Would it not be for its dykes, two-third of The Netherlands would be underwater. Ever since the 11th century, the Dutch found ways to keep the sea out and increase arable land to provide for and protect its growing population. This protection was as strong as its weakest link and, therefore, only possible with the cooperation of all affected. This is a significant feat, only made possible with a strong determination, a precise and shared sense of direction, the ability to compromise when necessary and to cooperate even when battling conflicting interest amongst one another. Floods do not favour parties in a conflict and as such everybody has to submit himself to the overarching goal: protect the people living in potentially affected area's and keep the water out! Battling the water for over ten centuries made the Dutch masters in flood control.
Without dikes, the current land area of The Netherlands below sea level would be flooded and the land area between 0 and 7 meters, would be under serious threat of being flooded
The Dutch increasingly apply this model to solving complex issues requiring a unambiguous and shared solution between parties with conflicting interests. This article looks into the value and prosperity this approach has brought to a formally unhabitable area of land between the North Sea and the estuary of the Rhine, Meuse and Scheldt river.
When asked about the most significant challenges their country faced in June 2019 (Eurobarometer No. 91), the Dutch expressed their gravest concern about the climate crisis (51%), followed by healthcare, social security and pensions (32%). The first is certainly understandable for a country that, in large part, is below sea level with a roaring economy that performs disproportionately well. Our great prosperity and excellent well-being are currently at odds with the pursuit of climate neutrality. Our geographical vulnerability and economic drive for success are, without doubt, valid arguments for concern and explain that a majority of Dutch respondents consider this a challenge. There is also cause for concern in an objective sense. The Environmental Performance Index 2018, drawn up by Yale University and the American space organization NASA, shows that there is still much to be gained considering the Dutch' 17th place. The biggest culprits are excessive CO2 emissions and poor performance in terms of biodiversity. The fact that the Netherlands, unlike a large number of its neighbouring countries, does not generate nuclear energy or has hydroelectric power stations will certainly also play a role in the ranking.
In my opinion, we can be more proud of our health care system and the quality of our pension system. Of course, it can and must always be better, and we will have to remain critical about the sustainability of the system and the consequences of reforms. Do we have enough hands on the bed, is there enough room in the youth centre, has the bureaucracy not gone too far and how stable is my pension? These are all issues that are important and require solutions. However, the discrepancy between subjective experience and objective observation is particularly striking when comparing the Netherlands with others.
Other European countries have entirely different, much more acute, concerns at the top of their list:
unemployment (Greece, Spain, France, Italy and Croatia),
struggling to make ends meet (Bulgaria, Czech Republic, Estonia, Lithuania, Poland, Romania and Slovakia) and
health care and social security (Latvia, Hungary, Portugal, Slovenia, Finland and the United Kingdom).
Contrary to the Dutch concerns, these concerns can be substantiated with loads of facts. Is this true as well for the significant concerns about health care and the pension system with which the average Dutchman seems to be walking around? Of course, everyone knows examples of failure, sometimes even significant shortcomings. However, the question is whether these are of a structural and systematic nature. Are the Dutch so obsessed with perfection and intolerant to (possible) shortcomings that despair strikes and the costly amendments are needed if things ache a bit? It looks like it, but when comparing the Netherlands with other countries, any substance for these concerns seems lacking:
Consultation in the polder
Foreigners are often surprised by the blown-up meeting culture inextricably linked to creating support. Allowing input and hearing the arguments back and forth are more important than the conclusions from the consultation necessarily representing the majority view of the group. Understanding the arguments for a particular position, without necessarily acquiring them, is in most cases a sufficient condition for cooperation and the prevention of obstruction.
