Contemporary Dutch Foreign Policy in Practice
An Analysis of Dutch Foreign Policy in Mozambique
Karel May
Studentnumber 0377651
University of Amsterdam Master Political Science
Research Project
Global Environmental Governance and Politics in Theory and Practice
Supervisor Dr. R.J. Pistorius
Second Reader Dr. I. Verhoeven
Date 30-01-2015
TABLE OF CONTENTS
Acknowledgements 2
List of Abbreviations 3
List of Figures 4
1 Introduction
1.1. Reinventing Dutch foreign policy 5
1.2. Aspects of foreign policy: moral obligation 6 1.3. Aspects of foreign policy: economic self-interest 7
1.4. Research question 7
1.5. Revised Dutch development policy 8
1.6. Motivation and relevance 12
1.7. Outlook: the argument 13
1.8. Methodology: case study on Dutch foreign policy in Mozambique 15
1.9. Theoretical framework 15
1.10. Structure of the thesis 16
2 International Relations and Access to Natural Resources
2.1. Introduction 17
2.2. The role of natural resources in contemporary IR 18 2.3. The global scramble for natural resources 21 2.4. Developed countries’ resource policies in Africa 23 2.5. Institutional reactions to regulate the energy sector 25
2.6. Conclusion 26
3 Dutch Foreign and Energy Policy
3.1. Introduction 29
3.2. Recent history Dutch foreign and energy policy 30
3.3. EU energy policy 35
3.4. Energy supply security from a Dutch perspective 37
3.5. Conclusion 40
4 Dutch Foreign Policy in Mozambique
4.1. Introduction 41
4.2. Recent history and country analysis of Mozambique 42
4.3. Natural gas discoveries in Mozambique 44
4.4. Main actors related to the Mozambican energy sector 45 4.5. Dutch foreign policy design for Mozambique 46
4.6. Conclusion 51
5 Conclusion
5.1. Research question 53
5.2. Discussion 56
Acknowledgements
The thesis you are about to read is written as the final assignment for the master political science at the University of Amsterdam. I decided to write the thesis about foreign policy after I discovered out how fascinating and complicated foreign policy can be.
An internship at the Dutch Ministry of Foreign Affairs in 2012 during my undergraduate study political science gave me first hand experience with the implementation of Dutch foreign policy. It gave me an insight in the strategic aspects and trade-offs related to several policy approaches.
I am grateful to be able to study political science at the University of Amsterdam. Often I was asked how it felt to pursue a second university degree. I described the journey with steep learning curves as an ‘academic rollercoaster’ in which you get tested, continuously thrown out of your comfort zone and are confronted with your own and other, often challenging, perspectives. In hindsight, I can say I enjoyed it and learned a lot while going through this process. However, I couldn’t have done it alone.
First, I would like to thank my supervisor Robin Pistorius for his support and his patience during the writing process. I also would like to thank Dr.Verhoeven for the classes in the first semester and for being the second reader. The writing process hasn’t been easy for me. Because of lovely friends and my family I was able to persist. My last thanks goes out to the helpful staff working at the university’s excellent library. It is the library which I will remember as the place where I completed most of the research and I did most of the writing this past academic year. Hopefully you will enjoy reading this thesis.
List of Abbreviations
IR International Relations
DC Development Cooperation
EU European Union
OECD Organization for Economic Cooperation and Development
UN United Nations
OPEC Organization of Petroleum Exporting Countries
IEA International Energy Agency
ODA Official Development Assistance
SME Small and Medium Enterprise
INP National Petroleum Institute
HDI Human Development Index
GECF Gas Exporting Countries Forum IPGs International Public Goods
MDGs Millennium Development Goals
GoM Government of Mozambique
IMF International Monetary Fund
List of Figures
Figure 1 Ministry of Foreign Affairs, 2013 A World to Gain
Figure 2 Dutch Natural Gas Consumption and Production Scenarios Figure 3 Rovuma Basin in Mozambique
Figure 4 Proven Natural Gas Reserves in Tcf as of 31/12/2011 Figure 5 Ministry of Foreign Affairs, 2013 A World to Gain Figure 6 The Netherlands Ministry of Foreign Affairs 2013
Sources:
1. Ministry of Foreign Affairs, 2013 through: http://www.government.nl/documents- and-publications/letters/2013/04/05/global-dividends-a-new-agenda-for-aid-trade-and-investment.html
2. EBN. Focus on Dutch Oil & Gas 2014
3. 2B1st Consulting: http://www.2b1stconsulting.com/mozambique-gas-to-liquid-projects-to-queue-behind-lng-plants/
4. OPEC-CIA Factbook and SPTEC Advisory estimates
5. Ministry of Foreign Affairs, 2013 through: http://www.government.nl/documents- and-publications/letters/2013/04/05/global-dividends-a-new-agenda-for-aid-trade-and-investment.html
6. The Netherlands Ministry of Foreign Affairs 2013: Multi-Annual Strategic Plan Mozambique 2014-2017
Introduction
1.1. Reinventing Dutch foreign policy
The Netherlands, despite its small size an economically important actor in the world faces important choices regarding its foreign policy. Few other countries are as closely interwoven politically, economically and socially with the world. This fact makes Dutch foreign policy a strategic affair. (WRR 2010: 15) A significant amount of the Dutch national income depends on international trade or other sectors involved with international actors. For example, the Central Bureau of Statistics reported that in 2013 the Netherlands was one of the biggest exporting countries in the EU1. Only Germany’s total value of exports in that year surpassed the exports of the Netherlands. Dutch foreign policy can be considered as a balancing act in which international relations need to be maintained while Dutch interests need to be pursued. Dutch foreign policy also needs to be able to anticipate on the latest developments in today’s rapidly changing world. Designing effective policy can include trade-offs related to conflicting interests or conflicting policy objectives when a specific country or region is affected by a certain policy.
An aspect of foreign policy in which complicated trade-offs often occur is Development Cooperation (hereafter DC). It is, however, an important part of Dutch foreign policy. In the Netherlands DC is a contested aspect of its foreign policy and is often discussed in the political arena and in the media. The effectivity and politics behind foreign aid have been highly debated over, like in the wider international community. The nature and purpose of foreign aid have been subject to controversy in political and scholarly circles from the start (Van Dam and Van Dis 2014: 1636). In the Netherlands, it is the metaphor of the merchant and the clergyman as archetypical figures used shaping Dutch development policy. Through these images the suggestion of an opposition between moral and amoral motives in the history of development has gained a strong foothold within the interplay of scholars, policy makers and public opinion (Van Dam and Van Dis 2014: 1636). The moral motives can include a country’s moral obligation to engage in initiatives aimed at poverty reduction or improving living conditions. Pursuing (economic) self-interest can be considered as an amoral motive.
