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National Trade Data Bank
ITEM ID     : ST BNOTES NETHERLA
DATE        : Oct 28, 1994

AGENCY      : U.S. DEPARTMENT OF STATE
PROGRAM     : BACKGROUND NOTES
TITLE       : Background Notes - NETHERLANDS

Source key      : ST
Program key     : ST BNOTES
Update sched.   : Occasionally
Data type       : TEXT
End year        : 1992
Date of record  : 19941018
Keywords 3      :
Keywords 3      : | NETHERLANDS

US DEPARTMENT OF STATE
BACKGROUND NOTES:  NETHERLANDS

Official Name:  Kingdom of the Netherlands

Profile
Geography
Area: 41,473 sq. km. (16,464 sq. mi.). Cities: Capital- Amsterdam
(pop. 687,450). Others-The Hague, seat of government, (pop.
449,350); Rotterdam, principal port (pop. 558,850); Utrecht (pop.
231,750). Terrain: Coastal lowland. Climate: Northern maritime.

People
Population: 15 million. Nationality: Noun-Dutchmen and Dutchwomen.
Adjective-Dutch.  Ethnic Groups:  Predominantly Dutch; largest
minority communities are Moroccans, Turks, Surinamese, and
Indonesians. Religions: Roman Catholic, Protestant, non-affiliated,
and other.  Language: Dutch. Education: Years compulsory-10.
Attendance-nearly 100%.  Literacy-98%. Health: Infant mortality
rate-6/1,000.  Life expectancy-76 yrs. (males, 73 yrs.; females, 79
yrs.). Work force (1985): 6 million. Agriculture-1.4%,  Trade-17%,
Industry-30%,  Services-45%. Of the above total, government-23% of
the work force.

Government
Type: Parliamentary democracy under a constitutional monarch.
Constitution: 1814 and 1848.

Branches: Executive-monarch (chief of state), prime  minister (head
of government), Cabinet. Legislative-Bicameral Parliament (First and
Second Chambers). Judicial-Supreme Court.

Subdivisions:  12 provinces.

Political parties: Christian Democratic Appeal (CDA), Labor Party
(PvdA), Liberal Party (VVD), Democrats '66 (D'66), other minor
parties. Suffrage:  Universal over 18.

Defense (1989): 2.9% of GNP.

Flag: Three horizontal stripes:  red, white, and blue, from top to
bottom.

Economy
GNP (1989): $224 billion; (1988) $227 billion.  GNP per capita (1988):
$15,000.  Annual growth rate (1989):  4.2%. Per capita income (1989)
$13,500. Inflation (1989): 1%; 1988: 0.7%.  Unemployment (1989):
6%; (1988): 6%. Gov't deficit/GNP (1989): 5% (US: 3%).

Natural resources: Natural gas.

Agriculture (4% of Net National Income (NNI)): Products-dairy,
poultry, meat, flower bulbs, cut flowers, vegetables/fruits, sugar
beets, potatoes, wheat, barley, oats.

Industry (19% of NNI): Types-steel, metal products, electronics, bulk
chemicals, natural gas, petroleum products, transport equipment.

Trade (1989):  Exports-$103 billion:  mineral fuels, chemical products,
machinery and transport equipment, foodstuffs.  Imports-$104 billion:
mineral fuels and crude petroleum, machinery, chemical products,
foodstuffs. Major trade partners-FRG, Belgium, Luxembourg, France,
UK, US.

Official exchange rate (average 1989): 2 Dutch guilders= US $1.

Foreign Development aid:  1.5% of NNI, (1990 est.: $3 billion).

Membership in International Organizations
UN, North Atlantic Treaty Organization (NATO), European
Community (EC), Organization for Economic Cooperation and
Development (OECD), International Energy Agency (IEA),
International Atomic Energy Agency (IAEA), European Monetary
System, BENELUX Economic Union, European Space Agency (ESA),
INTELSAT, Western European Union, others.


