Like many of the advanced industrialized nations, the population of the Netherlands is aging. The fastest growing segment of the population is the elderly. Those over the age of 65 make up 14 percent of the population, and this group is expected to double in size over the next 20 years. The average life expectancy for males in the Netherlands is 75.4 years and 81.28 years for females.
The majority of the people of the Netherlands are of Dutch ancestry (91 percent). The Dutch are primarily of Germanic and Gallo-Celtic origins. The remaining 9 percent of the population is split between people of Moroccan, Turkish, and Surinamese backgrounds. The society of the Netherlands is open, but in recent years there has been increasing anti-immigrant sentiment among some groups. During the 1990s, a number of new laws were passed which restricted immigration . The year 1998 was a peak time for political asylum seekers; some 45,217 political refugees settled in the Netherlands. Unemployment is higher among minority groups and some discrimination
Dutch is the official language of the nation, but English is also widely spoken. The population is highly educated and skilled. There is mandatory education through age 16 and the literacy rate is near 100 percent. The Netherlands has a relatively low rate of religious affiliation. Roman Catholics make up 34 percent of the people, Protestants 25 percent, and Muslims 3 percent. About 36 percent of the Dutch are unaffiliated with any formal religion.
The majority of people live in urban areas and the country is one of the most densely populated in the world. Its average population density is 369 per square kilometer (958 people per square mile). In comparison, the population density of Japan is 320 per square kilometer (830 per square mile), while that of the United States is 27 per square kilometer (70 per square mile). The most densely populated area of the country is known as the Randstad and includes the coastal regions of Amsterdam, Rotterdam, and Utrecht.
MANUFACTURING AND CONSTRUCTION.
The Dutch manufacturing sector is dominated by the production of chemicals and pharmaceuticals, metals and electronics, food processing, and tobacco. Over the past decade, the chemical industry has declined slightly (by 2 percent), while metals and electronics and food processing has expanded by 8-10 percent. In 1999, total manufacturing in the kingdom grew by 9 percent. In 1998, there were 847,591 people employed in manufacturing. The largest number, 144,645, were employed in food and tobacco processing. The number-two industry in terms of employment was metal processing with 99,753 workers, and the number-three field was machinery manufacturing with 89,688 employees.
Electronics manufacturing in the Netherlands is dominated by the multinational corporation Philips. The company makes lighting, consumer electronics, appliances, semiconductors, and communications systems. Philips is the ninth-largest manufacturer of semiconductors in the world. Of the 100,000 people employed in the Netherlands in the electronics field, Philips employs 44,000. Worldwide, Philips employs 265,000 people. Other major Dutch electronics firms include ASML, CMG, and Origin. The largest computer chip factory in Europe is in the Netherlands.
The most dramatic declines in employment and output were in the textile manufacturing sector and in shipbuilding and repair. Many of the manufacturing industries are based on the processing of raw materials or semi-finished materials into finished products. In other words, companies in the Netherlands import materials such as metal or chemicals and turn these items into products that consumers can use such as car parts or cleaning chemicals.
The Dutch chemical industry produces a variety of goods including synthetic rubber, plastic consumer goods , and polyester yarns for industrial purposes. Major Dutch chemical companies include Shell, Akzo Nobel, and DSM. Shell and Akzo Nobel are the eleventh-and twelfth-largest chemical companies in the world. DSM produces 70 percent of the polymers and rubber that the European automobile industry uses to produce new cars. Meanwhile, Dutch pharmaceutical companies have an annual output of about US$4 billion.
Ship building and repair continue to be significant factors in the Dutch economy. However, competition from countries where workers are paid less has caused drastic cutbacks in the field which is only about one-half the size it was previously. Still, the Netherlands is the world's seventh-largest producer of ships and the fourth-largest in Europe. Ship building and repair employ about 10,000 workers and are concentrated in the large ports on the western coast. The industry had revenues of US$1.66 billion in 2000, most of which were from ship building. In 2000, Dutch ship builders received orders for 88 new vessels and 45 percent of these orders were from foreign firms.