1 Data can be accessed here:
http://www.cbs.nl/nl- NL/menu/themas/dossiers/globalisering/publicaties/artikelen/archief/2014/2014-nederland-exportland-im-art.htm
This thesis analyzes the Dutch Government’s efforts in a policy situation in which both motives need to be combined. It examines the recently revised Dutch foreign policy strategy by analyzing its, both general and country specific, policy design. The policy strategy combines pursuing economic self-interest and a commitment to contribute to aid.
This thesis will look at contemporary Dutch foreign policy to examine how the two categories of motives are combined in the current context involving Dutch energy supply security as part of the broader economic self-interest. National political developments will be examined and the particular foreign policy initiative in practice. It will be analyzed through a case study set in Mozambique. The following paragraph elaborates on what moral obligation and economic self-interest entail in the situation of the Netherlands.
1.2. Aspects of Dutch foreign policy: moral obligation
It can be seen as a moral obligation to contribute to international development and poverty reduction. One international agreement the Netherlands has signed in light of this objective is reaching the official development assistance (hereafter ODA) international target2, currently at 0.7% of the national income. This target has been set and was first agreed on in 1970 by the organization for economic co-operation and development (hereafter OECD). Another initiative is the Millennium Development Goals (MDGs). Meeting the targets of these international initiatives improves the Netherlands’ international reputation and foreign relations with the recipient countries.
Official advice and recommendations on policy change have led to a change in the approach of Dutch foreign policy and DC. The Dutch Ministry of Foreign Affairs states how in reaction to the continuously changing geopolitical landscape priorities need to be adapted and reinvented. In its revised policy, it attempts to combine development and poverty reduction at the same time. In the field of aid and trade, three types of bilateral relationship are identified with a number of selected countries, within which a continued focus will mainly be on the current partner countries (aid) and focus countries (trade) (MinBuza 2014: 20). In the Dutch’ new approach a
2 Detailed information on the target and its history can be found through:
transition is initiated in which eventually countries can be considered partner countries to trade with rather than the recipient countries of development aid.
1.3. Aspects of Dutch foreign policy: economic self-interest
Economic self-interest entails more than the activities directly linked to maximizing a country’s national income. For example, international reputation and relations with countries bilaterally or multilaterally influence trade flows. Another interest linked to economic self-interest is energy supply security, in this thesis defined as a reliable and adequate supply of energy for a reasonable price (Haighighi 2006: 11-13). Energy supply security is currently gaining importance in foreign policy and is increasingly considered a national priority directly linked to a country’s economic performance. It will determine the price natural resources can be obtained at and can secure the supply of energy. Adequate supply of energy prevents disruptions in business processes.
In this thesis energy supply security is selected to be examined as part of the broader self-interest because it is increasingly important for the Netherlands. Several trends indicate this shift on which will elaborated on in the next chapter. The next paragraph will introduce this thesis’ main research question.
1.4. Research Question
In light of the changes new development policy agenda, the aim of this thesis is to explain the choices made in the policy design. The research attempts to clarify how the policy was created in the current international political context by analyzing the wider geopolitical developments. It identifies the role economic self-interest plays in the design of contemporary Dutch foreign policy.
This thesis analyzes the role national self-interest plays in contemporary Dutch foreign policy. Since the national self-interest is a broad term and can be linked to a number of policy objectives, the focus will be on direct economic self-interest and energy supply security. Thus, it specifically looks at Dutch foreign policy related to pursuing economic self-interest and securing access to crucial natural resources. A recently revised Dutch development agenda offers a new policy approach in which aid and trade aspects are combined. In light of the new approach, this thesis will attempt to explain contemporary Dutch foreign policy initiatives in Mozambique. It will
explain the revised policy approach by examining relevant wider geopolitical developments affecting the Netherlands.
The following main research question is posed:
‘which geopolitical developments explain contemporary Dutch foreign policy in Mozambique?’
The thesis starts out by describing the wider trend of industrialized countries investing in Africa as seen through the theoretical approaches described in the theoretical framework. An analysis of latest trends in Dutch foreign policy and the current Dutch energy security situation is next. After that a case study is used in which both natural resources and DC as part of foreign policy play an important role. The case study is set in Mozambique where recent natural gas discoveries have brought international attention to the country.
In order to answer the main research question of this thesis, the following three sub questions are formulated:
1 what are the wider geopolitical developments relevant to the role natural resources play in contemporary IR? (Chapter 2)
2 which political developments are relevant to Dutch foreign policy with regards to Dutch energy security? (Chapter 3)
3 which information can be found on the context and contents of contemporary Dutch foreign policy in Mozambique? (Chapter 4)
The answers to the sub questions will be formulated in the second, third and fourth chapters in the form of sub conclusions at the end of each chapter. The fifth chapter will review the theory used to answer the sub questions and will then formulate an answer to the main research question by combining the findings from the sub questions.
1.5. Revised Dutch development policy
require a revised foreign policy in order for the Dutch Government to anticipate on the current rapidly changing international context. The Dutch Ministry of Foreign Affairs states it is time for a new aid, trade and investment agenda with three important aims. First, to eradicate extreme poverty in a single generation; second, sustainable, inclusive growth all over the world; and third, success for Dutch companies abroad. (MinBuZa 2013: 6) Funding for the new approach will originate from an integrated budget for foreign trade and development cooperation.
In November 2012, the new structure of the Ministry of Foreign Affairs was presented3. The Ministry of Foreign Affairs was now headed by 2 ministers. One Minister, the Minister of Foreign Affairs, is responsible for general management and The Netherlands foreign policy. The second Minister of Foreign Trade and Development Cooperation is responsible for those particular aspects of Dutch foreign policy. This was the first time foreign trade and development cooperation were officially combined in a minister’s post. With the new structure, also a new approach towards foreign policy and development cooperation was developed.
