this is the Netherlands it's a small country around 235 times smaller than the US has a population of 17.5 million which is about a third of Spain's population but somehow it has the 18th largest economy in the world its GDP is larger than Singapore's qatar's and hungary's gdps combined so how did it get here why is this tiny country among the richest in the world let me explain one clear difference between the Netherlands and other countries is its geography and it's weird and interesting it's located in the northwest of Europe next to the North Sea
and is a really flat country with more than a quarter of it lying below the sea level there's actually a saying that goes God created the Earth but the Dutch created the Netherlands referring to the fact that throughout history the Dutch have been fighting to keep the water out of their country well it sounds like they're doomed because of the constant threat of flooding and their lack of a diverse geography it's actually quite the opposite being below the sea level and having to protect themselves from floods out of necessity the Dutch became masters of the
water able to control where it goes and what land stays dry they built dyes and dams leading to an intricate and complex water management system the techniques they use are so effective that they even managed to reclaim Land from the sea fland is one of netherlands' 12 provinces and essentially didn't exist until the Dutch decide to drain out the water and reclaim an area of 1,412 KM of land all of this water management is insanely impressive but how does it help them economically well the Netherlands has very fertile soil making it easy to grow crops
even the reclaimed land has great growing potential and so if you couple this fertility with an expansive system of water management you get a country that is very capable of developing its agriculture industry something that will become very important later on but for now it's important to understand that the Dutch being forced to become Masters at managing water as well as the fertile land gave it a head start in agriculture and allowed it to develop more quickly than other countries which were not forced to innovate as much I also mentioned that the land was very
flat which actually helps a lot since farming and building on flat land is obviously easier enabling them to develop their infrastructure at a much faster rate and when you also account for its geographical positioning the story becomes even clearer it's right at the North Sea giving access to Maritime trade routes the Ry and Val Rivers which flow through the Netherlands also allows for trading routes between Germany and Switzerland to be formed and generally being close to other developed countries such as England Germany and France made it much easier to trade something which the Dutch are
known for but we'll touch on that in a bit its geography does give it an advantage but no development would be possible without a bit of innovation in 1594 the Dutch invented the wind powerered Sawmill which made the processing of wood 30 times faster than before instead of having to rely on Manpower they could harness the wind to do the work for them and remember how I mentioned that trade would become crucial to the Netherlands well with this industrial production of wood it meant that they could build ships at a much faster rate solidifying their
opportunity to become leaders of trade and specifically one company took this opportunity and ran with it it was the Dutch East India company or is the Dutch call it IND or VOC for short established in 160 2 this Trading Company was granted a government Charter for East Asia effectively allowing it to hold a monopoly on trade in East Asia combine this Monopoly with a country that is leading the world in trade ships and Innovation and you get complete domination this company became so big that at its peak it was worth 78 million holders which translated
to today's money is a whopping 7.9 trillion to put that into perspective the current most valuable company in the world Microsoft has a valuation of $3 trillion less than 2 and2 times voc's valuation the Dutch East India Company was so powerful that it even obtained governmental Powers such as being able to declare and wage war negotiate treaties and establish colonies but how did this help the Dutch well it's logical to assume that the vocc being so powerful and impactful brought a lot of trade and money into the Netherlands this then helped the Netherlands become a
center of Commerce and and grow into an even larger economy fun fact the first stock exchange was actually established in the Netherlands in Amsterdam in 1611 and this of course attracted even more investment to the Netherlands the Netherlands becoming an economic Center in the 17th century also attracted Highly Educated people from all parts of Europe people would come to the Netherlands in search for higher paying jobs and opportunities therefore creating even more economic value which Amplified the wealth that was in the Netherlands but that was 400 years ago what about now how is it still
holding its place in the world economy nowadays the Netherlands is very well known for its Agriculture and Export industry carrying on from its past the Netherlands continues to put emphasis on their agricultural sector this also includes innovation in agriculture the University of vingan ranks as the best agricultural Education Institute in the world and the Dutch are constantly researching ways to improve the efficiency of farming agriculture can explain part of why the Netherlands has such large exports but the other large part of the exports are due to something called the Rotterdam effect this phenomenon named after
the Dutch city of Rotterdam famous for its massive Port refers to Imports that are quickly re-exported out of the country this happens because for some countries it's actually cheaper to import products via the Netherlands rather than directly from the source and re-exports count as an export of the country which explains why the Netherlands has such high exports in fact this Rotterdam effect typically accounts for around half of all exports of the Netherlands apart from the export and agriculture business the Netherlands is also an attractive country for other businesses and Investments its political and economical stability
as well as the access to a highly educated and skilled Workforce makes it much friendlier for businesses linking back to its geography it's very useful for businesses to be so close to other economically powerful countries such as Germany meaning they have great access to these markets sweetening the prospect for establishing a business in the Netherlands the complex and intricate tax system and tax treaties also means that large corporations can find loopholes in order to not pay as much in taxes it then makes sense why so many large corporations benefit from having headquarters in the Netherlands
it turns out that the geography history politics and clever systems of the Netherlands all contribute to its riches this wealth was not built overnight but instead took centuries of innovation and competition to reach this scale which also goes to show how important time is in amassing wealth and it's interesting to think whether the Dutch would be as prosperous today if they hadn't had to face the challenge of keeping water out of their country if you enjoyed this video please make sure to subscribe it helps the channel out a lot and YouTube thinks you'll enjoy this
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