According to cheeroutdoor, Belgium belongs to a group of small, highly developed European states that occupy an important place in the modern world economy. This category of “small privileged nations” managed to use its natural favorable conditions (a convenient geostrategic position, the availability of natural resources, etc.) very effectively for accelerated industrial development. Subsequently, on this basis, the dominant sectors of the national economy began to form, focused on the production of high-quality and technically advanced products for their own “marketing niches” of the world market.
Belgium is often called one of the first industrialized countries in the world. In the 19th century it was even called “the little workshop of the world.” In the first years after the 2nd World War, the term “wonder country” or “showcase of industrial prosperity” was constantly added to it. But in the last three decades of the 20th century. Belgium was often referred to as a “sick member of the European Union”. The economy of this country at the beginning. 21st century is in the phase of the most complex structural restructuring, the process of searching for a new industrial specialization in the world economy. And in this area, certain achievements began to be identified.
Belgian GDP – 297.2 billion dollars (2002), which corresponds to 0.7-0.8% of the world level. GDP per capita – 29 thousand dollars, which is at the level of the leading European countries, but significantly inferior to most small highly developed countries (9th place). The economic growth of the country in recent years was characterized by moderate rates (GDP growth in 1999 – 2.5%, in 2000 – 4.1%, in 2001 – 2.6%), but in 2002 there was a sharp slowdown (0.6%), which was caused by the deterioration of the world economic situation. There is practically no inflation in the country (1.7% in 2002).
The most difficult problems of the Belgian economy are related to employment (the total number of employees was 4.44 million people in 2001), in terms of unemployment, the country constantly occupies 1-2 places in the EU (in 1999 – 11.7%, in 2000 – 10 9%, in 2001 – 10.6% and only in 2002 some progress was achieved – 7.2%). The main reason for this phenomenon is related to the structural weakness of the national economy (“old-fashioned specialization”). Belgium turned out to be the most wounded among European countries by competition from the so-called. new industrial states in the world markets. They acted as producers and suppliers of such products, which essentially coincided with the traditional Belgian specialization (steel, metalworking, general engineering, inorganic chemistry, glass, textiles).
The features of the sectoral structure of the Belgian economy are quite clearly reflected in the contribution of industries to GDP (2001): agriculture – 1%, industry – 24%, services – 74%. A similar picture emerges in the analysis of employment – 2, 25, 73%, respectively.
Industry. The predominance of the service sector played a significant role in slowing down the processes of structural restructuring of the national economy. The country’s leading financial and industrial groups (Societe General de Belgique, Groupe Bruxelles Lambert, etc.) arose during the former economic specialization and controlled up to half of the economic entities. Belgian capitalism, which can be characterized more as banking than industrial-entrepreneurial, showed little inclination to switch from “old-fashioned” but profitable specialization to new, high-risk industries. Therefore, the bet was made on the modernization and even the creation of new modern enterprises in the old industries. For many centuries, the traditional economic specialization of the country was based on ferrous and non-ferrous metallurgy. The first “workshops of ferons” (metallurgists) appeared in these places in the Middle Ages. Later, it was here that the so-called. Walloon process of the second remelting of cast iron, which led to the emergence of steelmaking. Modern Belgium continues to be one of the leading steel producers in the EU (approx. 11.3 million tons in 2001). Its share in world exports of these products is approx. 15-20%. But a special emphasis is now placed on the production of specialized products: stainless steel, car rental, steel wire, etc. Its share in world exports of these products is approx. 15-20%. But a special emphasis is now placed on the production of specialized products: stainless steel, car rental, steel wire, etc. Its share in world exports of these products is approx. 15-20%. But a special stake is now placed on the production of specialized products: stainless steel, car rental, steel wire, etc.
The formation of a new image of this industry took place in close alliance with foreign companies. Leading stainless steel producer Cockerill-Sambre has lost a controlling stake of 53.7% to the French company Usinor. The modern metallurgical plant Sidmar, focused on the production of automotive sheets, became part of the Luxembourg concern ARBED (60%), etc.
The chemical industry also continues to be the most important basis of the Belgian industry (in terms of production value, it ranks second after mechanical engineering). It originated on the basis of the use of waste from the blast-furnace industry. The method of obtaining soda developed by the local entrepreneur Solvay led to the rapid development of the production of various acids (nitric, sulfuric, etc.), as well as mineral fertilizers. Belgium continues to be the largest European producer and exporter of inorganic chemicals (approx. 1/3).
At the same time, the traditional leader in this industry, the Solvay concern, has already partially shifted its production to the field of organic chemistry. Together with another leading national concern USB, it is gradually turning into the largest producer of modern pharmaceutical products. At the same time, the vast majority of new organic chemistry production facilities were formed in partnership with foreign concerns (BP, Dow Chemicals, Union Carbide, BASF, etc.), which settled in the Antwerp port area. Of the 20 leading chemical corporations in the world, 10 are represented by their divisions in this area (it is considered the largest European center of chemical production).
