Economic Integration, Organizations, Issues, and Challenges of Netherlands

The History of European Integration

The history of European integration in general, and particularly economic integration in the previous 60 years, begins with the political initiative of Johan Willem Beyen, the Dutch Minister of Foreign Affairs. The concept becomes a replacement/expansion of the Six’s existing ECSC, OEEC, and BLEU models of political and economic union. Western European relations then progressed through customs union, economic union, fiscal union, and finally political unity, which is now known as the EU (CVCE, 2016). Nowadays, the country is also a member of the Eurozone. Therefore, it has its role in financial problems of common currency area and effects of union’s monetary policy (Dorrucci, Ioannou, Mongelli, and Terzi, 2015).

Economic Integration with Benelux and Germany

The most profound economic integration Netherlands have with other countries of Benelux due to geographical proximity and historical relations (CVCE, 2016). The cooperation with Germany in economic questions and especially in mutual trading has support by geographic proximity and common language for part of the population. The interests of Netherlands in the current version of EU dominated by Germany and France has poor representation that leads to forming alliances outside this union (Schout, 2017). The country today has a Euroskeptic position, new line in internal economic politic is an introduction of the flat income-tax system and active investments into human and physical infrastructure (Eijffinger, 2017).

Integration Initiatives and International Trade

One of latest integration initiatives Netherlands plays an important role was an agreement with South Africa. As a result, the main trading partners of Netherlands are Germany, Belgium, UK, France, Italy, but as well US, China, and Russia (OEC, n.d.). Among this list only Germany and Belgium are actively involved both in export and import, UK, France, and Italy are mostly export partners, while Russia, China, and the US imports partners.

Business Organizations and Commercial Attractiveness

The Netherlands ranked seventh in the list of Best Countries for Business in the world provided by Forbes. Among characteristics making this country so attractive for commercial agencies is strategic location in the Middle of Europe, near the sea, on the cross of various trading routes. Also, the country provides favorable tax structure, a workforce of high quality, and well-developed infrastructure. The Netherlands are famous among multinational businesses of various size, locating here headquarters for regional and European operations. In the country situated as well some marketing and sales departments, service and data centers (build on highly developed transportation and telecommunication infrastructure) (PWC, 2017).

Many foreign-owned companies of various industries locate here their manufacturing units. Research and development departments of multinational corporations find in the Netherlands supportive R&D tax credits, research institutes with leading innovative agenda, and opportunities for strategic partnership with government and science. The country is attractive for logistics and distribution operations of multinational companies as soon as it has a second place in the rank for overall logistic performance, play its role the transport-hub position of the Netherlands. Finally, the climate supporting innovation and entrepreneurship makes the country the first in the list of places to run startup provided by Startup Nation Scoreboard (PWC, 2017).

The primary industries actively developing and operating in the Netherlands are agrifood (the second most abundant exporter worldwide and the first in EU), logistics (the first largest port in Europe, and the ninth in the world, the forth by logistics performance). Also, the country is famous for information and technology (the first in the level of connection, and use of ICT), creative (advertising, fashion, media development), high-tech systems (whole R&D ecosystem, institutes, massive investments). Historically the Netherlands busy with chemicals (the fifths exporter of chemicals and home for 19 leaders in the industry). An important role in economy plays life sciences and health (exporting pharmacy, having the cluster for innovative life sciences business, top places in ranks for patents in biotechnology and medicine), and energy (renewable and smart energy, plug-in electric cars) (PWC, 2017).

Social and Cultural Issues

The Netherlands is a country with a significant share of immigrants that lead to some cultural and social issues, in particular of integration newcomers and their children into local society with a Dutch background. Most significant groups of the population involved in the process of integration are four non-western origins, six non-western refugees, and three east European groups (CBS, 2016). With the integration processes related issues of religious diversity, conflicts around customs and appropriate behavior. The ethnic diversity may lead to discrimination of particular groups, problems with education or finding the job.

