The Netherlands is a small state on the north coast of mainland Western Europe, bordering Germany to the east and Belgium to the west. After occupation by Nazi Germany in 1940–45 the state abandoned its traditionally neutral political stance in favour of international co-operation with Western alliances. A founder member of the European Coal and Steel Community, the Netherlands is one of the strongest advocates of European integration, but has also adopted an Atlanticist stance as a member of the North Atlantic Treaty Organization.
Dutch society and politics are characterized as ‘pillarized’—verzuiling in Dutch. The population is divided into four distinct pillars or subcultures—Roman Catholic, orthodox Calvinist, Socialist and neutral/liberal—and each has its own closed organizational network. Yet, despite these strong cultural divisions, Dutch democracy is based on a stable culture of consensus and mutual tolerance in social and political issues. National government and the state bureaucracy bring together élites from each pillar to barter consensual agreements acceptable to all four blocs. Under this consensual model government opposition tends to be pacified and accommodated, rather than excluded. Social and political consensus has extended into many issues, including immigration. Traditionally an open country, the Netherlands accepted 10% of those seeking asylum in the European Union (EU) in 2000 although the Dutch population at that time represented only 4% of the total population of the EU. However, in recent years the Dutch consensus on issues such as immigration has appeared to be breaking down.
A constitutional monarchy, the head of state is Queen Beatrix who acceded to the throne in 1980. Legislative power is divided between two houses of parliament: the Eerste Kamer and the Tweede Kamer. Elections to the Tweede Kamer are governed by a system of pure proportional representation. It can take many months to form a coalition government following elections. The most recent elections were held on 22 January 2003 and they resulted in the formation of a coalition between the Christian Democratic Appeal (CDA), the free-market People’s Party for Freedom and Democracy (VVD) and the social liberal Democrats 66 (D66). The coalition is headed by CDA Prime Minister Jan Peter Balkenende.
Christian democratic parties dominated Dutch politics in the 20th century. The CDA or its three founding parties participated in all coalition governments in 1917–94. In the 1994 elections the CDA suffered heavy losses and was for the first time in its history excluded from government. The Labour Party (PvdA), which also lost votes in the 1994 election, was able to form the so-called ‘purple coalition’ with the liberal parties VVD and D66 under the leadership of Wim Kok. The secular coalition was re-elected in 1998 and governed until the elections held on 15 May 2002. Wim Kok’s ‘purple coalition’ resigned shortly before the May 2002 elections when it was revealed that Dutch troops had failed to prevent the massacre of more than 7,000 Muslim men and boys in the United Nations ‘safe area’ in Srebreniča, Bosnia, in 1995.
The stable consensus of Dutch politics was disrupted in 2002 by the anti-immigration, populist politician Pim Fortuyn. In local elections in Rotterdam held on 6 March 2002 the party list that Fortuyn headed won 35% of the vote, thereby relegating the PvdA, which had governed there for some 40 years, into second place. The general election of 15 May 2002 took place nine days after Pim Fortuyn had been assassinated by an animal rights activist. Without its founder the List Pim Fortuyn (LPF) none the less won 17% of the vote and 26 seats in the 150-seat Tweede Kamer, obtaining the status of second largest party. The LPF subsequently entered into a coalition with the CDA, which re-emerged as the strongest party with 27.9% of the vote, and the VVD. However, the coalition formed in July 2002 collapsed in October when two LPF ministers resigned.
The success of the political movement founded by Pim Fortuyn is indicative of the Dutch population’s dissatisfaction with certain aspects of consensus democracy. By addressing the immigration issue, Fortuyn sought to break a taboo of established politics which traditionally attempted to accommodate difference rather than highlight it as a social problem. Although the LPF will not have enduring appeal, its contribution to Dutch politics could be that it marked the definitive end of the peaceful coexistence of the Dutch pillars managed by the political élite—a process referred to since the 1960s as depillarization or, in Dutch, ontzuiling.