Over the past 30 years, construction has had a major impact on the Dutch economy. Because the nation is so small in geographic size and has a high population density, real estate is very valuable in the kingdom. On several occasions this has led to a bubble (a rapid increase in value that is unsustainable over many years) in the housing market. The collapse (or bursting) of the housing bubble in the 1970s led to a widespread economic recession . During this recession, real estate prices declined by 45 percent by 1982. Nonetheless, the construction field is aided by government spending on infrastructure projects. In 1999, there were 31,459 construction companies and 416,000 people employed in the field. During the 1990s, the sector averaged 2 percent growth per year.
MINING AND MINERAL EXTRACTION.
Although there was once a vibrant coal mining industry in the Netherlands, the discovery of oil and natural gas led to the demise of the coal companies during the 1970s. By the 1990s, the only mining operations left in the kingdom were small companies that extracted salt, peat, and some sand and gravel for construction uses. In 1998, there were only about 9,000 people employed in mining. All metal ore used in manufacturing or other industries has to be imported.
The Dutch do produce a limited amount of oil. However, oil production peaked in 1986 at 66,500 barrels of oil per day. Since that time, production has declined to an average of about 60,000 barrels per day. Many of the kingdom's former oilfields in the North Sea are now in the process of being decommissioned. Energy production employed about 6,670 people in 1998, but produced considerable profits for the nation.
On the other hand, the kingdom is Western Europe's number-one supplier of natural gas. In 1958, the Geneva Convention on the Law of the Sea gave the kingdom the rights to a 56,980 square kilometer (22,000 square mile) area in the North Sea. This region contains the kingdom's main reserves of natural gas and is actually larger than the country itself. The main company in the sector is the Netherlands Natural Gas Company which is owned by Dutch and American energy firms and by the Dutch government. About half the natural gas produced is used within the country, with the rest exported to EU nations. The main export destinations are Germany, Belgium, France, Switzerland, and Italy. In 1999, the total natural gas production of the kingdom was 80 billion cubic meters. The proven reserves of natural gas exceed 2 trillion cubic meters. Government revenues from natural gas were US$1.2 billion in 2000.
The services sector of the economy has experienced the greatest level of growth among the major Dutch businesses over the past 2 decades. Services now account for 69.7 percent of GDP according to a 1998 estimate. The most prominent fields within the service sector are banking and financial services, telecommunications, retail , and tourism.
BANKING AND FINANCIAL SERVICES.
The banking and financial sectors of the Dutch economy have increasingly come to be dominated by large firms. In order to compete with international banks, companies have had to merge so as to reduce costs and maximize efficiency. The 2 largest banks in the country—the General Netherlands Bank and the Amsterdam-Rotterdam Bank—merged in 1990 to become ABN Amro. ABN Amro is now one of Europe's largest banks. Recently, Postbank and the Netherlands Traders' Bank merged to create the king-dom's second-largest bank. In 1998, the Dutch insurance company Fortis merged with the large Belgian firm De Generale Bank. Financial services account for about 7.2 percent of the service sector. Other business services account for 10.5 percent of the sector.
In 1999 the banking sector of the Dutch economy was worth 1.33 trillion euros. The nation's banking sector employed 120,000 people in the Netherlands and 220,000 people worldwide. There are 115 banks in the nation. This number includes all major credit-granting institutions and foreign-owned banks. In 1999 there were 6,121 bank branches in the Netherlands, and Dutch banks had an additional 2,575 branches abroad. However, 3 large banks—ABN Amro, Rabobank and ING Bank— account for about 75 percent of lending in the kingdom.
In 1999, the telecommunications market in the Netherlands amounted to US$10.3 billion. Over the next 5 years, the sector is expected to grow by 5-10 percent per year. About 85 percent of the market is based on telecommunications services, and the remaining 15 percent is equipment. In 1989, the government passed legislation which privatized telecommunications services. Nonetheless, the former state-owned telecommunications company KPN Telecom continues to dominate the sector. For instance, in the field of mobile phones, KPN Telecom controls 52 percent of the market. The next largest company, Libertel, controls 32 percent, and the third-largest firm, Telfort, controls 7 percent. The government is in the process of auctioning licenses for the next generation of mobile equipment. Despite the dominance of KPN Telecom, international corporations have gained an increasing share of the telephone market. Among the major international companies that are now in the Dutch market are MCI WorldCom, Global One, and Esprit Telecom.