Within the working environment, cross-cultural conflicts are the usual problem; they come from culture shocks meeting controversy between ideals coming from family and culture of origin and the Dutch working ethic and habits. Among moments that are very specific for the Netherlands is a bureaucracy. Thus final decisions may be far away from initial inputs and ideas of participants, as well as egalitarian organizational structure (Dancet, 2014).

The other issue is a discrimination of LGBT group of the population, while the country is quite liberal it is still possible to meet an adverse reaction from the employer. By the recent survey up to 30% of the focus population felt discriminated against or harassed because of sexual orientation, 13% meet discrimination in the process of a job search or at work, and 20% attend it in other areas due to LGBT status. In schools this group of people is highly discriminated, that prove 88% of respondents (Fischer, 2013).

Challenges of the Netherlands

By the OSCE project, officials of the Netherlands provided the evaluation of critical challenges and threats facing the country. Most of the named problems relate to two main categories: “the adverse consequences of technological development and economic growth, and

the lack of adequate responsiveness to these adverse consequences” (Haar and Maas, 2014). In particular, the most frequently mentioned challenge is a growing inequality. The population of the Netherlands divides into two groups – some people having a competitive advantage through high education and gain by globalization while others less educated suffer by the same tendency.

The other significant challenge for this country lying near the sea is a climate change combined with the loss of biodiversity; however, experts find the direct impact of this problem manageable in the Netherlands. As well the relatively minor issue is a growing scarcity of water and raw materials. The vulnerable object in the country is its ICT infrastructure, damage to it by natural disasters may become a severe challenge for the Netherlands (Haar and Maas, 2014). On the other hand, by the opinion of OECD experts, the country should pay more attention to environment and energy challenges, as the Netherlands today are dependable on fossil fuels more than in 90% of the energy production (OECD, 2017). Possibly, the high insurance of officials in the minor importance of the problem and country abilities in this sphere makes actions of Netherlands, initially the early leader in green technologies, slower and weaker than they should be.

References

CBS. (2016). Annual report on integration 2016 Summary. Statistics Netherlands. The Hague/Heerlen/Bonaire.

CVCE. (2016). The Beyen Plan. https://www.cvce.eu/content/publication/2007/3/5/197af558-d77d-40aa-b517-ba468d61919e/publishable_en.pdf

Dancet, L. (2014). Cultural conflicts in the Dutch working environment. https://www.iamexpat.nl/expat-info/dutch-expat-news/cultural-conflicts-dutch-working-environment

Dorrucci, E., Ioannou, D., Mongelli, F., and Terzi, A. (2015). Europe’s challenging economic integration: Insights from a new index. http://voxeu.org/article/economic-integration-europe-insights-new-index

Eijffinger, S. (2017). Is the Dutch election result a turning point for Europe? https://www.weforum.org/agenda/2017/03/is-the-dutch-election-result-a-turning-point-for-europe

Fischer, C. (2013). Social issues: Rainbow realities. https://www.iamexpat.nl/expat-info/dutch-expat-news/social-issues-rainbow-realities

Haar ter, B, and Maas, E. (2014). THREATS AND CHALLENGES FOR THE NETHERLANDS. https://www.clingendael.org/publication/threats-and-challenges-netherlands

OEC. (n.d.). Netherlands. https://atlas.media.mit.edu/en/profile/country/nld/

OECD. (2017). The Netherlands should strive to meet energy and environment challenges. http://www.oecd.org/newsroom/the-netherlands-should-strive-to-meet-energy-and-environment-challenges.htm

PWC. (2017). Doing business in the Netherlands. https://www.pwc.nl/nl/assets/documents/pwc-doing-business-in-the-netherlands-2017.pdf

Schout, A. (2017). FRENCH-GERMAN EU AXIS PUTS THE NETHERLANDS ON THE SPOT. https://www.clingendael.org/publication/french-german-eu-axis-puts-netherlands-spot