Oecd Economic Surveys : Netherlands 1992-1993.

122 Pages·6.995 MB·English

by  OECD

OECD
URVEY:
NETHERLANDS
OECD
OCPE
1993
ECONOMIC
SURVEYS
I
NETHERLANDS
ORGANISATIONFORECONOMICCO-OPERATIONANDDEVELOPMENT
ORGANISATION FOR ECONOMIC
CO-OPERATION AND DEVELOPMENT
Pursuant to Article 1 ofthe Convention signed in Paris on 14th
December 1960, and which came into force on 30th September 1961,
the Organisation for Economic Co-operation and Development
(OECD)shallpromotepoliciesdesigned:
to achieve the highest sustainable economic growth and
employment and a rising standard of living in Member
countries, whilemaintainingfinancial stability, and thus to
contributetothedevelopmentoftheworldeconomy;
to contribute to sound economic expansion in Member as
well as non-member countries in the process ofeconomic
development; and
to contribute to the expansion of world trade on a
multilateral, non-discriminatory basis in accordance with
international obligations.
The original Member countries of the OECD are Austria,
Belgium, Canada, Denmark, France, Germany, Greece, Iceland,
Ireland,Italy, Luxembourg,theNetherlands,Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, the United Kingdom and the United
States. The following countries became Members subsequently
through accession at the dates indicated hereafter: Japan (28th April
1964), Finland (28th January 1969), Australia (7th June 1971) and
New Zealand (29th May 1973). The Commission of the European
Communities takes part in the work ofthe OECD (Article 13 of the
OECDConvention).
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©OECD 1993
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Table of contents
Introduction 9
I. Recent trends and prospects: a moderate cyclical downturn 11
Demand and output ] ]
The labour market 17
Costs and prices 25
International competitiveness, foreign trade and the balance of
payments 29
Short-term prospects 32
II. Economic policies: costs and rewards of rigour 35
Monetary policy 36
Fiscal policy 41
Wage moderation 48
Labour-market policy 49
Other structural policies 55
III. Competition and competition policy: the unusual Dutch case 57
Competition policy and restrictions on competition . 58
Competition in public sector activities 64
An assessment of the intensity of competition 67
IV. Conclusions 81
Notes and references 88
Annex
I. Calendar of Main Economic Events 94
Statistical annex 99
Tables
Text
1. Demand and output: recent trends and projections 13
2. Employment, unemployment and working age population 23
3. Costs, prices and profitability 26
4. The current account 31
5. Most important tax measures in 1992 and 1993 43
6. Fiscal consolidation beyond 1994: different scenarios 45
7. Restrictive agreements in the Cartel Register 60
8. Comparative price levels in the construction sector, 1990 69
9. Production growth in the service sector: an international
comparison 74
10. Entry and exit rates in manufacturing: an international comparison 75
1 1. Concentration in manufacturing: an international comparison 79
12. The world's 500 largest industrial corporations by country 80
Statistical annex
Selected background statistics 100
A. National product and expenditure 101
B. Origin of net domestic product at factor cost 102
C. Income and expenditure of households and private non-profit
institutions 103
D. Industrial production and productivity 104
E. Money and banking 105
F. Merchandise trade 106
G. Public sector 107
H. Structure of output and performance indicators ]08
1. Labour market indicators 110
J. Financial markets 112
Diagrams
Text
1. Macroeconomic performance indicators 12
2. Private fixed investment 15
3. Conjunctural indicators 16
4. Participation rates of older male workers 19
5. Overview of the labour market 20
6. The Beveridge curve 22
7. Labour force participation rate: an international comparison 24
8. Share of part-time work in total employment 24
9. Consumer price developments 27
10. Contribution to the private consumption deflator 28
11. Competitiveness and trade 30
12. The guilder and the DM in the EMS narrow band 36
13. Interest rates and exchange rates 37
14. Interest differentials with Germany 39
15. Ratio of gross public debt to GDP 46
16. General-government transfers to households 47
17. Relative price levels in 1990 between the Netherlands and the EC 68