The 2013 Ministry of Foreign Affairs report ‘A World to Gain’, a new agenda for aid, trade and investment, lays out the renewed development policy agenda4. Advice of institutes such as the Clingendael Netherlands Institute of International Relations and the WRR has been taken into consideration when the renewed foreign policy strategy was put together. In the report, a number of trends are described which change the position the Netherlands has on the global stage. It mentions the rise of new state and private actors and new approaches towards development cooperation including initiatives aimed at accessing natural resources. In the field of aid and trade, three types of bilateral relationship are identified, within which a continued focus will mainly be on the current partner countries (aid) and focus countries (trade). It states how dialogue takes place with the donor countries and what the relationship should entail.
In general, the 2013 state report distinguishes three types of bilateral relationships: aid, transitional and trade relations. An important aspect of the report is the emphasis on the transition from aid to trade as clarified several times in the report
3 A complete organization chart can be found online through the following link:
http://www.rijksoverheid.nl/ministeries/bz/organisatie/organogram
4 The complete state report can be found online through:
http://www.government.nl/issues/development-cooperation/documents-and-publications/reports/2013/04/30/a-world-to-gain.html
and reflects the proposed increasingly closer connection between foreign trade and development cooperation5. Regarding International Public Goods, they play a major
role in every part of the policy.
Part of the information on the country selection is mentioned here to illustrate how the divide is made in the revised policy:
1. Aid relationships
Here, the focus is on countries that are unable to solve their poverty problems
singlehandedly. This category includes conflict-affected and post-conflict countries, fragile states and countries with insufficient capacity to reduce poverty effectively without assistance. The countries in this category are Afghanistan, Burundi, Mali, the Palestinian Territories, Rwanda, South Sudan and Yemen. (MinBuza 2013: 6)
2. Transitional relationships
Here, the focus is mainly on low- and middle-income countries with burgeoning economies. In a transitional relationship, a combination of aid and trade can benefit both the developing country and the Netherlands. Apart from poverty reduction programmes relating to the four priorities, we will also support these countries in increasing their market access and improving their business climate. We will adopt this strategy in Bangladesh, Benin, Ethiopia, Ghana, Indonesia, Kenya, Mozambique and Uganda. (MinBuza 2013: 7)
3. Trade relationships
Here, our main aim is to promote trade and investment, with activities that contribute to economic growth and employment in the Netherlands. The focus is on Australia, Belgium, Brazil, Canada, China, Colombia, France, Germany, the Gulf States, India, Iraq, Japan, Malaysia, Mexico, Nigeria, Poland, Romania, Russia, Singapore, South Africa, South Korea, Turkey, the UK, Ukraine, the US and Vietnam. (MinBuza 2013: 6)
5
Figure 1.
Figure 1 shows the transition as suggested in the foreign policy documents. The transition does not mean that aid will become unnecessary (MinBuza 2013: 29). The document states the Dutch Government continues to be committed to inclusive growth and may also trade with and invest in countries with which our relationship is primarily based on aid. In other words, there are no watertight divisions between the three elements of policy (MinBuza 2013: 29). This model will be applied to the Mozambican case study in Chapter four to identify the aid and trade aspects of the policy.
The revised state policy documents outline how international public goods (hereafter IPGs) play a major role in Dutch development cooperation policy. The Netherlands wants to achieve results on the following IPGs: trade, security, migration, water, climate, food security, raw materials and energy6. The new approach towards DC as part of Dutch foreign policy followed the in 2011 released government report on the modernization of Dutch diplomacy. It states that the (broad) Dutch national interest needs to be central in future Dutch foreign policy (MinBuza 2011: 5). The document identifies as main priorities advancing economic interests (wealth), peace and stability. Securing strategic goods (energy, raw materials) and international law
6 Detailed information on IPGs in Dutch development cooperation policy can be
found here: http://www.government.nl/issues/development-cooperation/international-public-goods
will always serve one or all of these priorities since the high level of cohesion between the themes and the priorities mentioned. This should count for both bilateral and multilateral relations. DC initiatives will be, more than before, approached from this integrated vision. (MinBuza 2011: 5).
As decided by the cabinet, the ODA budget will be reduced with an amount of 1 billion Euros over the coming four years (MinBuZa 2014: 6). A reduction in number of partner countries and spearheads will ensure an enhanced focus on the DC activities.
The countries, a number of fragile states, have been specifically selected with the objective of advancing of safety and stability in the world. The spearheads water and food security have been selected because of the Dutch top sectors (MinBuza 2011: 6). During the selection process of the countries, the criteria of chances and opportunities (sometimes also in the long term) for the Dutch private sector has been taken into account. In this way the Dutch private sector will benefit from the DC investments. DC will shift from aid to investment and will be integrated with other forms of foreign policy in order to serve global and broader national interests. A 2010 state report proposes a new approach to DC by envisioning it as a combination of realism about current issues and optimism about the future (MinBuza 2010: 1).
1.6. Motivation and relevance
After working in South-East Asia for two years, I became interested in the difference between developed and developing countries. My curiosity turned into a fascination for the politics and policy related to development. Studying political science enabled me to explore the dynamics of the relationship and gap between developed and developing countries and the current trends related to it. During the first year of my undergraduate study political science, I specifically became interested in the strategic thinking behind efforts made to improve the economic situation of developing countries. Efforts in this context can be related to particular political motives or the kinds of aid given or the selection procedure to determine recipient countries. Fortunately, much is written on the complexity and effectivity of official DC and other forms of foreign aid. The cases in which tensions rise between contrasting interests as the ones mentioned in this chapter’s first paragraph attracted my interest. Initial research led me to the interesting and complicated case of Mozambique.
The Mozambican case study is a situation where an interaction can be seen between the actors from the developing and developed world. The enormous recently discovered gas reserves invite both private and state actors from all over the world to join the game for the resources. How this game will be played out will determine Mozambique’s future and possibly improve the lives of its population. Reading initial information about the situation in Mozambique inspired me to explore further and eventually write this thesis.
Relevance
First, this thesis aims to analyze Dutch foreign policy in order to contribute to a better understanding of foreign policy and its implementation in developing countries. As foreign policy is gaining importance in today’s world, insights in foreign policy can contribute to knowledge about designing more effective policy. As Keohane argues, better understanding of policy should enable people to design better policies and institutions, although it is no guarantee of such improvements (Keohane 2002: 18).
