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The study is by Roel van Heusden, a Dutch native who currently [June 2013] lives in San Francisco; this study presents the Netherland government's economic policies as compared to the MIEPA list of policies as outlined above. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2013. Used herein with permission]
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NETHERLANDS - ROEL VAN HEUSDEN
NETHERLANDS: ECONOMIC POLICY ANALYSIS BASED ON MIEPA POLICY LIST
RATING SUMMARY POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 4.0 15.0 15.0 100 % 2 5.0 15.0 15.0 100 3 4.5 13.5 15.0 90 4 5.0 15.0 15.0 100 5 4.0 12.0 15.0 80 6 5.0 15.0 15.0 100 7 4.8 14.4 15.0 96 8 4.8 14.4 15.0 96 9 4.5 13.5 15.0 90 10 4.5 13.5 15.0 90 11 4.8 14.4 15.0 96 12 5.0 10.0 10.0 100 13 3.5 7.0 10.0 70 14 5.0 10.0 10.0 100 15 4.5 9.0 10.0 90 16 4.5 9.0 10.0 90 17 4.8 9.6 10.0 96 18 4.7 9.4 10.0 94 19 5.0 10.0 10.0 100 20 4.0 8.0 10.0 80 21 3.5 7.0 10.0 70 22 3.5 7.0 10.0 70 23 5.0 10.0 10.0 100 24 5.0 10.0 10.0 100 25 5.0 10.0 10.0 100 26 5.0 10.0 10.0 100 27 5.0 10.0 10.0 100 28 1.0 2.0 10.0 20 29 4.5 4.5 5.0 90 30 4.5 4.5 5.0 90 31 5.0 5.0 5.0 100 32 4.0 4.0 5.0 80 33 5.0 5.0 5.0 100 34 4.0 4.0 5.0 80 TOTAL 151.9 330.7 365.0 90.6% ===== ====== ===== =====
NETHERLANDS: INDIVIDUAL POLICIES
1. Freedom from internal control 5.0
People in the Netherlands have the freedom to move or conduct business wherever they want. As long as a business follows all the proper local and national regulations, and is not hurting others, they can operate or move around the country as they please. The Freedom of citizens to live and travel as they please is protect by the constitution and deeply engrained in Dutch society. The thought of not being able to travel or live where ever someone would want to, within their own country, is completely foreign to the Dutch.
2. Freedom of speech 5.0
Freedom of speech in the Netherlands is not only protected by the constitution but the extents of the wording have withstood the test of time so far. Anything less than full freedom of expression is not something Dutch people are used to. The law does state an exception where the concern would be public decency related to person under the age of 16 being present. The right to Freedom of speech is engrained in Dutch culture and in its citizens.
3. Effective, Fair Police 4.5
People in the Netherlands feel good about their police force. The Dutch do not fear for their police but feel safe when they are around. To most Dutch people a policeman is just someone doing a job and not someone who is out to scare or intimidate them. The general feeling is that the police are good at what they do and that crimes are solved regularly. The police force in the Netherlands has recently reformed its structure and the results are yet unknown; however a general consensus is that people like seeing more police on the street which is innately a sign that they are appreciated.
4. Private property 5.0
The Netherlands has very strong real, personal, and intellectual property rights. The personal property rights in the Netherlands are complicated in writing but work as they would be expected to: “So the owner of a thing in fact has not a thing, he only has an intangible right to that thing, namely a right of ownership, consisting of no more than various rules of conduct with regard to the thing he owns, to be respected by everyone, including himself. He doesn’t own that thing, but he is the proprietor of a right of ownership of it. Nevertheless, the Dutch Civil Code often uses the expression ‘things’ as shorthand for the right of ownership of the thing.” In real property it is demanded by the constitution that there has to be a transfer of a deed, once property is owned properly the owner’s right to the real property is protected by law. The Netherlands has intellectual property rights that include options to protect things under patent and copyright law. Under a global property rights ranking system maintained by the Heritage foundation the Netherlands ranks in a shared #2 position, and well above many other western countries.