The process runs differently for major societal issues. Because social support is paramount here, a broad coalition is needed to implement the necessary change. As long as there is insufficient clarity about the possibilities and the will to reach an agreement, there will be little enthusiasm on the surface for explicitly tackling things. This is the most significant disadvantage to this decision-making model. As long as the required majorities and felt necessity are lacking; there is little enthusiasm for closing deals and putting political capital at stake. As such, there is a need for consultation in the back rooms of politics and civil society. Here positions are clarified, red lines are drawn, and openings explored. All this takes place hidden from the public eye, which irritates the media immensely.
As such 'the polder' is the enemy of media, and it is the main reason why they are so keen on declaring the 'polder' concept dead time and time again. Instead, they propagate a naive and simplistic sort of transparency. It is hard to see how this would work. I have yet to see examples of fully transparent multi-party agreements reached in our fragmented political landscape, let alone ones that could be better or more sustainable than those that come about in the back rooms. It comes as no surprise then, that the media resort to premature and out of context revelations of elements of (partial) agreements in the making. It disrupts or even torpedoes often necessary negotiations and sometimes also ends the careers of those participating. The source of these revelations usually sits at the negotiating table and more often then not has an apparent interest in involving the media. It hardly is a testament of character or strength. Whether the journalistic guild should offer itself as an outlet for these revelations is a matter of morale and taste. It seems important to me whether it serves a societal interest and improves or protects the lives of citizens against injustice or calamity.
The handling of the challenges that climate goals present to the Dutch may have the potential to serve as an example to others. The climate agreement signed in June 2019 is the first step in this direction. An essential condition is that the targets are clear and unchanged, and the focus remains on the central issues. From this point of view, the Dutch High Court 'Urgenda'-ruling is dangerous. Ironically, as a result of invoking the European human rights treaty, relatively 'clean' power stations are closed in the Netherlands triggering the need to import 'dirty' energy from other parts of Europe (mostly Eastern Europe). National environment metrics as a guiding principle result in sham solutions, undermines public support and moves our misery abroad. For the planet, the profit is zero.
Real solutions require a sense of reality, a focus on key issues, political cooperation, the involvement of socially relevant parties and, indeed, time, even if it is never in the desired quantity. Ultimately 'the polder' in a metaphorical sense is nothing more than a community of values focused on bridging opposing interests.
The designs for the Dutch healthcare and the pension system are a point in case. Without the polder, both would never have been able to function at its current (high) quality and (low) cost levels.
Healthcare
Until 2006, the Netherlands had a dual system of care. The state health insurance fund for the lowest incomes and a structure of privately insured care for everyone not being covered under the state fund. The public health insurance fund was an expensive system (between 2002 and 2005, the premiums increased by no less than 110%) and had long waiting lists. Issues such as ageing and increasing treatment opportunities due to medical innovation and better medicines threatened to make healthcare unaffordable. A complete overhaul was unavoidable. It took decades for the polder to bring together all conflicting interests and forces. Now there is a private system with compulsory primary insurance providing the same care to all, without any differentiation according to income and health risks. Insurers are obliged to offer the legally prescribed package of care provisions without prior approval (i.e. compulsory acceptance). In this way, the burden is better distributed, and those insured can switch freely from one insurer to another. It aims to promote competition amongst health insurers. Poor quality of service or care by insurers costs customers. Opinions differ as to whether this state-determined, but privately operated system of health care has already had the intended result. The fact is, however, that since 2006, when the new system was introduced, the costs of basic insurance have risen by just 0.5% above inflation level every year. The current level of premium, on average, is €1.440 a year.
Promoting a higher level of cost-awareness and increasing the overall affordability of the system, an individual deductible excess of currently € 385 was put in place in 2008. Nevertheless, it is precisely this element of the system that could use improvement. A maximum deductible per care activity (say € 150 per activity) is fairer and prevents care recipients from 'stacking' their care and postponing it to years in which they claim their deductible.