Secondly, the findings contribute to the debate on environmental governance since the Mozambican political context and recent gas discoveries influence the Dutch’ policy design and its implementation. The findings should raise questions about the role of highly industrialized state actors and Multi National Corporations currently play in a natural resource rich country as Mozambique. Questions related to this issue can address measures or approaches to deal with similar situations. Third, the findings of this thesis are related to the wider debate on the nature of international cooperation in today’s world. This thesis aims to highlight a shift in Dutch foreign policy. In the wider debate of international cooperation questions are raised which address the emergence of a zero-sum world, as Rachman argued. Rachman states a ‘rise of zero-sum logic’ has become more visible in international politics (Rachman 2010: 1). If this is the case, what are the consequences for global governance and how should state actors anticipate on this particular logic?
1.7. Outlook: the argument
This thesis examines which role self-interest plays in contemporary Dutch foreign policy. Specifically it will look at the trade-offs made in Dutch foreign policy design which consists of a combination of achieving self-interest and other policy
objectives. Contemporary Dutch foreign policy consists of a combination of aspects from different approaches to international cooperation. The findings will show that in this particular case study set in Mozambique a shift can be recognized in which the national self-interest is prioritized. Specifically, it will argue that a shift is occurring in which self-interest increasingly will play a bigger role in the foreign policy design since cabinet Rutte I7. The related geopolitical developments will be highlighted and a case study will be used to show what this shift means to policy design in practice. The following aspects will be examined to comprehend the shift in contemporary Dutch foreign policy: the role natural resources play in contemporary IR, the political developments relevant to Dutch foreign policy and Dutch energy security. The last aspect of the analysis is the Mozambican context and the specific content of the policy as implemented in Mozambique.
The thesis will show that economic self-interest will play a bigger role in terms of business opportunities for the private sector and indirectly Dutch energy supply security, at least in the Mozambican case study. This shift can be seen in a more realist approach towards IR in line with the analysis made by Michael Klare. Klare’s analysis shows acquiring and accessing natural resources will play a bigger role in IR. New approaches taken will attempt to maximize relative gains in relation to other countries.
At the same time, at an international level a clear development related to energy supply security influences the global search for natural resources. Practices of state and private actors related to energy and natural resources have led to demand for regulation by NGOs. As a result, a number of institutions and institutional arrangements are involved with regulating the controversial global search for natural resources. Both the EU and the Netherlands are involved in arrangements attempting to improve governance of natural resources. Institutionalist theory will be used to analyze this development.
While in the policy design and official policy documents the need to prioritize self-interest in contemporary Dutch foreign policy increasingly is emphasized, the Netherlands engages in institutional efforts aimed at improving the current natural resource situation. Both developments highlight aspects of the current Dutch approach
7 The first Rutte minority cabinet ruled between 2010 and 2012. The cabinet was
succeeded by the current second Rutte cabinet.
which is a combination of two approaches towards international cooperation.
1.8. Methodology: case study on Dutch foreign policy in Mozambique
The method of the empirical research conducted for this thesis is a qualitative literary review and a case study. The desk research included policy documents, media sources and secondary academic research. International Relations (hereafter IR) theory is used for the theoretical framework.
Since this thesis examines the Dutch Government’s foreign policy, a significant amount of articles and official documents from the Dutch Ministry and other state institutions were analyzed. Additional information is gathered from international reports from IGO’s, NGOs and private actors. A limitation consists here when there are no interviews used or fieldwork is conducted. When working with official sources and state documents, it is for a researcher difficult to examine the difference between policy and practice. It is the difference between the information officially communicated and the actions as they occur. In this particular case study, additional data on the situation where the policy is implemented would be desired. Unfortunately due to time constraints this was not possible during the research for this thesis.
The focus of the research for this thesis is Dutch foreign policy particularly aimed at energy supply security and Dutch DC initiatives. Using a case study in which these two aspects were included allowed for a thorough examination of the policy design. It was the Mozambican case which was selected in order to examine both aspects. In this thesis, the case study is used to test the findings from the literary review and to identify the trends highlighted by the theory. Bryman distinguishes five types of cases in case study research. The case study used in this thesis would be considered a critical case, as identified by Bryman as a case chosen on the grounds that it will allow a better understanding of the circumstances in which the hypothesis will and will not hold (Bryman 2008: 55).
1.9. Theoretical Framework
The policy oriented research conducted for this thesis is aimed at analyzing contemporary Dutch foreign policy. The theoretical framework is designed to analyze contemporary Dutch foreign policy needs in a challenging and drastically changing international context. This concerns an international context of changing poverty
patterns, shifting geopolitical relations and increasingly urgent global issues, such as financial instability, environmental degradation and resource scarcity. In the midst of all this, the Dutch Government intends to reform development policy. (AIV 2013: 40) Policy documents, media information and research on Dutch foreign policy show how the Dutch Government anticipates on the changing international context with policy adjustments. The Dutch Government attempts in its policy design to strike a balance between the economic self-interest on one side and the moral obligation through international agreements it needs to comply with on the other side. A combination of theoretical approaches is necessary for an accurate and comprehensive analysis of contemporary Dutch foreign policy. In order to answer the main research question, two main approaches of IR theory will be applied to examine both the competitive and the cooperative aspects of contemporary foreign policy. The combined explanatory power of both theoretical approaches is needed to get a complete overview of the developments. In the first section of the theoretical framework used for the analysis, a realist theoretical approach is chosen since it explains a particular strategy state actors can utilize towards energy supply and acquiring natural resources. The realist IR theory attempts to explain state behavior and the rationale behind policy decisions related to the accessing and securing vital natural resources. It is argued that the role of natural resources will only increase in IR.
The second section of the theoretical framework consists of liberal institutionalist theory. It examines increased international cooperation and the institutions designed to facilitate this process. This part is needed since international cooperation and solid international partnerships are of great importance to the Dutch economy. According to the official policy documents, the Dutch are ambitious about facilitating and improving international cooperation through institutions including state and non-state actors.
1.10. Structure of the thesis
This thesis analyzes contemporary Dutch foreign policy. It attempts to explain the specific policy design of Dutch foreign policy initiatives in Mozambique by examining the wider (geo)political developments affecting the Netherlands. The main research question will be answered through three sub questions. This thesis has been divided in three sections which answer the sub questions.