5. Commercial Banks 4.0
The commercial banks in the Netherlands have strong networks throughout the country and provide all the services their customers need. Commercial banks in the Netherlands take deposits and give out loans to private individuals and businesses alike. Banks in the Netherlands are very free to do what they want with their money: be it dealing in securities, insurance, or the owning of other financial companies. These freedoms gives them a competitive edge versus other multinational banks who have similar freedoms, but can also be dangerous to the private depositors if the banks run into problems due to financial mismanagement without regulation. The Netherlands is not a very large country yet it has 3 large multinational banks, and about 20 smaller banks. De Nederlansche bank is the central bank of the Netherlands which is tasked with keeping financial stability, and prepare to banks to be shock resilient, efficient and reliable.
6. Communication systems 5.0
The communications networks in the Netherlands are widespread and well accessible. There are many newspapers and magazines focused on anything from news to lifestyle to academics that are readily available. There is a large network for data from internet to phone & fax, with over 88% over the population having access to the internet. There are multiple public broadcast television channels as well as many commercial cable channels. The Netherlands has a vast network for mobile phones and there are over 21 million mobile subscribers which in a country of almost 16 million people is over 125%. All these things considered it is hard to imagine being anywhere in the Netherlands and not having easy access to any and all mediums for communication.
7. Transportation 4.8
The transportation systems in the Netherlands are very widespread and well maintained. The main city hubs in the Netherlands have many types of transportation access. All major city hubs in the Netherlands have many roads and freeways that go in rings around them and connect to the other major hubs, in addition to an advanced and well maintained road and freeway system all major city hubs have train and bus stations that frequently depart to locations all over the country. Many cities have trams and access to waterways as well. In addition there are high speed rail connections to Belgium and south and Germany and east. The Netherlands has a large coast line and is host to the mouth of the largest river in Europe the Rhine, and with it one of the largest harbors in the world in Rotterdam. The Netherlands has 35+ airports this is allot considering how small the country is and also includes Schiphol which is Europe’s 4th busiest airport. Downgraded the score a little considering some traffic issues between a few of the main city hubs.
8. Education 4.8
Education in the Netherlands is some of the very best in the world. It is affordable to most anybody, and is subsidized heavily by the government. Children are lead through a path of education at certain ages. Kindergarten ages 4-6, primary education ages 6-12, secondary education ages 12-17/18, higher education 17/18+ which is a similar track to most western industrialized countries. The quality of education in the Netherlands is very high following PISA scores that measure global student success in 3 main fields. As a comparison the Netherlands had a higher score in reading than the US or the Average, it is in mathematics and sciences that the Netherlands really shines however being top 3 and top 5 in the world respectively.
9. Social mobility 4.5
The greatest driver for social mobility in the Netherlands is performance in academics. If someone reaches certain thresholds in schooling they will be able to earn higher incomes. The question then becomes about access to and affordability of higher education in the Netherlands, since primary and secondary education are free. Higher education is in the Netherlands is relatively affordable especially compared to the United States. The average cost of a yearly tuition at college in the Netherlands as opposed to the median annual income is about 11%. There are also subsidized loans and other financial aid available for students with financial hardships. Considering education is the main driver for social mobility, the chance for achieving social mobility in the Netherlands can be significant in as little as one generation.
10. Freedom from outside control 4.5
Within the Netherlands Dutch citizens are only subject to Dutch law. It is important to note however that as a part of both the European Union and NATO the Netherlands is responsible to the commitments it has made to both as part of its membership. This means that as much protection that is gained by the country and its citizens from being a member state of both the EU and NATO it’s citizens are subject to these laws as well. Considering that the Netherlands is a founding member of both organizations one could consider these laws not to be an outside source but more as added amendments to the Dutch law.