18. Private goods consumption expenditure: composition by supplying
sectors 70
19. Outlet density in selected OECD countries 72
20. Real incomes and relative prices 76
21. Net capital income share 78
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BASICSTATISTICS OFTHENETHERLANDS
THELAND
Area,1992(1000sq.km) 41.5 Majorcities,1stJanuary1992(thousand
Agriculturalarea(asapercentageoftotal) 64.2 inhabitants):
Forest(asapercentageoftotal) 8.0 Amsterdam 713
Rotterdam 590
TheHague 445
THEPEOPLE
Population,1992(thousands) 15 129 Employment,1991 (thousandman-years):
Numberofinhabitantspersq.km 446 Total 5271
Netnaturalincrease,1991 (thousands) 69 Agriculture,fishing 257
Industry 1368
Otheractivities 3646
PRODUCTION
Grossdomesticproduct,1991 Originofnetdomesticproduct
(billionguilders) 543.6 atfactorcost,1991 (percent):
GDPperhead(US$), 1991 19213 Agriculture 4.0
Grossfixedinvestment: Industry 23.3
PercentofGDP,1991 20.8 Construction 6.3
Perhead(US$), 1991 3994 Other 66.4
IEPUBLICSECTOR
Publicconsumption,1991 (% ofGDP) 14.3 CompositionofParliament(No.ofseats):
Currentreceipts,1991 Christian-democrats 54
(%ofGDP) 46.5 Social-democrats 49
Currentdisbursement,1991 Liberals(right) 22
(%ofGDP) 51.0 Liberals(left) 12
Green(left) 6
Other 7
Total 150
Lastgeneralelection:September1989
FOREIGNTRADE
Exportsofgoodsandservices,1991 Importsofgoodsandservices, 1991
(%ofGDP) 54.1 (% GDP) 48.9
Mainexports,1991 Mainimports,1991
(% oftotalmerchandiseexports): (% oftotalmerchandiseimports):
Food 17.3 Food,beveragesandtobacco 11.7
Energy 9.7 Energy 8.6
Chemicals 16.1 Manufacturedgoodsexceptmetal 9.4
Metals 6.6 Machineryandelectricalequipment 22.6
Machineryandtransportequipment 23.5 Transportequipment 9.2
HECURRENCY
Monetaryunit:Guilder CurrencyunitsperUS$,
averageofdailyfigures:
Year1992 1.76
February1993 1.85
Note: Aninternationalcomparisonofcertainbasicstatisticsisgiveninanannextable.
This Survey is based on the Secretariat's study
preparedfor the annual review ofthe Netherlands by the
Economic and Development Review Committee on 22nd
February 1993.
m
After revisions in the light ofdiscussions during the
review, final approval ofthe Surveyforpublication was
givenbythe Committeeon22ndMarch 1993.
The previous Survey ofthe Netherlands was issued in
December1991.
Introduction
The Dutch economy, which expanded rapidly at the end of the 1980s, has
slowed down, like virtually all other European economies. While this cyclical
developmenthas been morepronounced than expected atthe time ofthe previous
EDRC review of the Netherlands, it has nonetheless been relatively muted, and
has not been accompanied by widespread and acute tensions: inflation, after
increasing in 1991 largely as a result of indirect taxes and user fees needed to
correct structural budget imbalances and reduce subsidies, has already deceler¬
ated and there has been no wage-price spiral. The cunrent-account surplus has
remained large and the guilder has been strong in exchange markets. Until
recently, labour-market conditions had been affected relatively little by the slow¬
down, but the labour market remains one of the weak points of the Dutch
economy, with a high degree of underemployment. While economic growth is
expected to slow again this year, it should nonetheless remain close to the EC
average, and a rebound is projected in 1994, following a marked decline in
interestrates and the international recovery. Inflation is likely to abate furtheras a
result ofthe new central agreement on wage moderation and the recent effective
appreciation of the guilder.
The soundness of Dutch economic policy - characterised by a strong
medium-term orientation centred around a close link between the guilder and the
Deutschemark and fiscal consolidation - was underscored during the recent
period of exchange rate turbulence, when the market never questioned the guil-
der-DM relationship and long-term interest differentials with Germany remained
by farthe narrowest ofany EMS country. But in the currentenvironmentofslow
growth the pursuit ofstrict policies proves increasingly demanding. Interest rates
are projected to fall markedly over the next year or so, but broadly in line with
German rates. On the fiscal side, additional restrictive measures had to be taken
late last year, to seek to ensure that, despite the worse than expected economic