2008 Investors’ Agenda of Priority Points Wednesday May 14, 2008

1. 2008 Investors’ Agenda of Priority PointsWednesday May 14, 2008

2. The Netherlands is again growing faster than the Euro-area GDP growth in the Netherlands and the Euro-area, 1992-2007 5% Difference Netherlands - Euro-area 4 3 Netherlands Euro-area 2 1 0 -1 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: CPB – Centraal Economisch Plan 2006

3. 0,4 GDP growth per capita is relatively low’000 US$ GDP per capita (2005 prices, 2005 PPP US$) Growth per year 2000-2005 Situation 2005 27 UK 25 Germany 29 Belgium 26 Japan 37 US 29 Netherlands 27 Denmark France 25 Sweden 30 Finland 27 Source: EU KLEMS database; OECD; UNP

4. 1.7 Productivity growth in the Netherlands is relatively low USD/worked hour = productivity (2005 prices, 2005 PPP USD) Growth per year 2000-2005 Sweden 4.0 US 3.1 High growth Finland 2.9 UK 2.8 Japan 2.7 Netherlands 2.2 Denmark 1.8 Belgium 1.7 Low growth France 1.6 Germany 1.2 Source: EU KLEMS database; OECD; UNP

5. Foreign investors are catalysts for productivity and growth in the Dutch economy Foreign investors: ▪ Are more successful ▪ Create more employment ▪ Hire more skilled workers ▪ Outsource more locally than their Dutch counterparts. Source: Min. of Economic Affairs - Buitenlandse Investeerders zijn Groeiversnellers voor de Nederlandse Economie (July 2007)

6. Netherlands is punching above its weight…U.S. Direct Investment Position Abroad on a Historical-Cost Basis 2006, Millions of US$ United Kingdom Nether- lands Germany Ireland Switzer- land France Luxem- bourg Belgium Spain Sweden Italy 2006, as percentage of GDP 160 20 0 United Kingdom Nether- lands Germany Ireland Switzer- land France Luxem- bourg Belgium Spain Sweden Italy

7. …But it seems to lag after 2003US Direct Investment Abroad – Historical-Cost Basis Position by Host Country Index, 2003 = 100 Ireland United Kingdom Luxembourg Netherlands 100 0

8. Investors’ Agenda of Priority Points 2008 1. Reform termination laws 2. Increase participation of the Dutch workforce I Stimulate labor flexibility 3. Enhance the physical and virtual infrastructure to increase mobility and reduce congestion II Increase mobility & Reduce congestion 4. Simplify the participation exemption 5. Simplify the interest deductability rules 6. Abolish the dividend tax III Ensure consistency, predictability and simplicity in tax legislation

9. Investors’ Agenda of Priority Points 2008 1. Reform termination laws 2. Increase participation of the Dutch workforce I Stimulate labor flexibility 3. Enhance the physical and virtual infrastructure to increase mobility and reduce congestion II Increase mobility & Reduce congestion 4. Simplify the participation exemption 5. Simplify the interest deductability rules 6. Abolish the dividend tax III Ensure consistency, predictability and simplicity in tax legislation

10. 2,35 Labor regulations in the Netherlands still relatively strictLabor regulation flexibility index 2005 Denmark 7,60 USA 6,55 UK 5,02 Ireland 4,96 Sweden 3,84 Netherlands 3,68 Germany 2,35 France 2,34 Source: IMD - World Competitiveness Yearbook 2005

11. 0,4 Restricted labor regulations is Nr 1 issue in doing businessThe most problematic factors for doing business, percent of responses Restrictive labor regulations Inefficient government bureaucracy Inadequate supply of infrastructure Tax rates Inadequately educated workfoce Tax regulations Poor work ethic in national labor force Access to financing Policy instability Crime and theft Inflation Foreign currency regulations Governement instability/coups Corruption Source: World Economic Forum

