Economy of Belgium
Encyclopedia
The modern, private enterprise
economy of Belgium
has capitalised on its central geographic location, highly developed transport network
, and diversified industrial and commercial base. The first country to undergo an industrial revolution on the continent of Europe in the early 19th century, Belgium developed an excellent transportation infrastructure of ports, canals, railways, and highways to integrate its industry with that of its neighbors. Industry is concentrated mainly in the populous Flanders
in the north, around Brussels
and in the 2 biggest Walloon cities, Liège
and Charleroi
, along the sillon industriel
. Belgium imports raw materials and semi-finished goods that are further processed and re-exported. Except for its coal, which is no longer economical to exploit, Belgium has virtually no natural resources. Nonetheless, most traditional industrial sectors are represented in the economy, including steel, textiles, refining, chemicals, food processing, pharmaceuticals, automobiles, electronics, and machinery fabrication. Despite the heavy industrial component, services account for 74.9% of GDP, while agriculture accounts for only 1% of GDP.
With exports equivalent to over two-thirds of GNP, Belgium depends heavily on world trade. Belgium's trade advantages are derived from its central geographic location and a highly skilled, multilingual, and productive work force. One of the founding members of the European Community, Belgium strongly supports deepening the powers of the present-day European Union
to integrate European economies further. About three-quarters of its trade is with other EU countries.
Belgium's public debt is about 99% of GDP. The government succeeded in balancing its budget during the 2000-2008 period, and income distribution is relatively equal. Belgium began circulating the euro
currency in January 2002. Economic growth and foreign direct investment dropped in 2008. In 2009 Belgium is likely to have negative growth, growing unemployment, and a 3% budget deficit, stemming from the worldwide banking crisis.
, French-speaking
Wallonia was a technically advanced, industrial region, with its industry concentrated along the sillon industriel
, while Dutch-speaking
Flanders
was predominantly agricultural with some industry, mainly processing agricultural products and textiles. This disparity began to fade during the interwar period
. When Belgium emerged from World War II
with its industrial infrastructure relatively undamaged thanks to the Galopin doctrine
, the stage was set for a period of rapid development, particularly in Flanders. The postwar boom years, enhanced by the establishment of the European Union
and NATO headquarters in Brussels
, contributed to the rapid expansion of light industry throughout most of Flanders, particularly along a corridor stretching between Brussels
and Antwerp, which is the second largest port in Europe after Rotterdam
.
Foreign investment contributed significantly to Belgian economic growth in the 1960s. In particular, U.S. firms played a leading role in the expansion of light industrial and petrochemical industries in the 1960s and 1970s.
The older, traditional industries of Wallonia, particularly steel industry, began to lose their competitive edge during this period, but the general growth of world prosperity masked this deterioration until the 1973
and 1979
oil
price shocks and resultant shifts in international demand sent the economy into a period of prolonged recession
. In the 1980s and 1990s, the economic center of the country continued to shift northwards to Flanders with investments by multinationals
(Automotive industry
, Chemical industry
) and a growing local Industrial agriculture
(textile
s, food
).
The early 1980s saw the country facing a difficult period of structural adjustment
caused by declining demand for its traditional products, deteriorating economic performance, and neglected structural reform. Consequently, the 1980-82 recession shook Belgium to the core—unemployment mounted, social welfare costs increased, personal debt soared, the government deficit climbed to 13% of GDP, and the national debt, although mostly held domestically, mushroomed.
Against this grim backdrop, in 1982, Prime Minister Martens'
center-right coalition government formulated an economic recovery program to promote export-led growth by enhancing the competitiveness of Belgium's export industries through an 8.5% devaluation. Economic growth rose from 2% in 1984 to a peak of 4% in 1989. In May 1990, the government linked the Belgian franc
to the Deutsche Mark, primarily through closely tracking German
interest rates. Consequently, as German interest rates rose after 1990, Belgian rates have increased and contributed to a decline in the economic growth rate. In 1992-93, the Belgian economy suffered the worst recession since World War II, with the real GDP declining 1.7% in 1993. A boost in business investment and exports provided the economy's impetus for recovery.
