Netherlands - Economic development



For nearly four decades after World War II Dutch governments aimed at increased industrialization. During the 1990s, however, industrial growth slowed, while the service sector continued to expand. In this regard, the Netherlands is making the transition to a more liberalized high technology economy quite successfully.

In an effort to encourage industrialization after the Second World War, the maintenance of internal monetary equilibrium was vitally important, and the government has largely succeeded in this task. Successive governments pursued a policy of easy credits and a "soft" currency, but after the Netherlands had fully recovered from the war by the mid-1950s, a harder currency and credit policy came into effect. In the social sphere, stable relationships were maintained by a deliberate governmental social policy seeking to bridge major differences between management and labor. The organized collaboration of workers and employers in the Labor Foundation has contributed in no small measure to the success of this policy, and as a result, strikes (other than an occasional wildcat strike) are rare.

Successive wage increases helped bring the overall wage level in the Netherlands up to that of other EC countries by 1968. The Dutch government's policy, meanwhile, was directed toward controlling inflation while seeking to maintain high employment. In 1966, the government raised indirect taxes to help finance rising expenditures, particularly in the fields of education, public transportation, and public health. Further attempts to cope with inflation and other economic problems involved increased government control over the economy. Wage and price controls were imposed in 1970–71, and the States-General approved a measure granting the government power to control wages, rents, dividends, health and insurance costs, and job layoffs during 1974.

During the mid-1980s, the nation experienced modest recovery from recession; the government's goal was to expand recovery and reduce high unemployment, while cutting down the size of the annual budget deficit. The government has generally sought to foster a climate favorable to private industrial investment through such measures as preparing industrial sites, subsidizing or permitting allowances for industrial construction and equipment, assisting in the creation of new markets, granting subsidies for establishing industries in distressed areas, and establishing schools for adult training. In 1978, the government began, by means of a selective investment levy, to discourage investment in the western region (Randstad), while encouraging industrial development in the southern province of Limburg and the northern provinces of Drenthe, Friesland, and Groningen.

The Netherlands' largest economic development projects have involved the reclamation of land from the sea by construction of dikes and dams and by the drainage of lakes to create polders for additional agricultural land. The Zuider Zee project closed off the sea and created the freshwater IJsselmeer by means of a 30 km (19 mi) barrier dam in 1932, and subsequently drained four polders enclosing about 165,000 ha (408,000 acres). After a storm washed away dikes on islands in Zeeland and South Holland in 1953, killing some 1,800 people, the Delta project was begun. This project, designed to close estuaries between the islands with massive dams, was officially inaugurated in 1986; the cost was $2.4 billion. The Delta works include a storm-surge barrier with 62 steel gates, each weighing 500 tons, that are usually left open to allow normal tidal flow in order to protect the natural environment. Another major engineering project was construction of a bridge and tunnel across the Western Schelde estuary in the south to connect Zeeland Flanders more directly with the rest of the country.

Beginning in the 1980s, Dutch governments began stressing fiscal discipline by reversing the growth of the welfare state and ending a policy of inflation-based wage indexing. The latter policy represented a spirit of consensus among labor and management. At a time when other labor unions fought losing battles with management, Dutch unions agreed to a compromise on this cherished issue in return for a business promise to emphasize job creation. By the late 1990s, these reforms had paid off as Dutch unemployment plummeted to below 5%. As of the early 2000s, the Netherlands had among the lowest unemployment rates in the industrialized world. The Netherlands' economy was adversely affected by the global economic downturn that began in 2001, however, as gross domestic product (GDP) growth fell to 0.2% in 2002, and was forecast to fall to -0.2% in 2003. The Netherlands has favorable tax structures for investors, which has made the country one of the top recipients of foreign direct investment in the European Union.

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Jul 24, 2011 @ 11:23 pm
what tybe stragety did netherlands use for agriculture controlation did they pocus on agriculture or industrialization

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