PEOPLE
The Dutch are primarily of Germanic stock with some Gallo-Celtic
mixture.  They have clung tenaciously to their small homeland
against the constant threat of destruction by the North Sea and
recurrent invasions by the great European powers.

Religion influences Dutch history, society, institutions, and attitudes
and is closely related to political life, though to a diminishing degree.
The right of every individual to religious freedom is guaranteed by the
constitution.  Although church and state are separate, a few historical
ties remain-the royal family belongs to the Dutch Reformed Church
(Protestant).

The arts have played a major role in the development and
representation of Dutch culture.  The works of Old Masters, including
Rembrandt and Hals, and later artists, such as Mondriaan and Van
Gogh, are on display in museums throughout the Netherlands.  The
government strongly supports artists, sculptors, and architects and
attempts to use their works in public projects whenever possible.
The Amsterdam Concertgebouw Orchestra and the Residentie
Orchestra in The Hague and the Rotterdam Philharmonic enjoy
excellent international reputations.  The Netherlands' active
intellectual life is stimulated by lively political satire and a
counterculture and is sustained by prestigious universities.


HISTORY
Julius Caesar found the Netherlands inhabited by Germanic tribes,
one of which, the Batavi, did not submit to Rome until BC 13, and
then only as an ally.  A part of Charlemagne's empire in the 8th
century AD, the area later passed into the hands of the House of
Burgundy and the Austrian Hapsburgs.  Falling under harsh Spanish
rule in the 16th century, the Dutch revolted in 1558, under the
leadership of Willem of Orange.  By virtue of the Union of Utrecht in
1579, the seven northern Dutch provinces became the Republic of
the United Netherlands.

During the 17th century, considered its "golden era," the Netherlands
became a great sea and colonial power.  Its importance declined,
however, after wars with Spain, England, and France in the 18th
century.  In 1795, French troops ousted Willem V of Orange, the
Stadhouder under the Dutch Republic and head of the House of
Orange.

Following Napoleon's defeat in 1813, the Netherlands and Belgium
became the "Kingdom of the United Netherlands" under King Willem
I, son of Willem V of Orange.  The Belgians withdrew from the union
in 1830 to form their own kingdom.  King Willem II was largely
responsible for the liberalizing revision of the constitution in 1848.

The Netherlands prospered during the long reign of Willem III
(1849-90).  At the time of his death, his daughter, Wilhelmina, was 10
years old.  Her mother, Queen Emma, reigned as regent until 1898
when Wilhelmina reached the age of 18 and became the monarch.

The Netherlands proclaimed neutrality at the start of both world wars.
Although the Netherlands escaped occupation in World War I,
German troops overran the country in May 1940.  Queen Wilhelmina
fled to London and established a government-in-exile. Shortly after
the Netherlands was liberated in May 1945, the queen returned.
Crown Princess Juliana succeeded to the throne in 1948 upon her
mother's abdication.  In April 1980, Queen Juliana abdicated in favor
of her daughter, now Queen Beatrix.

The Netherlands' once far-flung empire was granted full
independence or nearly complete autonomy after World War II.
Indonesia formally gained its independence in 1949, and Suriname
became independent in 1975.  The five islands of the Netherlands
Antilles (Curacao, Bonaire, Saba, St. Eustatius, and a part of St.
Maarten) are an integral part of the Netherlands realm but enjoy a
large degree of autonomy.  On January 1, 1986, Aruba, which had
been a part of the Netherlands Antilles, was granted a separate
status within the kingdom on par with, but apart from, the
Netherlands Antilles.   [For more information, see Background Notes
on Netherlands Antilles.]

GOVERNMENT
The present constitution dates from 1848 and has been amended
several times. The first level administrative divisions are the 12
provinces, each governed by a locally elected provincial council and
a provincial executive appointed by members of the provincial
council.  The province is formally headed by a queen's commissioner
appointed by the crown.

The government is based on the principles of ministerial
responsibility and parliamentary government.  It is composed of three
institutions:  the crown, the States General, and the courts.