On May 1, 1998, Belgium became a first-tier member of the European Monetary Union. Belgium switched from the Belgian franc
to the Euro
as its currency after January 1, 2002. Belgian per capita GDP ranks among the world's highest. In 2008, the per capita income (PPP) was $37,500. The federal government has managed to present balanced budgets in recent years, but public debt remains high, at 99% of 2009 GDP. GDP growth in 2009 was negative at -1.5%.
negotiates on trade issues for all member states, which, in turn lessens bilateral trade disputes with Belgium.
The Belgian Government encourages new foreign investment as a means to promote employment. With regional devolution, Flanders
, Brussels
, and Wallonia are now courting potential foreign investors and offer a host of incentives and benefits. Foreign companies in Belgium account for approximately 11% of the total work force, with the U.S. share at about 5%. Attracted by the EU 1992 single-market program, many foreign firms and lawyers have settled in Brussels since 1989.
benefits, and other benefits and pension
s. With the onset of a recession in the 1970s, this system became an increasing burden on the economy and accounted for much of the government budget deficits. The national unemployment figures mask considerable differences between Flanders
and Wallonia. Unemployment in Wallonia is mainly structural, while in Flanders it is cyclical. Flanders' unemployment level equals only half that of Wallonia. The southern region continues a difficult transition out of sunset industries (mainly coal and steel), while sunrise industries (chemicals, high-tech, and services) dominate in Flanders.
Belgium's unemployment rate was 6.5% in 2008. A total of 4.99 million people make up Belgium's labor force. The majority of these people (73%) work in the service sector. Belgian industry claims 25% of the labor force and agriculture only 2%. As in other industrialized nations, pension and other social entitlement programs have become a major concern as the baby boom
generation approaches retirement.
The federal government ran a 7.1% budget deficit in 1992 at the time of the EU's Treaty of Maastricht, which established conditions for Economic and Monetary Union (EMU) that led to adoption of the common Euro
currency on January 1, 2002. Among other criteria spelled out under the Maastricht treaty, the Belgian Government had to attain a budget deficit of no greater than 3% of GDP by the end of 1997; Belgium achieved this, with a total budget deficit in 2001 (just prior to implementation of the Euro) that amounted to 0.2% of GDP. The government has balanced the budget every year since, until 2009 where it ran a deficit of about $25 billion. Belgium's accumulated public debt remains high at 99% of 2009 GDP. A slight decrease in the accumulated public debt compared to GDP has been seen, however, thanks to a higher economic growth rate compared to the budget growth rate, which pushed the percentage from 99% of GDP in 2009 to 95% of GDP in 2011, a four point decrease in two years, a feat rare enough to mention in the Western World.
, Antwerp, Liège
, Bruges
, Charleroi
or Ghent
also exhibit significant differences. In general, productivity in Flanders is roughly 20% higher (per inhabitant) than in Wallonia. Brussels' GDP per capita is much higher than either region, although this is in many ways artificial, as many of those that work in the Brussels-Capital Region live in Flanders or Wallonia. Their output is counted in Brussels and not where they live, artificially raising the per capita GDP of Brussels and slightly lowering that of Flanders and Wallonia.
Unemployment
has remained consistently more than twice as high in Wallonia than in Flanders, and even more in Brussels, during most of the last 20 years (2009, Flanders: 5.0% ; Wallonia: 11.2% and Brussels: 15.9%)
, the government of the Flemish Community
and the government of the French Community
. Brussels also has many commuters, with 230,000 coming from Flanders, and 130,000 from Wallonia. Much of the success of Brussels is based on the high educational skills of its workforce.
The port of Antwerp
was in 2004 the second largest European sea port by cargo volume, and the Antwerp freight railway station accounts for one-third of Belgian freight traffic. Antwerp is the first diamond market in the world, diamond exports account for roughly 1/10 of Belgian exports. The Antwerp-based BASF plant is the largest BASF-base outside Germany
, and accounts on its own for about 2% of Belgian exports. Other industrial and service activities include car manufacturing, telecommunications, photographic products.
The port of Bruges-Zeebrugge is one of the most important, modern and fastest growing ports in Europe. It is Europe's largest port for RoRo
traffic and natural gas. It also is the world's largest port for the import and export of new vehicles. Tourism
is also a major component of the economy of Bruges. Due to its pristine medieval city centre, Bruges has become a popular tourist destination. Annually about 2.5 million day tourists visit the city and in 2007 there were about 1.4 million overnight stays.