First, the theoretical framework will be outlined in the next chapter. The chapter will explain which theories are used to answer the main research question stated in the introduction. The global scramble for natural resources and its international institutional reactions will be discussed. The next chapter deals with the second aspect of the wider geopolitical context relevant to the Dutch foreign policy design related to Dutch energy supply security. A case study of Mozambique is examined in the fourth chapter in which the Dutch foreign policy model will be applied to the foreign policy initiative as designed for Mozambique. Finally, the fifth chapter will draw together the conclusions from the previous chapters. The conclusion is followed by a discussion and recommendations for further research.
2 International Relations and Access to Natural Resources 2.1. Introduction
This chapter describes the theoretical core of this thesis. The theory described here will be part of the overarching theoretical framework which will be utilized to analyze specific Dutch foreign policy phenomena and related geopolitical developments in the remaining chapters of this thesis. The central research question will be answered by structurally answering each of the three sub questions posed in the introductory chapter of this thesis. The sub question answered in this chapter is: ‘what are the wider geopolitical developments relevant to the role natural resources play in contemporary IR?’
This first part of the analysis aimed at explaining the wider (geo) political developments affecting the Netherlands is to understand recent developments concerning natural resources in IR. Two main theories will be used to analyze these developments affecting different aspects of Dutch foreign policy. Since the contemporary Dutch approach to its foreign policy can be considered a combination of two approaches towards international cooperation, a combination of the two theories is selected in order to use the explanatory power of both theories to highlight specific policy developments regarding natural resources at the state level.
Before the theoretical framework is introduced, the next paragraph will elaborate on energy supply security in IR. The theoretical framework which follows is divided into two sections. Realist theory will be discussed in the first section of the framework in order to understand developments related to the global scramble for
natural resources. The paragraph after that will introduce the second section in which liberal institutionalist theory examines the international institutional reactions to the scramble for natural resources. Finally, this chapter ends with a brief review of this chapter’s findings in order to answer the first sub question.
2.2. The role of natural resources in contemporary IR
The first step at understanding wider geopolitical developments relevant to the role natural resources play in contemporary IR is to examine recent changes in the nature of state behavior towards natural resources and achieving energy supply security. A more detailed look at the politics behind current global energy dynamics is the first necessary step of the analysis central in this thesis. Specifically, it is important to consider which role energy supply security plays in contemporary international relations.
Securing the current and future supply of sufficient energy and natural resources is crucial to a state’s survival and it is an objective every state actor needs to take into account. Today, a number of trends cause increasing pressure on nation states to ensuring access to and acquire natural resources. Trends in population growth and consumption patterns influence the international politics of energy. In addition to that, higher resource prices drive resource nationalism and spur competition for resources (Stanislaw 2009: 1). This leads to a fiercer global ‘battle’ for the remaining natural resources in which both state and non-state actors vie for possession of and the access to crucial natural resources. Nation states and multilateral institutions are challenged to decide how to react to this competition. Stanislaw uses the analogy of chess to describe the new great game over energy. In this game, Stanislaw argues, both the chessboard and the number of players have expanded (Stanislaw 2009: 1). Deciding which strategy to take will determine the future winners and losers. Powerful state actors can, for example, opt for a cooperative strategy in which cooperation is established with other actors that have shared interests. An alternative strategic approach is to treat other actors as antagonists by establishing competitive relations.
Recent research on Dutch foreign policy shows a shift regarding the importance of energy supply security as policy objective. In a 2009 ministerial report on scarcity transition from a Dutch perspective, the government is advised to consider strategies which lead to the use of alternative natural resources. In addition to that, the
Dutch government is advised to find allies and initiate cooperation with both state and non-state actors which have similar interests (MinBuza 2009: 11). A state report added that a special vulnerability for The Netherlands is recognized in relation to energy, metals and minerals (MinBuza 2011: 12).
As a result, policy adjustments were also made by the Dutch Government. In addition to the policy changes made, in a number of reports from knowledge institutes and private consultancy firms advice is given on adjustments in long term strategic foreign policy aimed at natural resources and achieving energy supply security. Both the policy adjustments and the advice are aligned with a trend in which, according to research and state documents, increasingly economic self-interest is prioritized and energy supply security plays a bigger role in contemporary Dutch foreign Policy (MinBuza 2011: 12 and MinBuza 2014 and Rood 2011: 218)8. Policy advice was given by another knowledge institute on the use of DC. The WRR report suggests DC initiatives should be used to pursue the Dutch economic self-interest (WRR 2010: 12). Another trend is a proposed change in the approach towards international cooperation with other countries as a result of the increased importance of natural resources in IR (MinBuza 2011: 12-13).
The Hague Center for Strategic Studies (hereafter HCSS) notes how several countries are actively executing a long term strategy with regards to natural resources in which not profit but the availability and access to the resources is the focus (HCSS 2011: 11). In this context, HCSS proposes the necessity of a change in Dutch development policy. It emphasized that natural resource (and therefore also energy) supply security has become a strategic national interest of the Netherlands (HCCS 2011: 11).
Following questions to the cabinet, an integral strategic policy focused on the access to natural resources was presented in 2011 (European Commission 2011: 10). In this policy a strategy is chosen in line with European initiatives and where necessary can anticipate on the resource policies of important partner countries. This can take place in a bilateral or multilateral framework. (European Commission 2011: 10)
A relentless growth in future global energy demand is expected as a result of changing consumption patterns and an increasing world population. As noted in a
8 The next chapter titled ‘Dutch foreign policy’ will elaborate on the, here just briefly
recent Dutch state report, the pressure on the earth’s natural resources will increase in the near future. This pressure does not lead to a lack of energy, water, food, metals and minerals but to a lack of access to these natural resources (MinBuZa 2011: 12).
The years 2002 to 2008, for example, were marked by a major surge in demand for raw materials, driven by strong global economic growth, particularly in emerging countries such as China. The exponential increase in the demand for raw materials, Ramdoo argues, was triggered by a combination of factors: rising world population, rapid urbanization with resulting huge construction projects and vast infrastructure development as well as fast industrialization, mainly in large emerging economies and the rapid diffusion of emerging technologies in developed countries (Ramdoo 2011: 1).
