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Policy coherence: Still not a central part of the 2022 state budget

Last Tuesday was Budget Day, the day when the Cabinet traditionally presents the budget for the next year. Due to its caretaker status, the Cabinet was forced to present a policy-poor budget. This was not only reflected in the speech from the throne full of hollow words, but also reflected in the budget for Foreign Trade and Development Cooperation (BHOS), where the 0.7% norm, the spending of 0.7% of GNI on development cooperation, is once again not met and remains stuck at 0.53%.

The Ministry of BHOS is not the only ministry where there is still much progress to be made when it comes to improving our international impact. Because the 99.47% of government spending that does not go to development cooperation does impact developing countries. The spearhead of policy coherence for development is that policies complement, rather than counteract, development cooperation efforts. Unfortunately, the latter still happens far too often. A good example of this is how on the one hand we invest in the economic development of low-income countries, but on the other hand we facilitate companies to avoid taxes, often right in these countries. Thus, on the bottom line, our overall policy does not yield a profit at all, but rather a loss.

The impact of policies on food security, water and climate in developing countries

Fortunately, policy coherence is mentioned in the BHOS budget. Money is allocated for a study by the Inspectorate for Development Cooperation and Policy Evaluation (IOB) on the effects of policies on food security, water and climate in developing countries. We are glad to see that the Ministry of Foreign Affairs takes policy coherence seriously. Yet we would actually like to see policy coherence featured more prominently in the budgets of other ministries with an international economic or environmental footprint. For instance, at the Ministries of Agriculture, Nature and Food Quality, Economic Affairs and Climate Change, Justice and Security, Finance and Infrastructure and Water Management, several decisions are made that directly touch on BHOS policy. Consider the discussions being held by the Ministry of Finance on a global tax treaty: if we ensure that companies pay the same amount of tax all over the world, thus preventing companies from seeing the Netherlands as a tax haven, we ensure that we no longer take with one hand, what was given by the other.  

Another important example is climate finance. Although this government is allocating billions for climate finance at home, international climate finance lags far behind. That, while Dutch consumption consumes three times our own land area, (see SDG Spotlight). So we are actively contributing to the negative effects of climate change, even beyond our own borders. The meagre money we release to combat the effects of climate change abroad is then not nearly enough to mitigate the suffering we create ourselves. 

Make coherence a focal point

Therefore, our call to all politicians is: make policy coherence a spearhead. This can be done during the formation by formulating a concrete strategy on promoting policy coherence (e.g. using the SDGs). A coalition agreement is still some time away, but in the coming period the Lower House will discuss the various budgets for 2022. It is time that the effects on developing countries are given a more prominent role in this. Make sure that money for development cooperation really becomes an addition again, instead of a band-aid on a self-created wound.