The international orientation of the Netherlands and its geographical position at a crucial hub of Europe’s transportation system has influenced its economy to become open to global foreign trade. While consisting of just a little over 4% of the total EU population, the Netherlands accounts for 9% of total EU exports. In addition, both exports and imports of goods and services account for more than 60% of GDP.

The GDP composition by sector is: agriculture 2%, industry 26% and services 72%. The small but highly efficient agricultural sector is the basis for the food-processing and packaging industry and has led to the Netherlands leading position in the horticulture products world market as well as being a major exporter of meat and dairy products. Manufacturing industry has declined but still accounts for approximately 60% of total exports and consists of practically every high tech field from specialized steel products to advanced production machinery. Although there is no concentration of heavy industry, chemicals, electronics and machinery as well as food processing are important components as well. Trade, transport, financial, public and private services make up the service industry which is supported by a large international banking and insurance industry.

The openness of the Dutch economy is reflected in the Dutch multinational companies that are active in the global market as well as the number of foreign companies that have been attracted to the Netherlands. Major Dutch companies such as Akzo, Philips, Shell, Unilever, ABN-AMRO have extended their activities beyond the country’s borders. Investment initiatives have drawn foreign companies to the Netherlands which include Esso, Rank Xerox, Thorn EMI, Polaroid, Dow Chemical.

Competitiveness

According to the Economist Intelligence Unit (source: EIU Country Forecast February 2002), which publishes a global ranking model measuring the quality of the business environment in 58 countries, the Netherlands is expected to be the best place to conduct business during the next five years (2002-2006) . The country benefits from its very stable political environment, strong macro economic fundamentals, sound regulatory framework and close trading relationships with its regional neighbours.