Economy of the Netherlands - AbsoluteAstronomy.com

Index of Economic Freedom

The Index of Economic Freedom is a series of 10 economic measurements created by The Heritage Foundation and The Wall Street Journal. Its stated objective is to measure the degree of economic freedom in the world's nations....

, the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

is the 13th most laissez-faire

Laissez-faire

In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....

capitalist economy out of 157 surveyed countries. At the time of writing the Netherlands is the 16th largest economy of the world. (see: List of countries by GDP (nominal)) Between 1998 and 2000 annual economic growth (GDP) averaged nearly 4%, well above the European average. Growth slowed considerably in 2001-05 as part of the global economic slowdown. 2006 however, showed a promising 2.9% growth. Yearly growth accelerated to 4.2% in the third quarter of 2007. Inflation

Inflation

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

is 1.3% and is expected to stay low at about 1.5% in the coming years.

The Netherlands is a founding member of the European Union

European Union

The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

, the OECD and the World Trade Organization

World Trade Organization

The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

Overview

The Netherlands

Netherlands

The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

has a prosperous and open economy

Open economy

An open economy is an economy in which there are economic activities between domestic community and outside, e.g. people, including businesses, can trade in goods and services with other people and businesses in the international community, and flow of funds as investment across the border...

, which depends heavily on foreign trade

Trade

Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

. The economy is noted for stable industrial relations, fairly low unemployment

Unemployment

Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...

and inflation

Inflation

, a sizable current account

Current account

In economics, the current account is one of the two primary components of the balance of payments, the other being the capital account. The current account is the sum of the balance of trade , net factor income and net transfer payments .The current account balance is one of two major...

surplus, and an important role as a European transportation hub. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanised agricultural sector employs no more than 2% of the labour force but provides large surpluses for the food-processing industry and for exports. The Netherlands, along with 11 of its EU partners, began circulating the euro currency on 1 January 2002. The country is one of the leading European nations for attracting foreign direct investment.

The stern financial policy has been abandoned in 2009 on account of the current credit crises. The relatively large banking sector was partly nationalised and bailed out through government interventions. Employment rate is expected to drop slowly to 4%. A large deficit in government accounts of 3.7% is expected for 2011. The government wants to stimulate the economy by accelerating already planned projects. Fundamental reforms for long term recovery will be implemented as well.

Government

While the private sector is the cornerstone of the Dutch economy, governments at different levels have a large part to play. Public spending, including social security transfer payments, is at 47.9% of GDP (2005). Total tax revenue was 37.5% of GDP (2005), which is below the EU average. In addition to its own spending, the government plays a significant role through the permit requirements and regulations pertaining to almost every aspect of economic activity. The government combines a rigorous and stable microeconomic policy with wide-ranging structural and regulatory reforms. The government has gradually reduced its role in the economy since the 1980s. Privatisation and deregulation is still continuing. With regards to social and economic policy, the government cooperates with its so called social partners (trade union

Trade union

A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

s and employers' organization

Employers' organization

An employers' organization, employers' association or employers' federation is an association of employers. A trade union, which organizes employees is the opposite of an employers' organization...

s). The three parties come together in the Social-Economic Council

Social-Economic Council

The Sociaal-Economische Raad is a major economic advisory council of the Dutch government. Formally it heads a system of sector-based regulatory organizations. It represents the social partners trade unions and employers' organizations...

(‘Sociaal Economische Raad’), the main platform for social dialogue

Social dialogue

A social dialogue can be any communication activity involving social partners intended to influence the arrangement and development of work related issues...

Trade and investment

The Netherlands, which derives more than two-thirds of GDP from merchandise trade, had strongly positive balance of payments for 2005 estimated at €31.5 billion. Leading export markets (2005) are Germany

Germany

Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...

with 25.1%, Belgium

Belgium

Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...

with 12.2% and the United Kingdom

United Kingdom

The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

and France

France

The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

with both 9.4%. Leading suppliers (2004) are Germany

Germany

(17%), Belgium

Belgium

(9.4%), China

China

Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

(8.8%) and the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

(7.8%). As becomes clear from these figures, Germany is by far the most important trading partner of The Netherlands.