11. Protection of domestic enterprises 4.8
The Netherlands has a range of import taxes and tariffs to protect Dutch companies from cheap imports. The trade balance of the Netherlands shows exports of goods and services in billions of dollars has been consistently higher than its imports for over 10 years, and the difference is also rising (ex: 2004 exports were $5 billion higher than imports versus 2011 being upwards of $11 billion). Companies in the Netherlands have to deal with many very demanding regulations regarding for example some of the strictest environmental regulations, and pay out high wages compared to a global scale which leaves Dutch companies vulnerable to cheap imports from other countries so there are many tariffs and Value Added Taxes in place. There are some exceptions to these tariffs and taxes which mainly involve other European Union member states as part of EU cooperation and some third world countries as a form of outreach.
12. Foreign currency transactions 5.0
The Netherlands only uses the Euro (€) for any business conducted within the country. Any foreign currencies have to be converted to do business in the Netherlands. The Euro is used by all the member states of the Eurozone many of which are trading partners for the Netherlands so this makes this shared currency very efficient. The Netherlands trades with many other countries outside of the Eurozone as well, however to do business in the Netherlands only Euros are accepted.
13. Border control 3.5
The Netherlands has limited border security with the most emphasis laid on its Air and Seaports. The Netherlands shares borders with Belgium and Germany who are both part of the Schengen Agreement which made European Union member states borderless. The Netherlands has made additional efforts to increase border security at its land entries by installing an advanced camera system for surveillance since it is limited by the Schengen agreement to only randomly stop vehicles for physical inspection on a very infrequent basis something most would be smugglers are aware of. The Sea and Airports have far stricter security measures in place since it is not breaking any European treaties to do so. Rotterdam is one of the busiest harbors in the world and counts on increased communication and cooperation from other ports around the world to increase their security efficiency for example being part of the Container Security initiative.
14. Currency 5.0
The Netherlands uses the Euro (€) which is the Second most traded currency in the world and is backed by the 17 Eurozone member states. The Euro is the only currency used for daily trading in the Netherlands, and makes trading with other countries in the Euro Zone (many neighboring) very easy and efficient. The Euro trades at €1 to about $1.30 in 2013, and has consistently been higher than 1 to 1 with the dollar since 2003, with the US dollar being the most widely used currency in the world as a comparison.
15. Cultural, language homogeneity 4.5
As of 2012, about 20% of the population in the Netherlands has a non-Dutch background (11% non-western and 9% western). The non-Western immigrants in general have a harder time with cultural and language adaptation. There is a lot of assistance from the government to help smooth the transition of integration, and more recently there has been more pressure added to this by requiring people to speak Dutch or to be actively learning the language before receiving certain social services. A certain level of cultural and language adaptation is required to be able to get a job, to get welfare provided by the government. This means that businesses need not worry about adapting to any minority groups, their native languages or cultural preferences, and can instead just focus on the Dutch language and culture in marketing and hiring.
The Netherlands has a very accepting and proud society, and has successfully integrated multiple waves of incoming minority groups. There is a very long standing culture in the Netherlands and in general the Dutch are extremely proud of being Dutch. There is quite allot of patriotism and the even though it is well known saying that “all Dutch people speak English” (and other languages) they are still secondary to their own. There is a lot of national pride which is celebrated in many ways from the Royal family to the National soccer team. As the Netherlands has had allot of successful integration in the past there have been increasing problems with being a multicultural society and as of a few years ago the Government has moved away from allowing people to live in the country without integrating properly, and is now enforcing stricter laws notably forcing people to learn the language to receive social services, and more recently the ban on wearing burqas which directly effects Muslim minorities.