Structural shifts are also taking place in Belgian engineering. It traditionally focused on the production of equipment for metallurgy and chemistry, vehicles, and electrical products. Belgian firms are still leading in the production and export of forging and pressing equipment (LFT). But the first place was taken by transport engineering, in which, instead of railway and ship production, a large-scale production of passenger cars was launched (annually about 1 million units).
This sector of Belgian engineering was also created in close cooperation with foreign capital. The beginning was laid by the American General Motors, which built a large car assembly plant in the Antwerp port area (about 420 thousand units annually). Then the production buildings of another American auto giant Ford appeared (on the outskirts of Ghent). If the first company focused mainly on the “screwdriver model” of production (i.e. assembly from imported components), then the second began to use local components associated with traditional Belgian specialization (wings made of rolled steel, bodies, auto glass, etc.). Later, this model began to be used in B. and European auto concerns (Renault, Volkswagen, Volvo).
This way of international specialization of the Belgian industry caused some concern in the country, as the dependence of the national economy on the strategic plans of foreign partners increased. But a pragmatic approach to solving this problem prevailed. There was an opportunity to create a new powerful production, provide the country with average European economic growth rates, and prevent the catastrophic development of “high unemployment”.
The elite dozen of Belgian corporations included so far a few high-tech companies (Agfa-Gevaert, Barco), as well as two chemical-pharmaceutical firms. However, on the approaches to the leaders is a fairly large group of successfully operating companies: Real Software (software), Innogenetics (biotechnology), etc.
At the same time, the overwhelming predominance of bank capital (about $70 billion, ie 61.4% of all assets of the leading group) continues to be the most important feature of the Belgian economic structure. Such an industrial structure is not found in small industrial European countries. The former dominance of banking capital in the Belgian economy still remains.
True, structural shifts are clearly visible in the very environment of commercial banks. Of the banks of the old “old-fashioned specialization”, only Groupe Bruxelles Lambert managed to maintain its positions, while the rest were forced to merge with others, acquiring new brands (Fortis, Dexia, etc.), or even leave the national stock exchange. But no less important is the emergence of the first Flemish bank Almanij, which is associated with corporations of a new industrial orientation.
Agriculture does not play a significant role in the country’s economy. Dairy farming (stall farming) predominates, accounting for approx. 75% of the value of agricultural products. Under fodder crops and meadows, approx. 65% of the agricultural area, under cereals – approx. 15% (more than half of the demand for grain is met by imports). Farms predominate, but more than half of the entire agricultural area is cultivated on the basis of rent (small-peasant farming has survived mainly in the Ardennes).
Transport and communication. Modern Belgium is usually called the “European crossroads” because it is located at the intersection of major transport and trade routes. Belgium ranks 1st in the world in terms of the density of the railway network. Its length is 3422 km (including 2517 km electrified). High-speed trains (HST/TGV) connect the country with the capitals of many European countries.
Roads include autobahns (1674 km), which are considered the most modern in Europe (they are free of tolls and lit all night). 7 trans-European highways pass through the country. The system of local highways (14.4 thousand km) provides access to all settlements. The pipeline system operates effectively: for the transportation of crude oil (161 km), oil products (1167 km) and natural gas (3.3 thousand km).
Several sea and river ports function effectively in the country: the largest is Antwerp, which ranks second in Europe (annual cargo turnover is 120 million tons, 20 thousand ships), Bruges, Ghent, Liege, Namur, Ostend. The marine merchant fleet consists of 20 vessels (54.1 thousand barrels per ton), incl. 9 petrochemical and 5 oil tankers, 5 dry cargo ships (Cargo). The total length of river navigation is 1586 km. Navigation channels are of great transport importance (the most important is the Albert Canal between Antwerp and Liège).
The country’s largest international airport is Brussels (Zaventem), which provides annual transportation of 0.5 million tons of cargo. In addition, there are airports in Antwerp, Ostend, Charleroi, Beerset. The telephone and telegraph communication system in the country is considered to be highly developed, technologically advanced and fully automated. International communications are provided by five submarine cable systems and two above-ground satellite stations (Intelsat and Eutelsat).
Trade (wholesale and retail) has reached a large scale. In essence, the entire country has been divided into segments, which are served by several dozen large wholesale and retail companies (including foreign firms). They created a special system of commodity flows from direct producers of products to supermarket counters (agricultural products arrive within one day). It is no coincidence that wholesale and retail giant Delgaize entered the top ten of the largest national corporations, which rarely happens in other small European countries.