12. The Netherlands is almost alone in the world in requiring third party approval (either court or CWI) for contract termination In US, UK, Ireland, Belgium, and Denmark, either party to a contract of indefinite duration may terminate the contract at any time In all of those countries, the courts are only involved if the employee claims that the employer’s action violated the law (i.e., by not paying sufficient severance pay or providing sufficient notice) The Netherlands should follow other countries – contract termination agreed between parties, according to transparent and fair rules and procedure, should be sufficient for the payment of unemployment insurance benefits Logical reform - remove the need for third party approval of contract terminations

13. Government guidance on severance payments should be set substantially lower (today: 3 months pay + 1 month pay for every year worked. Among highest in OECD) Funds saved should be diverted to employability measures: Retraining and outplacement for workers made redundant Ongoing job training to ensure lifetime employability of current workers Platforms of employer / employee cooperation, such as the O&O funds, should be deployed more proactively Logical reforms to encourage employers and employees to invest in employability

14. Investors’ Agenda of Priority Points 2008 1. Reform termination laws 2. Increase participation of the Dutch workforce I Stimulate labor flexibility 3. Enhance the physical and virtual infrastructure to increase mobility and reduce congestion II Increase mobility & Reduce congestion 4. Simplify the participation exemption 5. Simplify the interest deductability rules 6. Abolish the dividend tax III Ensure consistency, predictability and simplicity in tax legislation

15. Significant improvement in the Netherlands in Women’s Share of Labor Force… Selected years 1966-2006

16. …However majority works part-time

17. There is a strong decline in labor participation rates after age 50Labor Participation rates by age and sex 2006 Age Men Women Source: CBS

18. Most effective policy to deal with greying population and increasing labor participation rates • A gradual increase of the retirement age from 65 to 67 Other countries have adopted this measure – UK will raise its retirement age to 68 between 2024 and 2046; Germany will raise its retirement age gradually to 67 by 2029 • Increase awareness of opportunities for women

19. Investors’ Agenda of Priority Points 2008 1. Reform termination laws 2. Increase participation of the Dutch workforce I Stimulate labor flexibility 3.Enhance the physical and virtual infrastructure to increase mobility and reduce congestion II Increase mobility & Reduce congestion 4. Simplify the participation exemption 5. Simplify the interest deductability rules 6. Abolish the dividend tax III Ensure consistency, predictability and simplicity in tax legislation

20. Inadequate supply of infrastructure is Nr. 3 issue in doing businessThe most problematic factors for doing business, percent of responses Restrictive labor regulations Inefficient government bureaucracy Inadequate supply of infrastructure Tax rates Inadequately educated workfoce Tax regulations Poor work ethic in national labor force Access to financing Policy instability Crime and theft Inflation Foreign currency regulations Governement instability/coups Corruption Source: World Economic Forum

21. Road pricing should be implemented as soon as possible to decrease congestion • The Netherlands’ plans to implement nationwide road pricing by 2016 has AmCham’s full support. • Impact will be maximized by pricing on cars (85% of traffic) and not that on trucks (whose behaviour is largely price inelastic – they have no alternative). • Reconsideration should be given to freeing transportation industry from this additional burden.

22. Netherlands shows a good start in e-readiness… • Denmark, the Netherlands, Switzerland, Korea and Norway and Iceland (in that order) lead the OECD  in broadband penetration, each with over 29 subscribers per 100 inhabitants. • The Netherlands scores especially well in having created the legal environment to support e-readiness effectively. • Also government policy and vision has demonstrated commitment by facilitating technology adoption through infrastructure development and education. Source: Economist Intelligence Unit – The 2007 e-readiness rankings

23. …However keeping momentum is critical • The better the wireless and mobile communications infrastructure, the better companies and individuals can manage the physical infrastructure. • Truck routing and loading can be more optimally planned – increasing efficiency • Better communcation possibilities will stimulate more to work at home or at locations other than the central office environment

24. Investors’ Agenda of Priority Points 2008 1. Reform termination laws 2. Increase participation of the Dutch workforce I Stimulate labor flexibility 3. Enhance the physical and virtual infrastructure to increase mobility and reduce congestion II Increase mobility & Reduce congestion 4. Simplify the participation exemption 5. Simplify the interest deductability rules 6. Abolish the dividend tax III Ensure consistency, predictability and simplicity in tax legislation