The Crown
--   The monarch is the titular head of state.  The queen's function is
largely ceremonial, but she does have some influence deriving from
the traditional veneration of the House of Orange (from which Dutch
monarchs for more than three centuries have been chosen), the
personal qualities of the queen, and her power to appoint the
formateur, who forms the Council of Ministers following elections.


--  The Council of Ministers plans and implements government policy.
Most ministers also head government ministries, although ministers
without portfolio exist.  The ministers, collectively and individually, are
responsible to the States General (parliament).  Unlike the British
system, Dutch ministers cannot simultaneously be members of
parliament.


--   The Council of State, a constitutionally established advisory body
to the government, consists of members of the royal family and
crown-appointed members generally having political, commercial,
diplomatic, or military experience.  The Council of State must be
consulted by the cabinet on proposed legislation before a law is
submitted to parliament.  The Council of State also serves as a
channel of appeal for citizens against executive branch decisions.


States General (Parliament)
The Dutch parliament consists of two houses, the First Chamber and
the Second Chamber.  Historically, Dutch governments have been
based on the support of a majority in both houses of Parliament.

The Second Chamber is by far the more important of the two
houses.  It alone has the right to initiate legislation and amend bills
submitted by the Council of Ministers and shares with the First
Chamber the right to question ministers and state secretaries.

The Second Chamber consists of 150 members, directly elected for
a 4-year term (unless the government falls prematurely) on the basis
of a nationwide system of proportional representation.  This system
means that members represent the whole country, rather than
individual districts as in the United States, and are normally elected
on a party slate, not on a personal basis.  The electoral system
makes a coalition government almost inevitable.  Elections for the
Second Chamber were held in September 1989.  New elections are
not constitutionally required until 1993.

The First Chamber is composed of 75 members elected for 4-year
terms by the 12 provincial legislatures.  It cannot initiate or amend
legislation, but its approval of bills passed by the Second Chamber
is required before bills become law.  The First Chamber generally
meets only once a week, and its members usually have other
full-time jobs.  The last First Chamber was constructed as a result of
provincial assembly elections in June 1987; the Chamber will next be
revised following such elections in March 1991.


Courts
The judiciary comprises 62 cantonal courts, 19 district courts, 5
courts of appeal, and a Supreme Court which has 24 justices.  All
judicial appointments are made by the crown.  Judges are nominally
appointed for life but, in fact, are retired at age 70.


POLITICAL CONDITIONS
From the end of World War II until December 1958, the Netherlands
was governed by a series of coalitions built on a Labor-Catholic
base.  Since 1958, governments have been formed primarily from a
center-right coalition of the Christian Democrats and the Liberals.
The social democratic-oriented Labor Party generally has been in
opposition, except between 1973-77 and briefly from April 1965 to
October 1966, and from September 1981 to May 1982.  The Labor
Party is part of the present coalition.

The current government, formed in November 1989, is a center-left
coalition of the Christian Democratic Appeal (CDA) and Liberal (VVD)
parties headed by Prime Minister Ruud Lubbers of the CDA.  The
government has the support of 103 of the 150 members of the
Second Chamber who represent 10 political parties.  The four largest
parties hold 137 of the 150 seats.  They are:

--  Christian Democratic Appeal (CDA) was formed from a merger of
the Catholic People's Party and two Protestant parties, the
Anti-Revolutionary Party and the Christian-Historical Union.  The
merger process,  begun in the early 1970s to attempt to stem the
tide of losses suffered by religiously based parties, was completed
in 1980.  The CDA occupies the political center among the major
Dutch political parties.  It supports free enterprise and NATO
membership and holds to the principle that government activity
should supplement but not supplant communal action by citizens.
On the political spectrum, the CDA sees its philosophy as standing
between the "individualism" of the Liberals and the "statism" of the
Labor Party.  The CDA won 54 seats in 1989 parliamentary elections.
This equalled the party's strong showing in the 1986 elections.


