OECD Economic Surveys : Netherlands 1963.

39 Pages·2.156 MB·English

by  OECD

I . 2 . B . 2.
THE NETHERLANDS
THE LAND
BASIC STATISTICS
Area (1.000 sq.km.) (cid:9) 33.6 Major cities. 1963 (thousands of inhabitants):
Agricultural area, 1962 (1,000 sq.km.) . . . 25.6 Amsterdam (cid:9) 867
Woodland, 1962 (1,000 sq.km.)(cid:9) 2.7 Rotterdam (cid:9) 731
The Hague (cid:9) . 604
Utrecht (cid:9) 261
THE PEOPLE
Population, 1963 (thousand) 11,889 Tolal labourforce, 1961 (men/year). . . 4,455.000
No ofinhabitants per sq.km., 1963. . . . 354 Wage and salary earners, 1961 (men/
Net natural increase (average 1956-62). 152,713 year) (cid:9) 3.534.000
Net rate of increase per 1,000 inhabitants Wage and salary earners in agriculture,
(average 1956-62) (cid:9) 13.4 1961 (men/year) (cid:9) 109.000
Net emigration (average 1956-62) .... 2,527 Wage and salary earners in manufac¬
turing industries, 1961 (men-year). . . 1,205.000
PRODUCTION
Gross national product, 1962 (millions of Gross national product at factor cost by
guilders) (cid:9) -47,150 originin 1961 :
G.N.P.perhead. 1962(U.S.$) (cid:9) 1,110 Agriculture (cid:9) . 10%
Grossfixed investment (average 1957-62) : Industry and construction ....... 42%
PercentageofG.N.P(cid:9) 24 Other (cid:9) 48%
Perhead (U.S.S) ........ . 237 Proportion ofhome production in food avai¬
labilities (average 1956-58) (cid:9) 103
THE GOVERNMENT
Current government expenditure on goods Composition of the Second Chamber:
and services, 1961 (percentage of G.N.P.)- 28 Catholic popular party (cid:9) 33%
Current government revenues, 1961 (per- Labour party. ............ 32%
centage of G.N.P.)(cid:9) 3-4 Liberal party (cid:9) 12%
Central government debt, 1962 (percentage Anti-revolutionary party (cid:9) 9%
of Central Government current revenues). 181 Christian-historian party (cid:9) 8%
Other (cid:9) 6%
Last elections: 1959
Next elections: 1963
LIVING STANDARDS
Caloriesperheadperday, 1961-62. .... 3,030 Numberofprivatecarsper 1,000inhabitants,
Averagehourlyearningsofworkersin indus- 1962 . (cid:9) 62
Iry, April 1962(cid:9) 245 Number oftelephones per 1,000 inhabitants,
cents 1962 (cid:9) 150
Number of radio sets per 1,000 inhabitants,
beginningof1963 . (cid:9) 211
Number of T.V. sets per 1,000 inhabitants,
beginningof1963(cid:9) 106
Publicexpenditureonarts,sciencesand post-
school education (percentage of national
income1959)(cid:9) 6.51
FOREIGN TRADE
EXPORTS: IMPORTS:
Exports of goods and services, including Imports of goods and services, including
incomepaymentsfromtherestoftheworld income payments to the rest ofthe world
as a percentage of the G.N.P. (average as a percentage of the G.N.P. (average
1957-62)(cid:9) 1957-62) (cid:9)
Main exports in 1962 (percentage of total Main imports in 1962 (percentage of total
exports): imports):
Machinery and transport equipment. . . 21 % Machinery and transport equipment. . . 27%
Textileproducts(includingclothing) . . . 10% Crude petroleum and products(cid:9) 10%
Petroleum products (cid:9) 9% Textiles (cid:9) 10':;,
Chemical products (cid:9) 9% Chemical products (cid:9) 6%
Dairyproducts,eggs,honey(cid:9) 7% Iron and steel (cid:9) 5%
THE CURRENCY
Monetary unit: Guilder. Currency units per U.S. $. 3.6
ECONOMIC SURVEYS BY THE OECD
NETHERLANDS
1963
ORGANISATION FOR ECONOMIC
CO-OPERATION AND DEVELOPMENT
The Organisationfor Economic Co-operation and Development was set up under
a Convention signed in Paris on 14th December 1960 by the Member countries of the
Organisation for European Economic Co-operation and by Canada and the United
States. This Convention provides that the O.E.C.D. shallpromote policies designed:
to achieve the highest sustainable economic growth and employment and a
rising standardofliving in Member countries, while maintainingfinancialstab¬
ility, and thus to contribute to the development of the world economy;
to contribute to sound economic expansion in Member as well as non-member
countries in the process of economic development;
to contribute to the expansion of world trade on a multilateral, non¬
discriminatory basis in accordance with international obligations.