Leading foreign investors in the Netherlands (2005) are the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

with 18.5%, the United Kingdom

United Kingdom

(14.1%), Germany

Germany

(12.0%) and Belgium

Belgium

(10.1%).

Sectors

Services account for more than half of the national income and are primarily in transportation, distribution, and logistics

Logistics

Logistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and...

, and in financial areas, such as banking and insurance. Industrial activity, including mining, generates about 20% of the national product and is dominated by the metalworking, oil refining, chemical, and food-processing industries. Construction amounts to about 6% of GDP. Agriculture and fishing, although visible and traditional Dutch activities, account for just 2%.

Energy

While its oil reserves

Oil reserves

The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is...

in the North Sea

North Sea

In the southwest, beyond the Straits of Dover, the North Sea becomes the English Channel connecting to the Atlantic Ocean. In the east, it connects to the Baltic Sea via the Skagerrak and Kattegat, narrow straits that separate Denmark from Norway and Sweden respectively...

are of little importance, the Netherlands is presently the second largest natural gas

Natural gas

Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

producer in Europe and the ninth in the world, accounting for more than 30% of EU total annual gas production and about 2.7% of the annual world total. Proven natural gas reserves of the Netherlands are estimated (as of January 2005) at about 50-60 trillion cubic feet, or about 0.9% of the world total. Although the Netherlands owns substantial gas reserves in the North Sea, most of its production is presently from on-shore wells, and much of the natural gas produced by the Netherlands comes from Groningen

Groningen (province)

Groningen [] is the northeasternmost province of the Netherlands. In the east it borders the German state of Niedersachsen , in the south Drenthe, in the west Friesland and in the north the Wadden Sea...

Province, which borders the North Sea. Consumption of natural gas in the Netherlands is only about two-thirds of its production; the rest is exported and the Netherlands is presently the world's fifth largest natural gas exporter. Partly as a result of this large reserve of natural gas, nuclear power

Nuclear power

Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...

accounts for only 3.8% of the country’s electricity production.

Nuclear energy

Researchers in the Netherlands

Netherlands

began studying nuclear energy

Nuclear power

in the 1930s and began construction of research reactor Dodewaard

Dodewaard nuclear power plant

Dodewaard nuclear power plant was a nuclear power plant with a boiling water reactor in the Dutch town of Dodewaard. The plant halted energy production in 1997.-History:...

in 1955. Researchers’ goal was to introduce nuclear power

Nuclear power

technology by 1962 and replace fossil fuels. In 1968, a test nuclear reactor was attached to the power grid. This unit was shut down in 1997. In 1973, the Netherlands had its first commercial nuclear reactor Borssele

Borssele nuclear power plant

The Borssele Nuclear Power Station is a nuclear power plant in the Dutch town of Borssele. It has a pressurised water reactor . Borssele is the only nuclear power plant still operational for electricity production in the Netherlands...

operational. Currently, the country has one pressurised water reactor (PWR) with a capacity of net MWe

MWE

MWE may refer to:*Manufacturer's Weight Empty*McDermott Will & Emery*Midwest Express, an airline*Merowe Airport - IATA code*Multiword expressionMWe may refer to:*Megawatt electrical...

485, which produces 3.8% of the country’s electricity.

In the 1970s, the Dutch chose a policy that required reprocessing all spent nuclear fuel

Spent nuclear fuel

Spent nuclear fuel, occasionally called used nuclear fuel, is nuclear fuel that has been irradiated in a nuclear reactor...

. In 1984, the government decided to create a long-term (100 years) storage facility for all intermediate and low-level radioactive waste and research strategies for ultimate disposal. In September 2003, the Central Organization for Radioactive Waste

COVRA

COVRA is a Dutch nuclear waste processing and storage company in Vlissingen,, which stores the waste produced in the Borssele nuclear power plant after it is reprocessed by Areva NC in La Hague, Manche, Basse-Normandie, France. Until the Dutch government decides where to eventually do with the...

created an interim storage facility for high-level waste.

In 1994, the Dutch government agreed with the operator of Borssele that it would be closed down by 2003. This decision was fought by the employees of the plant, which pushed the closure date to 2013, and in 2005, the closure was postponed to 2033.

Sources

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.

Overview

Government

Trade and investment

Sectors

Energy

Nuclear energy

See also

Sources