Netherlands should pivot toward countries with growing workforces, advisory council says

The Scientific Council for Government Policy (WRR) advises that the Netherlands should prioritize countries expected to have large working-age populations in the future. “Failing to anticipate major shifts in global demographics could lead to higher product costs and make it more difficult for companies to secure materials,” the council said in a report released Wednesday.

The WRR warns that the Netherlands’ economic prosperity currently relies heavily on trade and labor migration from countries where the workforce is aging and shrinking quickly, including China and Eastern European nations. Over time, labor migration from major EU source countries will largely disappear, while global production increasingly moves to young, fast-growing countries.

If the Netherlands does not respond to this, product prices will rise, and Dutch companies will miss out on sales markets, according to the WRR. Labor shortages would also worsen, potentially making it harder to construct additional housing.

The council suggests that the Netherlands can avoid these problems by boosting trade, labor migration, and development links with countries experiencing demographic growth. In nations like India and Indonesia, and eventually in Sub-Saharan Africa, the working-age population is on the rise.

According to the WRR, the Netherlands should pursue trade agreements with those countries. The council further recommends exploring labor-migration accords with nations beyond the European Union.

According to the council, development assistance and investment should be prioritized for countries with promising demographic trends. The council further urges helping these countries make the most of their economic opportunities and, at the same time, build deeper connections with the emerging trading partners of the coming decades.