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Public support from the Netherlands to the financial sector

Public support from the Netherlands to the financial sector. Wiert Wiertsema, Senior Policy Advisor, Both ENDS <ww@bothends.org>. Trends in NL. Minister for Foreign Trade & Development Cooperation Aid budget cut by € 1.000.000.000 (ODA level < 0.7% GNI)

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Public support from the Netherlands to the financial sector

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  1. Public support from the Netherlands to the financial sector Wiert Wiertsema, Senior Policy Advisor, Both ENDS <ww@bothends.org>

  2. Trends in NL • Minister for Foreign Trade & Development Cooperation • Aid budget cut by € 1.000.000.000 (ODA level < 0.7% GNI) • Policy focus on International Public Goods (trade, financial system, food and water, migration, climate, security) • More aid via and for the private sector • More ODA-money for international security • Climate finance in ODA • Active efforts to dilute ODA definition at OECD-DAC

  3. Mechanisms for private sector development (PSD) - I • Agentschap.NL: • PPP-facility for Sustainable Entrepreneurship and Food Security (FDOV ) • Sustainable Water Fund (FDW) • Facility for Infrastructure Development (ORIO, annual budget: 90.000.000) • Partners for International Business (PIB, annual budget: 7.150.000) • Partners for Water (annual budget: 9.500.000) • Pilot 2g@there-OS (Ethiopia, Kenya, Uganda) • Private Sector Investment Program (PSI, annual budget: 90.000.000) • Subsidy program for demonstration projects, feasibility studies, and knowledge acquisition (annual budget: 4.000.000) • Transition facility (Colombia, South Africa, Vietnam)

  4. Mechanisms for private sector development (PSD) - II • FMO: “entrepreneurial development bank” • 51% government, 49% private banks & trade unions • Products: • Equity • Loans & garantees • Project finance • Mezzanine finance / tailor made solutions • Capital market transactions • Access to expertise, network & partnerships • Total portfolio: € 6.300.000.000 • Net profit 2012: € 146.000.000 • Government funds and programs: • MASSIF (Financial Intermediaries, € 430.000.000) • Infrastructure Development Fund (IDF, € 340.000.000) • Access to Energy Fund (AEF, € 53.000.000) • Emerging Markets Fund (FOM OS - still new - target € 40.000.000 by 2015)

  5. Mechanisms for private sector development (PSD) - III • Dutch Good Growth Fund • Revolving fund: € 750.000.000 • ODA money • Concessional trade finance • Subsidy for trade finance of (private) banks • Atradius Dutch State Business: export credit insurance • € 8.200.000.000 (2011) • More than 200 applications per year • Trade missions • Institutional investments of public pension funds: • ABP (€ 265.000.000.000) • PFZW (before PGGM, € 130.000.000.000) • Several smaller pension funds (more than € 250.000.000.000)

  6. Safeguards • OECD guidelines for MNEs • Also applicable to financial sector (since 2011) • Minority investment shares also considered ‘business relationship’ • Soft law • IFC Performance Standards • Usually used as a benchmark • Common Approaches (Atradius DSB) • considered benchmark by Agentschap.NL • FMO: • Disclosure (limited) • Anti Bribery & Corruption Statement (“zero tolerance”) • KYC & Anti Money Laundering • Exclusion list • Corporate governance policy • Human Right Policy • Environmental & Social Policy

  7. Concerns • No independent accountability mechanisms • Regular independent evaluation not taken care of • Limited political oversight • Gap between policies on paper and the reality on the ground • No guarantees that PSD benefits the poor

  8. Thank You !

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