This increase in demand will be reinforced by the further rapid industrialization and urbanization in countries such as China, India and Brazil (2011 Tackling EU Material Challenges). In addition, rising energy prices force states and corporations to rethink their energy strategy. Perhaps one of the most indispensible elements to modern civilization, raw materials are a fundamental input to all aspects of basic economic activities, ranging from agriculture, industry construction energy and transport (Ramdoo 2011: 1). They have been, and are increasingly likely to remain essential inputs to industrial development, in particular for high-tech sophisticated and clean energy industries (Ramdoo 2011: 1). The search for raw materials drives states to prioritize a national energy strategy to secure long term access to natural resources resulting in increased resource nationalism worldwide. Although there is still an ongoing debate on the severity of future scarcities and human capacity to adapt to them, a number of reports and studies show how increasingly nation states are taking measures to secure access to natural resources (Homer-Dixon 1995: 588). In order to meet the demand for resources from present and future generations, strategic thinking about interdependencies between the supply of and demand for resources is paramount (HCSS 2014: 9).
Another source, The Transatlantic Academy, predicts in a 2012 report a future
‘Global Resource Nexus’ which will be a global battle for land, energy, water and minerals (Transatlantic Academy 2012: 7). As a HCCS report recently concluded on
the current transition of the international system, the relative power of the West is
declining and the influence of emerging economies is growing. Slowly, we are moving away from a Western-dominated to a multipolar world order in which state
capitalist tendencies are becoming more prominent, especially in the natural resources sector (HCCS 2013: 12). As a result, the geopolitical issue of access to natural resources is now on the political agenda of The Netherlands and supranational bodies such as the European Union (Van Hees 2013: 2).
Illustrative of the relevance of alternative resource strategies is the 2009 Russian-Ukrainian gas crisis. The European Commission recently concluded that LNG would be the best way for Europe to deal with any sudden supply shortfall this winter. In the future, tapping into more abundant, if still pricey, supplies of LNG might be Europe’s alternative to Russian energy blackmail9. The EU now has initiated a strategy which attempts to secure its gas supply.
Another example of an energy related policy decision is the appointment of an official Representative Natural Resources at the Dutch Ministry of Foreign Affairs. He will contribute to establishing a Dutch international policy in the long term and achieving sustainable energy supply security (Grondstoffennotitie 2011: 10). The following paragraph will outline the first section of the theoretical framework.
2.3. The global scramble for natural resources
As part of understanding the current wider geopolitical context in which Dutch foreign policy is designed, theory will be used to analyze which specific geopolitical developments affect the Netherlands particularly regarding the shifts in policy mentioned in the previous paragraph. Since recent developments in Dutch foreign policy appear to be in line with a realist line of reasoning10, a realist-driven analysis
with a focus on pursuing self-interest will be central in the first section of the overarching theoretical framework used in this thesis. Michael Klare writes about the role natural resources play in contemporary international relations. The explanatory power of his theory can therefore be used to analyze the geopolitical trends relevant to answer this chapter’s sub question.
As both the EU and the Netherlands have made policy changes due to energy supply security and access to crucial natural resources becoming more important,
9 http://ec.europa.eu/energy/nuclear/safety/stress_tests_en.htm accessed on January
3rd 2015
10 A realist approach towards international politics acknowledges a notion of ‘tragic’
nature of international politics in which the drive for power and the natural human tendency towards aggression end in a zero-sum game (Jackson and Sorensen 2010: 59).
Klare argues these changes fit in a pattern involving a scramble for natural resources. In what he coined ‘the race for what’s left’, he describes a concerted drive by governments and resource firms to gain control over whatever remains of the world’s raw materials base. Government and corporate officials recognize that existing reserves are being depleted at a terrifying pace and will be largely exhausted in the not-too-distant future (Klare 2012: 24-25).
Klare argues that as a result of this international relations increasingly are focused on gaining or maintaining access to and control of valuable natural resources, which is inextricably linked to the post-Cold war shifts in the balance of power (Dannreuther 2010: 3). Klare notes on the international politics of energy: ‘at stake is available energy, mineral resources and arable land. Today’s great game reflects a scramble to secure them (Klare 2008: 2).’.
Regarding future cooperation in international politics, Klare states that the prospects are worrying. A world of rising powers and shrinking resources is destined to produce intense competition among an expanding group of energy-consuming nations for control over the planet’s remaining reserves of hydrocarbons and other key industrial materials (Klare 2008: 7).
Klare sees the global scramble for vital natural resources as a ‘Darwinian struggle’ (UNE 2012). Nation states and private mining companies are involved in the struggle which is a zero-sum game. As Klare notes, countries anticipate to the global fear of resource scarcity and the new geopolitics of energy that will likely accompany it. In the emerging international power system, we can expect the struggle over energy to override all other considerations, national leaders to go to extreme lengths to ensure energy sufficiency for their countries, and state authority over both domestic and foreign energy affairs to expand (Klare 2008: 6). As the priority of natural resources changes in foreign policy, Klare argues a different approach in international cooperation will lead to more conflicts and use of arms in the battle for access to the resources.
New energy order
Under the influence of higher energy demand and the importance of access to natural resources, the changing nature of international relations creates a new order. In the planet’s new international energy order, Klare argues countries which can be divided into energy-surplus and energy-deficit nations. Under the old order, a nation’s ranking
in the global hierarchy was measured by such criteria as its stockpile of nuclear warheads, its warships at sea, and the number of men it had under arms; superpowers had, above all, super-allotments of the power to destroy. (Klare 2008: 14) In the new order, a nation’s rank will increasingly be determined by the vastness of its oil and gas reserves or its ability to mobilize other sources of wealth in order to purchase (or otherwise acquire) the resources of the energy-rich countries (Klare 2008: 14). Klare’s theory fits in the theoretical frame which suffuses military planning, such as that of the Pentagon or the PLA or the Russian armed forces, and promotes national defence strategies which incorporate policies to defend perceived vulnerable energy supply sources and transportation routes (Dannreuther 2010: 3-4). Klare argues the global thirst for energy motivates nation states and private actors to move beyond their own borders and search the world for natural resources. He identifies Africa as the site which has seen some of the fiercest competition among the major international companies and energy-hungry countries (Klare 2008:147). It is the continent in which a big part of the new scramble is taking place. In the following paragraph Klare’s theory will be elaborated on while the role of developed countries in the scramble for energy in Africa is discussed.