A growing segment of the telecommunications sector is information technology or IT (computer-based information systems and communications). In 1999, the IT market in the Netherlands was worth US$11 billion. This represented a growth rate of 15 percent from the previous year. Over the next few years, forecasts predict that the field will continue to expand at a rate of 15 to 20 percent per year. The 2 largest Dutch IT firms are Baan and Exact. The government has attempted to promote the establishment of new IT companies under a program known as "Twinning." This program provides government funds for housing, business start-up, and financial advice. Despite this and similar programs, more than 60 percent of IT products and services are imported. The United States is the main supplier of IT goods and services to the kingdom. With more than 3 million Internet users, the Dutch have the highest rate of Internet usage per person in Europe. By 2002, there will be 7.5 million Dutch Internet users. E-commerce (the use of the Internet to purchase goods) was worth US$325 million in 1998, but this figure grew to US$1.1 billion in 1999, and is expected to be worth US$11.5 billion by 2002. Experts rank the Netherlands as being 12-18 months behind the United States in Internet usage and e-commerce.
The Dutch retail sector is highly developed and diversified. In many ways it is similar to that of the United States. Supermarkets comprise 68 percent of grocery stores, while specialty stores make up 22 percent and the remainder includes food stores, local farmers' markets, department stores, and convenience stores. The Netherlands has about 12,600 clothing stores with combined sales in 1999 of US$5.3 billion. Over 60 percent of these are small retail units, and the rest are department stores or chain outlets. Employment in retail and clothing stores is 61,010. Nonetheless, as in the United States, there has been a steady trend toward larger retail units and a decline in small specialty stores.
In 1999, the Dutch spent US$10 billion on tourism, but US$8 billion of this was spent outside of the country. The Dutch tend to travel extensively, and 4 out of 5 have traveled on vacation at some point in their lives. In 1999, there were 30.5 million overnight vacation trips, of which 16.3 million were within the Netherlands. Tourism accounts for 5 percent of all employment in the Netherlands and includes 45,000 companies. Over 95 percent of these companies have fewer than 10 employees. In 2000, tourism was one of the 4 fastest-growing sectors of the Dutch economy, and by 2010 there will be an additional 5,000 hotel rooms built. Within tourism, short trips (those of 2 to 4 days) are becoming the most popular form of vacation. The United States is the most popular destination for Dutch tourists and accounts for about 25 percent of the total overseas tourism market. The most popular destinations for Dutch tourists are New York, Los Angeles, San Francisco, and Miami. Of those who visit tourist destinations in the Netherlands, 52 percent are Dutch and 48 percent are foreign. Germans are the main tourist group to visit the kingdom, followed by the British.
The Netherlands has no territories or colonies.
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Van Zanden, Jan Luiten, editor. The Economic Development of the Netherlands Since 1870. Brookfield, Massachusetts: Edward Elgar Publishing, 1996.
Amsterdam is the constitutional capital; the official seat of the government is The Hague.
Netherlands guilder (Dfl or Fl), also known as gulden or florin. One guilder equals 100 cents. Coins are in denominations of Dfl1, 2.5, and 5, and 5, 10, and 25 cents. Paper currency is in denominations of Dfl10, 25, 50, 100, 250, and 1,000. The euro, the currency of the European Union, replaced the guilder on 1 January 2002.
Machinery and equipment, chemicals, fuels, foodstuffs.
Machinery and transport equipment, chemicals, fuels, foodstuffs, clothing.
GROSS DOMESTIC PRODUCT:
US$365.1 billion (purchasing power parity, 1999 est.).
BALANCE OF TRADE:
Exports: US$169 billion (f.o.b., 1998 est.). Imports: US$152 billion (f.o.b., 1998 est.).