16. Political effectiveness 4.5
The Netherlands has solid natural disaster management, and is dealing with the growing terrorist threat. The most common natural disaster in the Netherlands are storms which can cause flooding, and as the Netherlands has a large part of the country that is well beneath sea level this has been a long standing threat. The Netherlands has become the worldwide expert on controlling storms and flooding. The Netherlands has erected a massive system of dams called the Deltaplan in their own country, and were the first asked to find solutions and preventative measures after such natural disasters as Hurricane Katrina and Sandy in the United States. The terrorist threat is rising around the world, and so also in the Netherlands. There have been incidents with terrorism in the Netherlands in the past, and the government has shown that it is learning and adapting to these changes and cooperating internationally to share information and strategies with other countries that are facing similar threats.
17. Institutional stability 4.8
The core institutions in the Netherlands are very stable. Even as political power shifts throughout elections, which it does often, the core institutions stay the consistent. People in the Netherlands take pride in doing things the right way, no matter what peoples political persuasion ,unless very extreme, they do not request their politicians make huge changes to the core institutions that the citizens depend on, if they did the government would fall under heavy protest and would be reformed after new elections.
18. Honest government 4.7
The level of corruption in the Netherlands is relatively low however there is an increased amount of political lobbying happening over the last few years. This lobbying is mainly aimed at individual politicians however and does not reach as far as manipulating the voice of entire parties. The multi-party system allows for parties to rise and fall based on their reputation, and parties cannot just hide behind being immovable objects that never fall regardless of their actions. The Netherlands received a score of 84/100 from the website transparency.org which ranks them 9th in the world which is a very solid score. The political parties as a whole are kept in check by the efficiency of the Centraal Plan Bureau which does analysis on Economic policies among other things. The Analysis that is done by the CPB is so effective that it makes it hard for political parties to attempt trickery by for example saying one thing to the public, and writing up others in policy proposals. Overall the people in the Netherlands have a general feeling of faith in their government’s honesty, and are more concerned than actually worried at any point in time.
19. Common Laws 5.0
The legal system in the Netherlands is not easily manipulated, even with high priced legal representation. Some of the primary factors that make it possible for attorneys in the United States, for example, to get different results are not applicable to the Dutch system. Courts in the Netherlands have one or more judges, depending on the case, and no jury. The fact that there is no jury to skillfully manipulate, means there is less use that comes from having a high-priced defense lawyer. Another factor is that the lawyers who represent people are not public defenders; they are lawyers from the community, and these lawyers are the same ones you could pay for yourself. However, they are paid for by the state if your case requires it, and you can even request them by name. The legal system in the Netherlands is the same in all parts of the country. The Dutch legal system is split into 10 judicial districts however they all practice the same law. All 10 districts have courts for administrative law, civil law, and criminal law. There are also Courts of Appeal and a Supreme Court in the Netherlands. It is written in Dutch law that all legal rights are equal for both men and women, and there is an Equal Treatment Commission (ETC) that is tasked specifically with ensuring that the Courts are not discriminating on the grounds of race, nationality and religion in relation to ethnicity.
20. Central bank 4.0
The Central bank of the Netherlands is De Nerderlansche Bank which is part of the European System of Central Banks (ECSB). De Nederlansche Bank is independent from political influence. All European central banks fall under the 1998 Bank Act for ECSB – replacing that of 1948 – the Bank has the following tasks:
• Within the framework of the ESCB, the Bank shall contribute to the definition and implementation of monetary policy within the European Community (EC). The Bank has the objective to maintain price stability. Without prejudice to this objective, the Bank shall support the general economic policy in the EC.
• The Bank shall hold and manage the official foreign reserves, and shall conduct foreign-exchange operations.
• The Bank shall collect statistical data and produce statistics.
• The Bank shall promote the smooth operation of payment systems; it shall take care of the banknote circulation.
• The Bank shall supervise banks, investment institutions and exchange offices.
• The Bank may, subject to permission by Royal Decree, perform other tasks in the public interest. The European Central Bank (ECB) may also ask the Bank to perform extra tasks.