Economy: The Dutch economy is open and outward-looking. A nation of merchants, the Netherlands is the location of the world’s largest port (Rotterdam) and a large number of Dutch-based multinational companies, such as Philips. Dutch economic strength traditionally lies in services rather than manufacturing and the service economy accounts for around two-thirds of gross domestic product (GDP); particular strengths are in banking and finance. The Dutch economy is supported by a large number of small businesses involved in food processing, petrochemicals, engineering and software. It is also one of the world’s largest exporters of flowers. The Netherlands was a founder member of what is now the European Union (EU) and of the euro. Prior to Economic and Monetary Union, the Dutch guilder had been linked to the German Deutsche Mark.
GNP: US $390,300m. (2001); GNP per caput: $35,630 (2001); GNP at PPP: $132,000m. (2001); GNP per caput at PPP: $29,340 (2001); GDP: $380,137m. (2001); exports: $255,875m. (2001); imports: $237,984m. (2001); currency: euro; unemployment: 2.7% (2002).
Economic and social policy-making in the Netherlands is traditionally based on the principle of consensus and in the post-1945 era the Dutch economy has been strongly regulated by social partners. A system of corporatist economic policy-making was founded in 1950 with the establishment of the Social and Economic Council (Sociaal-Economische Raad—SER). The SER consists of 45 members: 15 trade union representatives, 15 members of employers’ organizations and 15 independent experts appointed by the cabinet. Two ex officio members of the council are the governor of Dutch Central Bank and the director of the independent Central Planning Bureau. According to the Industrial Organization Act of 1950, the SER must be consulted by the government on all significant economic and social policy questions. The government is not obliged to follow its recommendations, but if there is consensus among the members of the SER, its recommendations tend to be accepted. In addition, trade union and employers’ organizations consult via the Foundation for Labour (Stichting van de Arbeid) founded in 1945.
The Netherlands corporatist economy developed a wide-ranging system of protection in the labour market and through the provisions of the welfare state. Workers were offered strong protection against redundancy and the social security system offered generous benefits for the unemployed, retired and sick. Typically for corporatist economic systems, unemployment was avoided by prioritizing core male workers and encouraging the young, old and women to exit the labour market. The employment rate as a proportion of the total working-age population was only 52% in 1982, compared with nearly 74% today.
Following the recessions of the 1970s the economy could no longer sustain its generous welfare state and the budget deficit rose to more than 7% of GDP by 1982. The so-called ‘Dutch disease’—welfare without work—was addressed with a consensus formula agreed by social partners. In 1982, under the Wassenaar agreement, trade unions agreed to pay restraint and more decentralized wage-bargaining in exchange for an emphasis on job creation. The government undertook to reduce taxes to increase purchasing power. This new consensual approach, which came to be referred to as the Polder Model, led to an economic revival for two consecutive decades. Most significantly, the Polder Model led to above-average economic growth compared with other EU countries—an annual average of 3%. This was matched by low inflation and a reduction of the budget deficit. Unemployment fell from 11% in 1983 to less than 2% in 2002. There was a rapid influx of women into the labour market and much new employment was part time and in the service sector. Part-time work now accounts for one-third of total employment. At the same time, public spending was cut and the power of the social partners to manage social security was reduced. The SER plays an ever decreasing role in the Polder Model.
After nearly two decades of healthy performance, the Polder Model appears to be faltering: economic growth has slowed and inflation and unemployment are rising. While some attribute this to the general deceleration of the global economy, into which the Netherlands is well integrated, others interpret it as evidence that the Polder Model has reached its limits and needs to be further liberalized. Regular criticism is directed towards the still generous level of welfare provision and high levels of welfare dependency. According to some figures, nine people receive benefit for every 10 who are working and although life expectancy in the Netherlands is high—76 years and 81 years, respectively, for men and women—almost 1m. people in a total working-age population of 7m. qualify for the generous disability scheme—the WAO—which has been used as a way of removing surplus labour.
This is the complete article, containing 1,498 words
(approx. 5 pages at 300 words per page).
