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The Dutch Good Growth Fund: who profits from development cooperation?

Added 12 Nov 2013
Eurodad partners Both Ends, ActionAid and SOMO have launched their latest joint report, entitled “The Dutch Good Growth Fund: who profits from development cooperation?” The Dutch Good Growth Fund (DGGF) is a new fund the Dutch government is setting up to support private sector development in developing countries. The DGGF will be a 750 million euro revolving fund, which will cover 3 types of activities: 

  • Support for Dutch SMEs to invest in developing countries;
  • Support for local SMEs in developing countries; and 
  • Export finance for Dutch exporters to developing countries.
The report provides an analysis of Dutch policy and the potential impacts on individuals and companies in developing countries. A number of specific cases of Dutch aid delivery through private sector companies demonstrate the risks entailed in the new policy. For example, local communities and the environment in Suape (Brazil) are experiencing severe adverse effects from export credit support for Dutch dredging works. Inadequate government CSR policies put the responsibility for the social impacts of these activities with local parties. In addition, the analysis shows that project financing is often lacking in transparency.

The report provides a number of recommendations to parliament and the government:  

  • Fully open the DGGF to private sector companies from other countries, with a stated preference for smaller-scale companies and female entrepreneurs from low and middle-income countries;
  • Assess whether projects bring sufficient benefits for local inhabitants and genuinely contribute to development; and
  • Clear-cut CSR standards should apply and the DGGF as such should be subject to a transparency policy in line with international standards, such as those of the World Bank. 

ActionAid is an international development organization, active in over forty countries and headquartered in Johannesburg. For more information, see www.actionaid.nl 
Both ENDS is an independent non-governmental organization ( NGO) working towards a sustainable future for our planet. For more information, see www.bothends.org 
The Centre for Research on Multinational Corporations ( SOMO ) is an independent not-for -profit research and network organisation. For more information, see www.somo.nl