2.4. Developed countries’ resource policies in Africa
We have seen how the perceived (future) scarcity of natural resources influences political actions and policy adjustments in Dutch foreign policy. A realist theoretical approach acknowledges foreign policies aimed at achieving energy supply security for each nation itself. The objective in these policy efforts is to focus on achieving relative gains. This paragraph elaborates on the actions of nation states in the earlier described global scramble for energy in which both state and private (often subsidized) actors are involved. In line with the case study in this thesis, the focus will be on policy actions related to energy supply security and achieving access to and possession of crucial natural resources.
Beyond financing war, natural resources have previously been depicted as an important motive of several wars in the 1990s, from the Iraqi invasion of Kuwaiti oilfields, to civil wars fuelled by diamonds in West Africa (Le Billon 2004: 1). A new emphasis on the protection of supplies of vital resources, especially oil and natural gas, is behind this shift in strategic geography (Klare 2001: 3). Klare argues how Africa now is reemerging as a potential source of critical materials. A new scramble
now has commenced on that continent, with energy supplies as its primary target and some new players such as China, India, Indonesia, and Malaysia joining in (Klare 2008: 154). Klare speaks also of a new wave of land acquisition in which foreign state and private actors next to natural resources buy up land for agriculture. Klare notes how this new wave is mostly being carried out with the support of African national governments themselves, who see in it a chance to replace subsistence agriculture with high-payoff cash crops (Klare 2012: 364).
What makes Africa so enticing today is precisely what made it so attractive to foreign predators in previous centuries: a vast abundance of vital raw materials contained in a deeply divided, politically weakened continent, remarkably open to international exploitation (Klare 2008: 154). Because of its tortured history, Africa lacks the sorts of defenses against foreign resource exploitation that other previously colonized regions have established over time (Klare 2008: 147). A 2014 OECD report on transnational corruption shows how the extractives sector has the most bribery cases, with 19% of the total. Over 80% of bribes were promised, offered or paid to officials from state-owned enterprises (OECD 2014: 2).
Ramdoo outlines policies conducted by resource-dependent countries in order to ensure undistorted access to raw materials. She examined policies conducted by the EU, US, South Korea, Japan and China. She noted that also many emerging countries have conducted parallel bilateral strategies in resource-rich countries, by engaging in infrastructure projects and other related services linked to the extractive activities with a view to securing long-term and privileged access to raw materials. This has granted them the favours of many resource-rich countries, largely attracted by the “generous” assistance that often had little strings attached to them (Ramdoo 2011: 2). As is the case for the gas reserves in Mozambique, Klare notes that with few trained professionals, these countries have no choice but to rely on foreign corporations for technical support if they want the mammoth oil and gas projects that have sprung up in recent years to function (Klare 2008: 147).
Japan is investing in Africa as well. It was in the 1970s when Japanese aid came to be thought of as a useful instrument for helping to ensure access to needed raw materials through creating good relations with a variety of countries producing those commodities in Asia and elsewhere (Lancaster 2006: 116). An example of an initiative Japan started in 2009 with a strategy for ensuring stable supplies of rare metals. The strategy was titled: Guidelines for Securing National Resources with the
aim of securing a stable supply of energy resources for Japan (Ramdoo 2011: 12). Korea focuses its raw materials strategy around materials of critical importance for the competitiveness of its industries, and in particular of consumer electronic, information technology, automobile and clean technology. In 2010, a Plan for Stable Procurement of Rare Metals was defined to spend US 15 million by 2016 in order to secure 1,200 tonnes of rare earth elements and to develop mines of other rare earths. South Korea has identified 56 raw materials of interest based on rarity, unfavorable geological distribution and price instability. (Ramdoo 2011: 13) Regarding China, the country has been very active to shop for raw materials around the globe (Ramdoo 2011: 13-14). Klare notes how China's drive to gain access to foreign supplies is most evident in Africa, where Beijing has established ties with the oil-producing governments of Algeria, Angola, Chad, Equatorial Guinea, Nigeria and Sudan (Klare 2008: 154). To ensure access, China has mobilized its state-owned enterprises and has encouraged its private companies to acquire mineral fields abroad. Recently, China through its state-owned banks, has financed a number of projects, not only in mining, but also in related infrastructure and services sectors that are expected to facilitate access to sites and to ensure that the raw materials are shipped back to China (Ramdoo 2011: 15).
Resource nationalism
While resource-dependent countries have multiplied raw material diplomacy actions, many resource-rich countries have taken measures, often of a protectionist nature, to keep their resources for themselves to ensure their own industrial development, often causing serious distortions in the world market (Ramdoo 2011: 8). In a reaction to the global scramble for natural resources, a Transatlantic Academy report states how a resurgence of resource nationalism is constraining the ability of the large Western miners to expand out beyond the English-speaking regions (Transatlantic Academy 2012: 1).
2.5. Institutional reactions to regulate the energy sector
This paragraph introduces the second section of the theoretical framework which is aimed at explaining a, related however different, sort of trends. The theory is used to examine the measures undertaken by private and state actors (including the Dutch) as a response to changes in the energy sector. The response is a reaction to
specifically those changes which have led to a fiercer battle for natural resources as described in the previous paragraph. These developments in the global energy sector have sparked a demand for solutions mostly in the form of institutional responses such as coordination and regulation. NGOs and state actors responded to media reports about actors in the energy sector willing to ignore environmental and societal aspects in its endless pursuit for new natural resources. In an increasingly interdependent world in which IPGs and global issues are increasingly linked to national interests, designing institutions to facilitate cooperation becomes more important.
In his research on resource extraction Watts showed the ecological violence perpetrated upon the biophysical world and social violence criminality and degeneracy associated with the genesis of petro-wealth (Watts 2001: 189). It is the actions of states and powerful multinational corporations (hereafter MNCs) resulting in violence towards the environment and people that have led to demands for change. As Dannreuther argues, international oil and mining companies have been particularly under international pressure due to their environmental impact and through having frequently to operate in conflict-ridden regions where there is widespread insecurity and conflict, an often disenfranchised sub-national region in conflict with the national government, and local communities which fail to gain the expected benefits from the mining operations (Dannreuther 2010: 6).