--  Labor Party (PvdA), a European social democratic party, is left of
center.  Labor has 49 seats in the current Second Chamber which
makes it the second largest party after the CDA.  The party joined
the CDA to form the present government, after having spent most of
the past 11 years in opposition.  Labor's program is based on
greater social, political, and economic equality for all citizens,
although in recent years the party has begun to debate the role of
central government in that process.  The PvdA supports Dutch NATO
membership but has been critical of some alliance policies,
particularly regarding nuclear weapons.  Although called the "Labor
Party," it has no formal links to the trade unions.


--  The Liberal Party (VVD) is "liberal" in the European, rather than
American, sense of the word.  It thus attaches great importance to
private enterprise and the freedom of the individual in political, social,
and economic affairs.  The VVD is generally seen as the most
conservative of the major parties and solidly supports most NATO
policies.  The VVD was the junior partner in two governing coalitions
with the CDA from 1982-89, but is now in opposition with 22 seats in
the Second Chamber.


--  Democrats '66 (D'66), largest of the "small" parties in the Dutch
parliament. The electoral fortunes of D'66 have fluctuated widely
since the party's founding in 1966.  The 12 seats it currently holds
are slightly above the historical average of the party's showing over
the last 20 years.  D'66 is a center-left party, generally portrayed as
between the CDA and PvdA, with its strongest support among
young, urban, professional voters.  D'66 is currently an opposition
party.


ECONOMY
The Dutch economy is based on private enterprise.  Although the
government has little direct ownership or participation, it heavily
influences the economy, with more than 45% of the gross national
product (GNP) involved in its operations and social programs
(including transfer payments).  The government plays a significant
economic role through the many permit requirements and regulations
pertaining to almost every aspect of economic activity.

Services, which account for more than half of the national income,
are primarily in transport and financial areas, such as banking and
insurance.  Industrial activity provides about 22% of the national
income and is dominated by the metalworking, oil refining, chemical,
and food-processing industries.  Construction amounts to about 9%
of the national income.  Agriculture and fishing, although visible and
traditional Dutch activities, account for slightly more than 4%.

Foreign trade heavily influences the open Dutch economy, with
exports accounting for 66% of GNP.  The Netherlands find a liberal
commercial policy advantageous and participates in the European
Community (EC), the Benelux Economic Union, and the European
Monetary System.  It is a firm supporter of the General Agreement
on Tariffs and Trade (GATT) and supports multilateral trade
negotiations to establish freer and expanded world trade.

The recent political developments in Eastern Europe are not
expected to have significant effects on the Dutch economy during the
next few years because the Dutch level of trade and investment in
those countries is very low.

In 1959, the vast Slochteren gasfield in Groningen Province began
production and is now one of the world's largest producing natural
gasfields.  In addition, the Netherlands also discovered gas on the
North Sea's continental shelf.  At present, total proven natural gas
reserves (mainland and North Sea) amount to 1.2 trillion cubic
meters.  The reserves of other Dutch gasfields, including the Dutch
North Sea sector, total about 24% of those of Slochteren.  Current
gas production is running annually at about 72 billion cubic meters,
roughly half of which is exported to EC member countries.  General
government revenues from natural gas totaled about $8.7 billion in
1986 and accounted for more than 14% of total government revenue,
dropping to $2.9 billion in 1989 (4% of revenue).

Dutch economic growth has improved after several years of
lackluster performance.  The annual growth rate in 1989 was 4.2%,
while inflation remained low at 1.1%.  Corporate investment has been
high.  Weakening domestic demand and slower increases in export
demand are expected to slow down the rate of expansion in 1990.
The Netherlands' balance-of-payments current account displays a
strong surplus.

