Development aid that benefits the Netherlands: “A company makes no profit from the poorest”
Last week, Minister Klever announced that from 2027, development aid will only serve the direct interests of the Netherlands. What does this decision mean? Five questions for Paul Smeets, professor of philanthropy and sustainable finance at the University of Amsterdam.
At 2.4 billion euros, this is the cabinet’s biggest cut. From 2027, only 3.8 billion euros per year will be spent on development aid. How much is that?
“Not enough. Before these cuts, the Netherlands was already spending 0.55 percent of its gross domestic product (GDP), which is below the UN standard of 0.7 percent. So for every 200 euros spent in the Netherlands, one euro goes to the poorest of the poor. Now that will be even less.”
“And that while there are 719 million people worldwide who have to get by on less than two euros a day. And now the minister has announced that all the money we are going to spend on other countries should only be in our direct interest. That makes me a little sad.”
To what extent is development aid pure charity?
“Indirectly, development aid always results in developments that are also good for the Netherlands. If other countries are doing better economically, we will also do better because other countries will buy our goods. And it is also in our interest to help developing countries with the energy transition if we want to achieve our climate goals.”
“The most important thing, in my opinion, is that it is also a moral obligation. As a rich country, you have a duty to help poor countries. And I had hoped that the Netherlands, as a European country, would take on a role on the world stage, especially now that America is failing to do so.”
Is development aid an effective way to donate money when you look at it from a global perspective?
“No, it is not. And that is also a critical comment: a lot of development aid does not end up where it is supposed to. While at the same time, there is independent research on how to best spend money to help people. The Doneer Effectief foundation has summarised that research and made a list of proven effective charities.”
“And then it appears that the best use of money is for example to fight diseases that mainly affect developing countries. Diseases such as diarrhoea, smallpox, a lack of vaccinations or vitamin A deficiency. But those programmes disappear if you only look at your own interests. A Dutch company is not going to make any money from people who have to get by on less than two euros a day. Besides, it is very effective to simply give the poorest people money. Not really a business model for a company either.”
In addition, the minister wants to use development aid to prevent refugees from Africa coming to the Netherlands. By fighting human trafficking in the conflict areas, providing food and water and strengthening the police.
“Giving people food is one of the least effective things you can spend your money on. An appalling book has been written about this, entitled the crisis caravan by investigative journalist Linda Polman. Food aid often does not end up in the right place and, moreover, it is not a long-term solution. For every euro you spend on disease control, you get ten times more return than the euro you spend on food. So in this way, the minister is not tackling the core of the problem.”
What now?
“To end on a positive note: recently, software company Afas donated 600 million euros in shares to charity. That is the largest donation I have seen in the Netherlands to date. So if the government is no longer going to do it, I really hope that companies and private donors will fill the gap. They are more than welcome to talk to me about it.”