25. Investors’ Agenda of Priority Points 2008 1. Reform termination laws 2. Increase participation of the Dutch workforce I Stimulate labor flexibility 3. Enhance the physical and virtual infrastructure to increase mobility and reduce congestion II Increase mobility & Reduce congestion 4. Simplify the participation exemption 5. Simplify the interest deductability rules 6. Abolish the dividend tax III Ensure consistency, predictability and simplicity in tax legislation

26. Investors’ Agenda of Priority Points 2008 1. Reform termination laws 2. Increase participation of the Dutch workforce I Stimulate labor flexibility 3. Enhance the physical and virtual infrastructure to increase mobility and reduce congestion II Increase mobility & Reduce congestion 4. Simplify the participation exemption 5. Simplify the interest deductability rules 6. Abolish the dividend tax III Ensure consistency, predictability and simplicity in tax legislation

27. Investors’ Agenda of Priority Points 2008 1. Reform termination laws 2. Increase participation of the Dutch workforce I Stimulate labor flexibility 3. Enhance the physical and virtual infrastructure to increase mobility and reduce congestion II Increase mobility & Reduce congestion 4. Simplify the participation exemption 5. Simplify the interest deductability rules 6. Abolish the dividend tax III Ensure consistency, predictability and simplicity in tax legislation

28. www.amcham.nl American Chamber of Commerce in the Netherlands ▪ A forum ▪ A voice ▪ A source of information The voice of American business in the Netherlands

29. Back-up

30. 22 Dutch GDP GrowthAnnual growth percentage, expected growth 2008 and 2009 4.35 4.00 3.84 3.5 3.31 3.0 3.04 2.25 2.26 1.7 1.75 1.5 1.26 0.20 -0.10 ‘07 ‘95 ‘96 ‘97 ‘98 ‘99 ‘01 ’02 ‘03 ’04 ‘05 ‘06 ‘00 ‘08 ‘09 Source: CPB (2005)

31. US Multinational Companies (MNCs) Facts: As of 2005 over 70% of MNCs worldwide production occurs in the United States. Of the 28% of production that occurs outside the USA, over 80% occurs in a high-income country like the Netherlands.

32. Location of Production by US Multinational Companies (MNCs) (percent) Here are the numbers: Share of worldwide MNC total Share of foreign MNC production Source: US Dept. of Commerce

33. The same study notes that more of these catalysts can be attracted by: • Continually improving the investment climate The challenge for government is similar to that of companies in a competitive environment: a systematic, sustained effort is needed to continually upgrade all the parameters that make a nation competitive.

34. Total Assets • Any owned physical object or intangible right having economic value to a firm. It typically includes items such as cash, inventories, receivables, and property, plant, and equipment. It also includes equity investments in unconsolidated domestic and foreign businesses

35. Netherlands is punching above its weight classU.S. Direct Investment Abroad, All US Foreign Affiliates, Total Assets Millions of Dollars United Kingdom Netherlands Germany France Belgium Denmark Assets

36. Share of 15-64 year olds working relatively high in the NetherlandsLabor Participation % Growth per year 1990-2000 2000-2005 70% NL 0.2 -0.2 USA -0.9 0.3 Germany 0 0.1 Finland -0.2 1.5 NL -0.3 67% Japan -1.1 B+DK+F+D 0.3 0 Denmark J+UK+US 0.1 0.2 UK S+Fi Belgium -1.1 0.7 0.2 0 Sweden 64% 0.5 France 0.4 1990 2005

37. Labor Participation Rates, by sex, 2006

38. Most participation improvement possibilities probably from the 55-64 year age group • From 1995 to 2006 the NL employment rate of those aged 55-64 increased from 28.9% to 47.7% (EU: 36% to 43.7%) • NL male labor participation (55-64) rose from 39.7% to 58% • NL female labor participation (55-64) rose from 18.3% to 37.2% • Presently only 21% of those between 60 and 65 years of age are participants in the labor force.

39. Most labor inactivity between ages 55-642006 Women Men 55-64 years 45-54 years 35-44 years 25-34 years 15-24 years Not employed/not available Employed Unemployed/available