To comprehend the pattern and argumentation behind institutional efforts aimed at regulating the international energy industry, liberal institutionalist theory is used in this second section of the theoretical framework. State actors will engage in initiatives related to regulating the international energy industry if the outcome is in line with or linked to state interests. Understanding the reasons behind the institutional efforts made at regulating the international energy industry is the next step towards explaining the wider political developments relevant to the role natural resources play in contemporary IR.
When actors agree on a desired policy outcome, the terms of the cooperation need to be decided on. In achieving compliance from nation states, institutions are the necessary response to interdependence between states. Interdependence is the context in which international institutions operate (Keohane 2005: 10). Institutionalists seek to understand politics for the sake of designing institutions, defined as sets of practices and expectations rather than in terms of formal organizations with imposing
headquarters buildings, that will promote cooperation, welfare and human rights (Keohane 2005: 10). Institutionalists share realist assumptions regarding states acting as rational actors pursuing their self-interest. Institutionalists argue that in the case of state actors, institutions, can help to serve state interests.
Keohane argues that regimes, defined as international arrangements as a response to the need for policy coordination, create a more favorable institutional environment for cooperation than would otherwise exist; it is easier to maintain them than it would be to create new ones (Keohane 2005: 244). Such regimes are important not because they constitute centralized quasi-governments, but because they can facilitate agreements, and decentralized enforcement of agreements, among governments (Keohane 2005: 244). Keohane argues the likelihood of cooperation is enhanced by reducing the costs of making transactions that are consistent with the principles of the regime. They increase the symmetry and improve the quality of the information that governments receive (Keohane 2005: 244). Keohane gives the example of the IEA established after an issue required agency for coordination (Keohane 1978: 931-932). Since it was established to help coordinate the policies of advanced industrial states on energy questions (Keohane 1978: 931-932). Because energy is a complex area, and energy policies affect policies on many issues, a wide variety of agencies within membergovernments are interested in IEA activities (Keohane 1978: 932).
A number of recent examples of institutional reactions aimed at the energy sector will be mentioned here. There are projects such as the African Mining Partnership, EITI and Publish What You Pay which contribute to governance transparency and responsible use of natural resource financial funds (HCSS Grondstoffen: 144). The Extractive Industries Transparency Initiative (hereafter EITI) is a non-profit association under Norwegian law which is financially supported by the Dutch government. Its objective is to prevent corruption by publishing information on income and expenses from countries and companies related to gas, oil and mining11. In 2012, the Dutch Ministry of Foreign Affairs started the Conflict Free Tin Initiative (hereafter CFTI) in the Eastern part of the Democratic Republic of Congo. The CFTI aims to show that companies can source conflict free minerals from the Democratic Republic of Congo in accordance with legislation (such as the US Dodd
Frank Act, Section 1502) and international guidelines (such as the OECD Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High-Risk Areas). Through supervision, certification and a trace system will the minerals be kept conflict free. In this initiative facilitated the Ministry a cooperation between different stakeholders consisted of local and international businesses12.
A third initiative is due diligence which plays an important role in the design and implementation of Dutch policy13. Due diligence is now familiar with institutions worldwide. Due diligence can help companies ensure they observe international law and comply with domestic laws, including those governing the illicit trade in minerals (OECD 2013: 12-13). Due diligence gained media attention when the term ‘blood diamonds’ became popularized in the mass media and practices related to the mining of these diamonds were exposed. The practices were harmful towards the environment and the people working in those conditions. It was the then Dutch Ministry of Economic Affairs which contributed financially to the pilot which eventually led to the creation of the OECD-guidelines for due diligence (HCSS 2011:139-140).
In conditions which demand policy coordination, put on the political agenda by the state actors or other stakeholders, state actors can cooperate with an initiative for a number of reasons. As highlighted by the liberal institutionalist theory, insitutions can lead to a reduction of transaction costs and governments can access higher quality information. Institutions can also benefit broader national interests such as in public diplomacy which can result in a better international reputation.
2.6. Conclusion
This chapter discussed the wider geopolitical developments relevant to the role
natural resources play in contemporary IR. It showed the trend of European and Dutch initiatives aimed at prioritizing energy supply security in policy. Energy supply security plays a more important role in contemporary international relations. The shift is the result of an increased pressure in today’s world on nation states to acquire
12 Source: Rijksoverheid, 2012. Accessed on June 9th, 2014 through:
http://www.rijksoverheid.nl/nieuws/2012/09/20/initiatief-voor-conflictvrij-tin.html
13 Due diligence is defined by the OECD as: ‘an on-going, proactive and reactive
process through which companies can ensure that they respect human rights and do not contribute to conflict.
natural resources due to population growth, changes in consumption patterns and higher resource prices. States now have to decide on a strategy to cope with achieving energy supply security and anticipate on other state actors taking related measures. A realist theoretical approach acknowledges foreign policies aimed at achieving energy supply security for each nation itself. The objective in these policy efforts is to further/build on relative gains. The increase in current energy demand motivates nation states to move beyond their own borders and search the world for natural resources. Klare argues a Darwinian struggle is the result in which access to natural resources will increasingly be more important in contemporary international relations. Another trend is highlighted by the institutionalist theoretical approach as outlined in the previous paragraph. Here, institutions and institutional arrangements are seen as a way to facilitate international cooperation aimed at, in this particular case, regulating the extractive industry. Keohane argues that institutions that facilitate cooperation do not mandate what governments must do; rather, they help governments pursue their own interests through cooperation (Keohane 2005: 245). It explains institutional reactions to global problems and improving the energy industry. Keohane argues how institutions can benefit the state actors involved in them since higher quality information can be provided and lower transaction costs (Keohane 2005: 244).
The trends mentioned are contextualized by a wider trend of raw materials diplomacy characterized by countries attempting to acquire natural resources. Powerful state actors such as (among others) China, the US, South-Korea and Japan are undertaking measures aimed at securing access to African natural resources. This is achieved through state initiatives and by private actors often subsidized by the government. Another kind of initiatives detected is the strategic use of DC in order to achieve energy supply security. Examples of this are the Japanese and Chinese initiatives. The rise of resource nationalism indicates how African governments have reacted to game for natural resources taking place in Africa.
3. Dutch Foreign and Energy Policy 3.1. Introduction
The previous chapter examined the wider context of a global scramble of natural resources is taking place. It specifically looked at the role developed countries play in this scramble. In order to analyze contemporary Dutch foreign policy it is imperative