The legal personality possessed by the Organisation for European Economic Co¬
operation continues in the O.E.C.D., which came into being on 30th September 1961.
The Members of O.E.C.D. are: Austria, Belgium, Canada, Denmark, France,
the Federal Republic of Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United
Kingdom and the United States.
This document was approved
by the Economic and Development Review Committee
in April 1963
CONTENTS
I. THE NETHERLANDS ECONOMY SINCE 1959 (cid:9) 5
The supply situation (cid:9) 6
Principal components of demands (cid:9) 9
Internal and external equilibrium (cid:9) 11
Effects of shorter working hours (cid:9) 12
Consequences of the revaluation of the guilder 14
II. THE ECONOMIC POLICY OF THE NETHERLANDS 15
Action on the main items of the Budget (cid:9) 17
Action on the volume of liquidity (cid:9) 19
Wage and price policy (cid:9) 22
Specific measures (cid:9) 27
III. CONCLUSIONS AND RECOMMENDATIONS (cid:9) 28
STATISTICAL ANNEX (cid:9) 31
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NETHERLANDS
1. The Netherlands economy, as awhole, is developingfavour¬
ably. Internal strains dueto manpower shortages are lessening,
productivity is again growing appreciably and the expansion of
production is being sustained and may even be a little faster in
1963 than in 1962. The balance of current payments also shows
a slightsurplus, which will be maintained andmay evenincrease
in 1963. The only shadow in the picture is the recent tendency-
towards a falling off in productive investment, which never¬
theless still represents a substantial proportion of the gross
national product.
2. The phase of expansion, which began in the Netherlands at
the beginning of 1958, has been affected by two events : the
massive reduction in working hours at the beginning of 1961,
and the revaluation of the guilder in March of the same year. It
is worth trying to draw some lessons from the way in which the
Netherlands economy has reactedto these developments. More¬
over, since it is a highly outward-looking economy, economic
policy must be shaped in such a way as to achieve the internal
aims of economic progress and full employment while ensuring
that foreign payments are reasonably in balance. Since the
obstaclesto internationaltrade are being progressivelyreduced,
thus making the Member countries of the Organisation econo¬
mically more interdependent, it is worth studying the planning
and execution of Netherlands economic policy. This report will
therefore be divided into two parts : the first part will attempt
to show how the Netherlands economy has developed since 1959
and what were the major problems which the authorities have
had to solve during the last three years, while the second will
deal with the major aspects of i~.a. country1 s economic policy.
I. THE NETHERLANDS ECONOMY SINCE 1959
3. The Netherlands economy, borne along by the fast growth
in public and privateinvestment and by rising exports, recorded
a rapidly accelerating expansion in 1959 and 1960. The pro¬
duction curve levelled off sharply in 1961. Growth in 1959 and
1960 was easy because at the outset there was large unused
production capacity and becausethe large surplus onthe balance
of current payments allowed a substantial increase in imports.
In 1961, the tightening of the labour market and the reduction
of the current payments surplus to what was already regarded
as a low level broughtabout a state of tension whichjustified the
interventionof the authoritiesto reducethe pressure ofdemand :
steps had to be taken as early as April 1960 to moderate the
growth of private investment, because of the time needed for
these steps to take effect. Their effects, already being felt in
1961, were reinforced by the reduction in working hours and the
revaluation, aboutwhi_h more will be said later. Afterthe pause
in the middle of 1961, expansion again began under more bal¬
anced conditions, and since 1962, has continued without undue
tension.
The supply situation
4. In 1958 manpower reserves amounted to 2. 9 per cent of the
totalwage-earners. There was also at that time alargemeasure
of unused production capacity, investment in the Netherlands
being relatively high : gross fixed asset formation by enter¬
prises had reached more than 16 per cent of the gross national
product in 1956 and 1957, which was a European record. It is
therefore not surprising that industrial production was able to
increase by 9. 0 per cent in 1959 and 11.6 per cent in 1960, and
that the figure for all enterprises increased by 5. 4 per cent for
1959 and 10.0 per cent for 1960. This result was mainly due to
a very large increase in overall productivity of the order of 4
per cent in 1959, 8.5 per centin 1960 (output per man-year). In
1961, however, the growth in production was much slower : 2. 3
per cent for all enterprises. The gross national product showed
a slightly larger increase (2. 8 per cent), but this was mainly
the result of advance repatriation of income from abroad. In
1962, the rate of growth of domestic production recovered (3. 8
per cent) and this trend continued in 1963 (4.4 per cent). The
outlook for demand, especially consumer goods, is such that
the steady growth in industrial production recorded since the
middle of 1962 should continue in 1963.