Tourism and services. The entire system of the tourism business is quite clearly divided in accordance with the characteristics of the two main linguistic-communal regions (although the inhabitants of the southern provinces prefer to call their region Wallonia-Brussels). In each regional structure, there are two main directions for attracting tourists. The first is focused on demonstrating ancient historical cities (in Flanders – Antwerp, Ghent, Bruges, Louvain; in Wallonia – Namur, Liege, Mons and Brussels). The second is aimed at getting acquainted with natural resources (in the north – the sea coast, along which a single international tram line runs from the French to the Dutch border; in the south – the Ardennes mountain range).
The current economic and social policy of the country is aimed at finding ways to more effectively address a number of critical problems. In the economic sphere, the main efforts are concentrated on the development and implementation of a new concept of the country’s participation in the system of the international division of labor. This is primarily about supporting the sectors of the “new economy” (telecommunications, microelectronics, biotechnology, etc.), but in order to raise the national economy to the level of world standards, it is necessary to facilitate the inflow of foreign entrepreneurial capital. It is believed that Belgium, with a largely multilingual population, can create an efficient and friendly environment for the international society to communicate and do business. At the first stage of such a program of structural transformation of the economy, the state intends to make the main bet on the modernization of infrastructure facilities (ports, airfields, main roads). At the same time, the emphasis is on the full support of the country’s functions as the “Golden Gate of Europe”, which the Belgians have performed with varying success over the past 500 years. At the same time, the state is gradually withdrawing from the production and entrepreneurial sphere (the privatization of 150 large companies has begun) in order to create more favorable conditions for private entrepreneurial initiative (the efficiency of the public sector turned out to be rather low). which the Belgians have performed with varying degrees of success over the past 500 years. At the same time, the state is gradually withdrawing from the production and entrepreneurial sphere (the privatization of 150 large companies has begun) in order to create more favorable conditions for private entrepreneurial initiative (the efficiency of the public sector turned out to be rather low). which the Belgians have performed with varying degrees of success over the past 500 years. At the same time, the state is gradually withdrawing from the production and entrepreneurial sphere (the privatization of 150 large companies has begun) in order to create more favorable conditions for private entrepreneurial initiative (the efficiency of the public sector turned out to be rather low).
On this basis, it is supposed to solve the main social problems. According to the current prime minister, “the best social protection is a good job.” Particular importance is attached to the creation of the “Silver Fund” to provide funding for the solution of the demographic problem, which is associated with the aging of the population (its peak will be reached in 2012).
The gradual formation of the second “capitalized basis” for the current pension system is expected. To this end, a large-scale privatization of state property is being carried out.
Monetary policy is focused on solving three main problems: the reduction of public debt, the elimination of the budget deficit, and the implementation of tax reform. The policy of the European format involves the reduction of public domestic debt to 60% of GDP. In 1993, this figure for Belgium was the highest in the EU – 135%. In 2002, the level of public domestic debt was reduced to 100%.
Great efforts were made by the government to achieve a balanced budget. For the past 50 years, it has always been in short supply. For the first time in 2000, it was practically balanced (minus 0.1%), and in 2001 a small surplus was obtained (plus 0.3%).
The tax burden in Belgium is considered the highest in the EU – 46.3% of GDP (2001) compared to 41.6% in the EU. At the same time, the share of income taxes reached 14.3% (in the EU – 10.9%). The new fiscal reform program (2001-02) provides for a 15% reduction in the tax burden over a five-year period. This will happen as a result of a reduction in the maximum tax rate to 50% (in 2002 it ranged from 52.5-55%).
The standard of living of the population is high, since wages in the country are $25.58 per hour (June 2000). According to this indicator, Belgium is in the top three European countries (after Germany and Switzerland). However, the tax burden is also high. It should decrease as part of the ongoing reform. A particularly noticeable improvement is associated with the abolition of discrimination against non-family individuals. Additional tax incentives are provided for the low-income in order to overcome the so-called. the trap of unemployment, in which it becomes more profitable not to work, but to receive a tax-free benefit. Only 4% of the population lives below the poverty line.
The foreign economic sphere plays a crucial role for the development of the country, which is explained by the international specialization of its economy and its important geostrategic position in Europe. This small country has been among the top dozen world exporters of goods and capital for more than a century. The volume of export of Belgian products in 2002 amounted to 162 billion dollars, and import – 152 billion dollars. Main export partners: EU – 75.3%, USA – 5.6%, import: EU – 68.7%, USA 7.2%. The positions of Belgium in the international movement of capital are equally significant. The volume of accumulated foreign direct investment in 2000 was $139.7 billion (9th place in the world), and the total value of foreign direct investment in the country was $185.6 billion (7th place).