Under the current system, not only the costs and manageability of the system improved, the quality of healthcare in the Netherlands is at a very high level as well. On a European level, according to the 2018 EHCI (European Health Care Index) released by the Swedish Health Consumer Powerhouse, The Netherlands is only outperformed by Switzerland. If the Netherlands wants to regain first place in this ranking list, access to youth psychiatry must be substantially improved and the number of suicides (certainly that of ex-patients in the year after leaving psychiatric institutions) must go down sharply. It is worth noting, however, that the costs incurred by the Swiss to maintain their healthcare system, are significantly higher than those in the Netherlands.
The influence of the polder is particularly evident in the favourable ratio between quality and costs. It offers no room for dogmas, hobbyhorses and presents at the negotiating table. Other than what you might expect, it is precisely the confrontation between the different points of view that acts as the engine for optimum results.
Pensions
The past year was the year of the pension agreement. There were serious doubts as to whether the Dutch pension system would be financially and socially sustainable in the long term. Increasing life expectancy, flexibility in labour relations, a low actuarial interest rate and pressure on solidarity between generations (younger generations contributed disproportionately to the retirement of older generations) require other solutions. It is impossible to continue in the same way and will also undermine the long-term sustainability of the current system. At the same time, change also fuels unrest and erodes public confidence in the entire system as such. It sums up the dilemma that confronts the polder for some time now, to which the pension agreement is the provisional answer. The translation of the agreement into legislation takes time, and there also is still a gap of € 60 billion between plan and realization due to the change in the financing method for pensions to close. Current employees between 40 and 50 years old will be disadvantaged by the abolition of the current average premium system (each participant in the pension fund accrues the same rights), and this requires compensation. The situation differs between pension funds. Disparities in the demographic composition and size of the group of participants, as well as available fund-reseves, require an individual approach. It is clear, however, that within the current scope of the collective reserves of pension funds (this amounts to € 1,566 billion as of 30 September 2019!) there is sufficient room to facilitate this compensation during the coming ten years.
In the new system, the funding takes place regardless of the age of the participants and, where possible and desirable, is labour contract-neutral. The premium will be tax deductible up to a certain level. The premium build-up is mostly individualized so that changes in employer and the nature of the contract (fixed, flexible, self-employed) only have a limited influence on the outcome. Based on the premium contribution, an unguaranteed pension entitlement is purchased annually. Its actual value at retirement date is ultimately dependent on the result of the investment policy pursued during the build-up phase.
Here as well the polder has done its work. The Netherlands already has one of the most robust pension systems in the world (Mercer Global Pension Index 2019). Once implemented, the new pension system will facilitate all forms of employment, is more personal and transparent and guarantees its affordability and feasibility in the long term.
Given the increasing ageing of the population, the retirement age must go up. Without, it would be impossible to economically build a solid foundation for the continuing prosperity of the participating retirees. For this reason, the pension agreement also contains measures to facilitate desired sustainable employability. For the most part, the pension agreement still needs to be translated into legislation, and this will take place in the course of 2020/1 after additional investigations. Changes to eligibility to the state pension (AOW) have already been implemented. The regulatory framework must prevent an excessive gap between expectation and realization. Because of the structure of implementation, where everyone's interests are safeguarded as best as possible (employees, employers and self-employed people work together to oversee the professional operation of the pension funds), I expect that to work out well.
Only in comparing the Dutch pension framework with those in other countries, the power of the polder really comes to light. Together with other countries with consensus-based systems, such as Denmark and (to a lesser extent) Iceland, it is lonely in terms of the level of pensions combined with the size of the reserves to cover them.
Here, too, it appears that quality and a sense of reality go hand in hand in the polder and that an economically responsible pension system combines well with above-average facilities.
Finally
The polder is often declared dead, but in reality, it is the driving force behind the Dutch prosperity and well-being. Paraphrasing H. Marsman's (1899-1940) poem "Memory of Holland", the following imposes itself on me:
As far as I'm concerned, the polder is not dead: it lives and works really well!
This is an English version of an article written in Dutch, published on December 31, 2019 and translated using Google Translate and edited with Grammarly