5. The current rate of growth of production does not exhaust
existing possibilities, since production capacity, according to
the estimates of the Central Planning Bureau, should increase
by 5 per centin 1963 (compared with 4 per cent in 1962) allowing
for the foreseeable rise in productivity. Since the third quarter
of 1962 the seasonally adjusted figure of unemployed has again
begun to rise slightly. It may therefore be expected that man¬
power reserves will again reach 1.4 per cent of wage-earners
in 1963 - virtually full employment by Netherlands standards -
whereas in the last two years there has been some over¬
employment.
6. While progress in manufacturing industry appears on the
whole to be satisfactory, the trend in the building industry is
less favourable, in consequence there continues to be strong
Diagram 1
THE MOVEMENTS OF SELECTED ECONOMIC INDICATORS
IN TWO PERIODS OF EXPANSION
1952and1958= 100 1953and1958= 100
PRICES1' ANNUALPERCAPITAEARNINGS
110 130
y 1955
1955 /
/vin
120
105 1954 S
110 S 19o«
1953/
1959 V
100 loo L
1952ond1958= 100 Percent.
TOTALOUTPUTOFENTERPRISES 1942 UNEMPLOYMENTASAPERCENTAGE
(Inr.ol..,m.) OFTHEDEPENDANTLABOURFORCE
120 1956
115 \1Si V1954
2 .
110 S 1955
/
1956
1960
1 .
105 1961 1962
1953/
100 L 0 L
j Ptrcant
38
CURRENTBALANCEOFPAYMENTSSURPLUS LIOUIDITYOFTHEECONOMY2'
6 (cid:9)1953_\_ ASAPERCENTAGEOFGNP 37 "f1l9a5t3Jan>ua,ryaachyaar]
5 (cid:9)
aw1954
1959 3E
4
3 I960 35
2 34
s
1
33
I95<
0
a», 1956
32 L
- 1 1961 1962
- 2 31
-3 30 L
1. "Autonomous"increase,i.e.excludingtheeffectsofincreasesinimportprices,intaxes,subsidiesandrents(rents
aresubjecttoofficialcontrol).
2. Theratioofmoneyandquasi-moneyincirculationtoNationalIncome.
Source: CentralPlanningBureauandMinistryofEconomicAffairs.
Table 1. TRENDS IN SELECTED ECONOMIC INDICATORS
(Percentage changes compared with the previous year)
1962 1963
1959 1960 1961 EST1- FORE-
MATES CASTS
Domestic expenditure
by volume (cid:9) +6.0 +10.1 +4.4 +3.0 +4.0
Production (all enter¬
prises) (cid:9) +5.3 +10.0 +2.3 +3.5 +4.5
Industrial production
(excluding building) +9.0 +11.6 +2.8 +3.6 +4.5
Unemployment (annual
average in thou¬
sands) (cid:9) 78 49 35 33 50
Unemployment (as a
percentage of the
activewage-earning
population) (cid:9) 2.2 1.4 1.0 1.0 1.4
Wages per head paid
by enterprises .... +2.1 +9.4 +5.3 +8.0 +7.5
Productivity in enter¬
prises (per man-
year) (cid:9) +3.8 +8.1 +0.6 +2.0 +3.0
Labour costs per unit
produced by enter¬
prises (cid:9) - 1.6 +1.2 +4.7 +5.8 +4.4
Consumer prices ... +1.0 +2.2 +1.6 +2.5 +2.5
Merchandise exports
by volume (cid:9) +12.1 +14.4 +3.1 +7.0 +7.0
Current balance (bil¬
lion guilders) (cid:9) +1.8 +1.2 +0.52+0.50+0.70
Gold and foreign cur¬
rency assets (ex¬
pressed as number
of months' imports,
on 1st January) (cid:9) 4.7 4.6 4.6 3.8 3.8
SOURCES :Annualreport! oftheNetherland» Bankand Central EconomicPlant.