The CDA/VVD coalition under Prime Minister Ruud Lubbers has
agreed on the broad outlines of its economic policy for the 1990-94
period, leaving the basic goals of the previous government intact, but
changing its emphasis.  The new policies will boost public spending
on the environment by $3 billion and education, housing, social
security, and health by $1 billion over the next four years.  Defense
spending will grow by just 0.6% in 1990 and 1991, and will be frozen
in 1992 and 1993.  In total, the new policy measures will increase
public spending by 4.6 billion guilders (about $2.3 billion) per year by
1994.


Environmental Policy
Awareness of the environment plays a major role in Dutch life.  In
1988, the Netherlands spent 1.34% of its GNP on environmental
protection-almost twice as much per capita as in the United States.
The Dutch Ministry of Environmental Affairs has released an
ambitious and expensive-$3 billion-environmental plan for 1990-94.
Under this plan, Dutch industry will be required to double its
spending on environmental protection.  By 1994, industry will have
to spend an extra $1 billion each year to meet stricter pollution
control guidelines.

In November 1989, Prime Minister Lubbers presented his
government's proposals to the States General.  The Dutch goal is to
make production and consumption compatible with the conditions of
sustainable development within one generation.  In June 1990, a
supplement to the environmental plan, "Nmp-Plus", was submitted,
including plans for a leveling off and eventual reduction in CO2
emissions by 2000.

To finance this program, a CO2 levy has been introduced, which is
expected to generate $75 million in 1990.  This will be spent on
anti-acidification measures ($20 million), energy conservation ($30
million), and promotion of public transport ($25 million).

FOREIGN RELATIONS
The Netherlands abandoned its policy of neutrality after World War
II, and joined the NATO alliance as the best means to ensure
security and promote national interests.  The postwar Netherlands
governments have followed an active, engaged foreign policy in
many areas of the world.

In addition to pursuit of national interests, Dutch foreign policy in
recent years has been rooted in several important principles, which
include the promotion of peace and security in Europe, support for
Third World development, and respect for international law and
human rights.

The Netherlands seeks to advance many of its objectives through
multilateral cooperation.  It was a founding member of the European
Community, has long based its security policy upon membership in
NATO, and is one of five nations to sign the Schengen Accord
abolishing border controls between itself and Belgium, Luxembourg,
France, and Germany).

Economic and trade policy is closely coordinated through the
European Community and, to a lesser extent, other international
bodies, such as the Organization for Economic Cooperation and
Development, GATT, and the International Monetary Fund.

Other foreign policy interests generally take into account
consultations within European Political Cooperation, the political
consultation process of the EC.  The Netherlands also is a member
of the Benelux group (Belgium, Netherlands, Luxembourg).  Finally,
the Netherlands is an active and responsible participant in the United
Nations and its affiliated organizations.

The Netherlands is a strong proponent of North-South cooperation
and maintains an impressive development assistance program.  Aid
commitments are fixed by law at 1.5% of net national income,
although actual disbursements have not always reached that level.
For 1990, the development assistance program will give special
attention to four transnational problems:  poverty, population,
environment, and debt.  The Netherlands has had a long term
development relationship with 10 "program" countries (Bangladesh,
Egypt, India, Indonesia, Kenya, Yemen, Pakistan, Sudan, Sri Lanka,
Tanzania) and three geographic regions (the Sahel, Southern Africa,
and Central America).  They also contribute large amounts of aid
through multilateral channels, especially the UN Development
Program, International Development Association, and EC programs.
A large portion of Dutch aid funds are channelled through private
("cofinancing") organizations that have almost total autonomy in
choice of projects.  The Dutch are members of the European Bank
for Reconstruction and Development (EBRD) which was formed
recently to finance economic reforms in Eastern Europe.


US-DUTCH RELATIONS
Our partnership with the Netherlands is our oldest continuous
relationship and dates back to the American revolution.  Our
excellent bilateral relations are based on close historical and cultural
ties and a common dedication to individual freedom and human
rights.  An outward-looking nation, the Netherlands shares with the
United States a commitment to an open market and free trade.