As it was before it became a part of the ECSB the Nederlandshe Bank is independent from governmental control, but does have to deal with the Eurozone now.
21. Domestic budget management 3.5
The Netherlands is currently having a lot of issues getting its budget in shape although overall they have not had a budget deficit larger than 5% of GDP more than once in over 10 years. The European Union has a set goal that member countries must have their budgets exceed 3% of GDP although many of the larger members consistently do so. The next few years will be important for the Netherlands to see if they can their budget in order. The current problems are offset with a long history success in this area.
23. Economic statistics 5.0
Statistics in the Netherlands are readily available for anyone to find. There is a governmental body called Statistics Netherlands (CBS) which is run by the Minister of Economic Affairs and has many management bodies to ensure accuracy and consistency. There are very detailed records available on many subjects with many different themes on the internet but also published in books and magazines. All statistical results found by the CBS are shared openly with the media and are updated daily. The CBS is also dedicated to quality of statistics and has an annual quality declaration that follows all standards set by the European Statistical System (ESS) of the European Union and actively seeks out to improve on it.
24. Protection of public health and safety 5.0
In 2012 the Netherlands was the winner of the Euro Health Consumer Index. The Netherlands won by a landslide victory and has won the award many times. This makes the Netherlands very comparative on a global scale especially since quality healthcare is far more accessible for people of all income ranges. Health insurance in the Netherlands is required by law. Private health insurance companies in the Netherlands are forced by the government to offer fair all inclusive standard packages to everyone even high-risk cases at a balanced price. The infant mortality rate in the Netherlands is among some of the lowest in the world and has shown consistent improvement over the last 50 years, and the same goes for incidents of Tuberculosis.
25. High Wage Policies 5.0
The GDP per capita in the Netherlands is high and has been for many years. People that are employed have enough money for a comfortable lifestyle, and even those at the lower ranges of the income bracket have enough money to save or splurge occasionally. Good wages are guaranteed because of the government often leaning towards this perspective and the power of the labor unions. Over 25% of employed in the Netherlands are part of labor unions which gives them a significant amount of power. The labor unions bargain with employers over wages and work conditions yearly and these deals are binding and enforced by the government. The unions also advise on economic legislation through their membership in the Social Economic Council (SER).
26. Environmental protection 5.0
The Netherlands has some of the strictest environmental policies in the world. They are enforced strictly, and it is well known that industry in the Netherlands has some of the most advanced green technology enforced upon them. The government works with these companies to make the costs more competitive with tax breaks. In 1989 the Netherlands set up a National Environmental Plan that is not only strict but progressive and is continuously revised and updated. This plan sets forth future goals that are ahead of most global regulations and can serve as a blue print for progressive environmental action and sustainability around the world.
27. Strong Army 5.0
The Netherlands has some of the highest end military technology available, this combined with the fact that the military trains with and by the British and the United States of America makes them a formidable opponent. The Netherlands has very powerful allies in the European Union the UN and the United States of America. Land invasion of any country is becoming increasingly less likely to ever happen in the West however if the Netherlands was to be attacked on land their Army and Air force have recent experience from Operation Enduring Freedom and other NATO missions, and are very well equipped and trained. Finally the Netherlands is a nuclear power, and although it does not actively produce or purchase any nuclear weapons they have nuclear weapons in holding from the United States of America.
28. Foreign trade impact 1.0
As of 2011, Imports of goods and services were 74% of GDP and Exports of goods and services were 83% of GDP. Combined the trade balance of imports and exports of goods and services in the Netherlands is at 157% of GDP not even close to the desired 33%, and so it is safe to say that the Netherlands is heavily dependent on foreign trade.
29. Management of foreign currency budget 4.5
The Netherlands gets a high score here because it has maintained a balance of less than 10% of GDP for the last 10 years. The Netherlands has a strong position in the Eurozone for trading currency and is bordered with many trade partners. The Netherlands also has the port of Rotterdam which is one of the busiest ports in the world (top3). The account balance as of 2011 in the Netherlands is between 8.5% and 9.5% as a percentage of GDP which is close to the ten percent mark but the statistics show that these trends are consistently between 4% and 9% for many years depending on source.
