Netherlands: Pakistan's Trade Partners

Economic Review, April 1990 | Go to article overview

Netherlands: Pakistan's Trade Partners


The Netherlands has maintained development cooperation relations with Pakistan since 1962. An annual development budget of some 60 million guilders (30 million dollars) is available, although this sum may vary slightly from year to year. This stable relationship reflects Pakistan's status in the Dutch development cooperation programme; it is one of the ten "programme countries" with which the Netherlands cooperates most closely.

From many years now the Netherlands has earmarked 1.5 per cent of its net national income (that is, approximately 1 per cent of its gross national income) for development cooperation. This makes the Netherlands one of the few countries which not only meet the United Nations' recommendation on the proportion of national income to be allocated for development cooperation, but actually contributes more. The recommended proportion is 0.7 per cent of gross national income.

While in the early years of Dutch-Pakistani development cooperation the main emphasis was placed on supplying goods, project aid has become increasingly important over the years. Since 1987 no activities have been funded through loans. The Netherlands now supplies Pakistan with funds in the form of grants only.

Some 30 per cent of the annual budget is spent on goods-generally artificial fertiliser. About one quarter is used for co-financing through international organisations; this means that various projects organised in Pakistan by such institutions as the World Bank or the Food and Agriculture Organisation (FAO) are funded by the Netherlands.

After deducting 30 percent for goods supplies and approximately 25 per cent for co-financing, rather less than half of the Netherlands' budget for development cooperation with Pakistan is left for other projects. These are organised on a bilateral basis. As a large number of countries are involved in contributing towards Pakistan's development, the Netherlands has decided, following consultation with the Pakistani authorities, to focus cooperation on particular sectors of the economy and particular regions of Pakistan. As regards the sectors, the Netherlands directs the main thrust of its support towards the structural improvement of rural living conditions, small-scale industry and institution building. The bulk of Dutch development cooperation is aimed at the regions of Balochistan and North West Frontier Province, although some small-scale industrial projects in the Punjab are also undertaken.

Rural Development

Integrated rural developments is the key to bringing about structural improvement in rural living conditions. The concept involves not only agriculture and animal husbandry, but a multitude of interlinked factors which combine to shape rural life. Examples of projects of this nature in Pakistan include the following: - Pate Groundwater Development a well creation project aimed at improving agricultural production; - Social Forestry in Malakand, a reforestation project with marked social aspects; - Groundwater Investigation in North West Frontier Province, a project aimed at helping the authorities to chart the available groundwater resources; - The Aga Khan Rural Support Programme, a rural development programme implemented by a non-governmental organisation, the aim being to help villagers to improve their own lives both technical and financial terms. …

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