In May 1989, Prime Minister Lubbers was in Washington on a private
visit and met with President Bush, and 2 months later, President
Bush became the first American President to visit the Netherlands
while in office.  The President went to the Netherlands as a guest of
Queen Beatrix and spoke in the church in Leiden used by the
Pilgrims before many of them sailed to America.  The United States
and the Netherlands often have similar positions on issues affecting
NATO, regional problems, trade, and economic cooperation which
enables them to work together both bilaterally and in the United
Nations and other international and regional organizations.


DEFENSE
The defense structure of the Netherlands comprises the Ministry of
Defense and the various branches of the armed forces.  Political
responsibility for the defense of the Netherlands lies with the minister
of defense and the state secretary for defense.  The Dutch, as
members of NATO, are engaged in arms control negotiations with
members of the Warsaw Pact which will affect the size and
equipment of the participants' conventional military forces.

The Royal Netherlands Army Forces (RNAF) has a total peacetime
personnel strength of about 123,000 military and civilians.  The Royal
Netherlands Navy is composed of escort ships, submarines, maritime
patrol aircraft, helicopters, a mine countermeasure force, and a
Marine Corps, as well as the necessary supporting elements.  Priority
has been given to anti-submarine warfare, with emphasis on air
defense and surface warfare.  The weapons systems of the Royal
Netherlands Air Force are primarily fighter aircraft and surface-to-air
guided weapons.

Principal Government Officials
Head of State-Queen Beatrix
Council of Ministers
Prime Minister-Ruud Lubbers
Vice Prime Minister and Finance-Wim Kok
Foreign Affairs-Hans van den Broek
Ambassador to the United States-Johan H. Meesman
Ambassador to the UN- Robert Jan van Schaik

Principal US Officials
Ambassador-C. Howard Wilkins, Jr.

Deputy Chief of Mission-Thomas H. Gewecke
Political Counselor-Lawrence G. Rossin
Economic Counselor-George Boutin
Administrative Counselor-Timothy E. Roddy
Commercial Counselor-Michael Hegedus
Public Affairs Counselor-C. William La Salle
Defense and Naval Attache-Capt. Bruce Barker
Army Attache-Col. William Mitchell
Air Attache-Col. Allen Ryals
Agriculture Counselor-Norval Francis
Chief, Office of Defense Cooperation-Col. Charles W. Brewer, USAF
Country Attache:  Narcotics-Joseph Beachell
Customs Attache-Robert L. Gerber
Consul General, Amsterdam-Jake M. Dyels

The US Embassy is located at Lange Voorhout 102, 2514 EJ The
Hague (telephone no. (070) 3-62-49-11). The consulate general is at
Museumplein 13, 1071 DJ Amsterdam  (tel. [phone]).


TRAVEL NOTES
Clothing:  Clothing needs are similar to those of Seattle, Washington.

Currency unit is the Dutch guilder (Fl.); foreign exchange control
regulations place no limit on the amount of foreign currency or
negotiable instruments that may be imported.

Health:  Medical facilities are good.  Community sanitation is
comparable to standards in US cities.

Telecommunications:  Facilities are good for local and long-distance
use.  Amsterdam and The Hague are six time zones ahead of
eastern standard time.

Transportation:  Good public transportation by bus and streetcar is
available in the cities and serves principal sectors of the city as well
as the suburbs.  Most Dutch cities are connected by rail, and almost
all regions of the Netherlands are accessible by good public
transportation.  Excellent transportation to other principal European
cities also is available.  The main international airport is at Schiphol,
near Amsterdam, but a few international flights also arrive at
Rotterdam and Maastricht Airports.


Published by the United States Department of State --  Bureau of
Public Affairs  -- Office of  Public Communication  --  Washington, DC
--  Jan. 1991  --  Editor:  Susan Holly
Department of State Publication  7967 -- Background Notes Series
--  This material is in the public domain and may  be reprinted
without permission; citation of this source is appreciated.


For sale by the Superintendent of Documents, US Government
Printing Office, Washington, DC  20402.