30. Layers of collective action 4.5
Private citizens in the Netherlands have the opportunity to be involved in, or have an influence in the decision making process of their local government. By law the national government must stimulate decentralization and they actively do so. The country is split into 11 provinces and has about 420 municipalities. The national government, together with the municipalities, works on ways to increase the amount of responsibility carried by each municipality with particular focus on welfare and social services. This same decentralization has a trickledown effect on the rest of local government which allows for people to be actively involved in their local government if they choose to be involved in such things as school boards, water boards, and so on. The Netherlands is not a very large country and so some organizations that would need to be decentralized in larger countries do not have this need in the Netherlands.
31. Pro-business Climate: 5.0
Flaunting wealth and status is frowned upon in the Netherlands and therefor it is not the reason people get involved in business. The Netherlands has a long lasting tradition of business professionalism, is seen as an art. As some sources state that the country is built upon its success in international business. Many people work in Government run services industries and so working in private business is looked upon as a very independent and high achieving line of work. The government strongly assists and promotes national companies with tax breaks and assistance with regulations. Overall the business environment is very healthy.
32. Government Enterprise: 4.0
Government spending in the Netherlands is approximately 50% of GDP which according to some sources makes it a repressed market. It is worth noting that there is not an abundance of natural resources or land to exploit, and that most successful business in the Netherlands has come from Trade, Finance and advanced service industries this makes the Government spending and involvement look less imposing on business freedom and more focused on keeping things running smoothly especially since the government supports smooth transition into privatization when there is a viable candidate. Recent examples of this are railway and telecom companies that have privatized. The Netherlands employs a centralized model for its state owned enterprises which is run by the Dutch ministry of Finance. It is in charge of all state owned enterprise and its role in many industries is significant.
33. International Security Agreements: 5.0
The Netherlands is a very small country with a small but well equipped all-volunteer army. The Netherlands does not have a lot of power if it would come to a modern land war however the chances of this are extremely remote. In addition the Netherlands has a well-trained and equipped air force as well as access to Nuclear Weapons and components. The Netherlands is one of the ‘Core’ countries within the European Union together with Germany, France, the United Kingdom, Italy, Belgium and Luxembourg. The other counties in the EU therefore are subject to the decisions made by this ‘Core’. This Gives the Netherlands a strong point of power within the EU. The Netherlands is also an original member of the North Atlantic Treaty that established NATO.
34. Protection of domestic enterprises from government mandated costs: 4.0
The government imposed costs on business in the Netherlands are relatively high as compared to the rest of the EU and the United States, while they are very high as compared to countries like China and Mexico. The Netherlands has some of the highest environmental tax rates in the world, and has for some time. However newer UN and other global standards are starting to catch up to those in the Netherlands and the companies that have already gone through these transitions in the Netherlands have a head start on these requirements, this is in addition to an increase in consumers becoming more environmentally conscious, and less risk of potential costs incurred from accidents that involve expensive clean ups and hits on reputation and customer popularity ex. Oil spills. The Netherlands does boast some interesting and beneficial business tax laws and has, as opposed to having quite high personal income taxes, very internationally competitive business income tax rate with some special additives. These additives consist of zero percent withholding taxes on royalties leaving the country to potentially tax havens. Also ‘the Innovation Box’ is a Dutch corporate tax facility that allows Dutch taxpayers to benefit from a favorable effective tax rate with respect to income derived from qualifying intellectual property. Both resident and non-resident taxpayers can benefit from this facility. The effective tax rate in the Innovation Box is 5% down from 25% normal. Finally the Netherlands has a host of tariffs that exclude EU and developing nations, but include many other competing countries.
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