Market forces boosted wealth, says CPB

The introduction of increased competition into a number of Dutch industries has boosted both social welfare and productivity, the government’s economic policy unit CPB says in its latest report on the Dutch economy.

In the 1990s, the Netherlands made determined efforts to get rid of monopolies and cartels and in most cases the results have been beneficial, the CPB says, particularly in the telephony, air travel and the construction sectors.
While some people have lost their jobs because of the drive towards free markets, this should be offset against the lower prices and improved choice enjoyed by the majority.
The cabinet must not be led astray in the drive towards greater competition by issues such as job losses, Coen Teulings, head of the CPB, is quoted as saying on the Volkskrant website. While the current cabinet has plans to introduce more market forces into the healthcare system, it should not stop with this sector alone.
The CPB is also critical of the cabinet’s refusal to raise the retirement age and scrap mortgage tax relief. Focusing on getting more people into work is not enough to counteract the effect of the aging population, Teulings was reported as saying.
The CPB also revised its economic forecasts for this year, saying the Dutch economy will grow 2.25% this year and 1.75% in 2009. The Netherlands will ‘unavoidably’ be affected by the consequences of the US credit crisis later this year, Teulings added.

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