News / 8 November 2013

Dutch Good Growth Fund under attack

On Monday 11 November the Dutch Parliament debated  on the Dutch Good Growth Fund (DGGF), which was initially launched in 2012 under Minister Ploumen for Foreign Trade and Development. The fund aims to promote ‘development relevant trade’: imports and exports which are beneficial not only for the Netherlands, but also for the population in (poor) countries they invest in. However, the question is whether in practice it will work this way. According to Anouk Franck of Both ENDS,  the DGGF focuses too much on trade, and economic factors. This is reflected in critical report which was recently published by ActionAid, SOMO and Both ENDS.

What was the debate in the Parliament about?
A total amount of 750 million euro's should be made available through the Fund in the next 5 years. The main topic of the debate was on how that money should be spent. There are many different opinions about this. “The way the Fund is currently designed, it primarily benefits Dutch business. There are absolutely no guarantees that people in developing countries will benefit as well", Anouk Franck says. “For example, the set of criteria that investors have to meet to ensure their investments are beneficial to the local population and no human rights are violated, are not well developed. These criteria are vague and too flexible. Companies are expected to take their responsibility and if they don't, that is if local people actually suffer damage from DGGF supported projects, there is no independent complaints mechanism these people can go to.”

Trade more important than aid
“In the area of Suape in Brazil for example, the sea port is being expanded. Here, damage is caused to local communities and their natural environment by, among others, a Dutch dredging company. This project is supported with an export credit ensurance from Atradius Dutch State Business (Atradius DSB). Our report also shows that project financing is often not transparent. In Laos investments have been made in hydropower through the Dutch government, but it is not clear how this project will actually benefit the local poor population. Chances are that in the construction of these hydropower plants local communities are forced to move without a fair compensation.” According to Franck, these examples clrearly show what happens when there is too much focus on the economic aspect of development. In order to relevantly contribute to development and to reach poor people, social and environmental aspects of development should be taken into account, as well as the role DGGF supported projects can play in development.

But then?
“Our main goal is to make sure the DGGF becomes more transparent and can be held accountable for the projects it finances. In this way potential damage, abuse and human rights violations can be detected in time and prevented. Hopefully there will be much more discussion about how this fund can reach and help poor people.”


More information?

Report about Dutch Good Growth Fund

About the Laos example: video ‘private sector development: a blessing or a curse?’ (in cooperation with Action Aid, SOMO and Both ENDS)

About the Suape example

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