The port of Ghent
, in the north of the city, is the third largest port of Belgium. It is accessed by the Ghent-Terneuzen Canal
, which ends near the Dutch
port
of Terneuzen
on the Western Scheldt
. The port houses, among others, big companies like Arcelor Gent
, Volvo Cars
, Volvo Trucks
, Volvo Parts, Honda
, and Stora Enso
. The Ghent University
, the second largest university of Belgium by number of students, and a number of research oriented companies are situated in the central and southern part of the city. Tourism is increasingly becoming a major employer in the local area. Begonias have been cultivated in the Ghent area since 1860. Belgium is the world's largest producer of begonias, planting 60 million tubers per year. Eighty percent of the crop is exported.
was one of the most important steel
-making centres in Europe. Starting in 1817, John Cockerill extensively developed the iron and steel industry. The industrial complex of Seraing
was the largest in the world. Although now a shadow of its former self, steel production and the manufacture of steel goods remain important.
Liège has also been an important centre for gunsmithing since the Middle ages
and the arms industry is still strong with the headquarters of FN Herstal. The economy of the region is now diversified, the most important centers are mechanical industries (aircraft engine
and Spacecraft propulsion
), space technology, information technology
, biotechnology
and also production of water
, beer
or chocolate
. Liège Science Park
south east of the city, near the University of Liège
campus, houses spin-offs
and high technology businesses. Liège is also a very important logistic
center: the city possesses the third largest river port in Europe, directly connected to Antwerp, Rotterdam
and Germany via the Meuse river
and the Albert Canal
. In 2006 Liège Airport
was the 8th most important cargo airport in Europe. A new passenger terminal was opened in 2005. It is also the main hub and the headquarter of TNT Airways
.
Charleroi
features an industrial area, iron and steel industry, glassworks, chemicals, and electrical engineering. Charleroi is in the center of a vast coal basin, called Pays noir
. Many slag heap
s still surround the city. Charleroi is also known for its publishing industry with Dupuis
, one of the main publishers of Franco-Belgian comics
, located in Marcinelle.
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
economy of Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
has capitalised on its central geographic location, highly developed transport network
Transport network
A transport network, or transportation network in American English, is typically a network of roads, streets, pipes, aqueducts, power lines, or nearly any structure which permits either vehicular movement or flow of some commodity....
, and diversified industrial and commercial base. The first country to undergo an industrial revolution on the continent of Europe in the early 19th century, Belgium developed an excellent transportation infrastructure of ports, canals, railways, and highways to integrate its industry with that of its neighbors. Industry is concentrated mainly in the populous Flanders
Flanders
Flanders is the community of the Flemings but also one of the institutions in Belgium, and a geographical region located in parts of present-day Belgium, France and the Netherlands. "Flanders" can also refer to the northern part of Belgium that contains Brussels, Bruges, Ghent and Antwerp...
in the north, around Brussels
Brussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
and in the 2 biggest Walloon cities, Liège
Liège
Liège is a major city and municipality of Belgium located in the province of Liège, of which it is the economic capital, in Wallonia, the French-speaking region of Belgium....
and Charleroi
Charleroi
Charleroi is a city and a municipality of Wallonia, located in the province of Hainaut, Belgium. , the total population of Charleroi was 201,593. The metropolitan area, including the outer commuter zone, covers an area of and had a total population of 522,522 as of 1 January 2008, ranking it as...
, along the sillon industriel
Sillon industriel
The sillon industriel is the former industrial backbone of Wallonia and thus of Belgium. It runs across Wallonia, passing from Dour, in Borinage, in the west, to Verviers in the east, through Mons, La Louvière, Charleroi, Namur, Huy, and Liège, following the valleys of the rivers Haine, Sambre,...
. Belgium imports raw materials and semi-finished goods that are further processed and re-exported. Except for its coal, which is no longer economical to exploit, Belgium has virtually no natural resources. Nonetheless, most traditional industrial sectors are represented in the economy, including steel, textiles, refining, chemicals, food processing, pharmaceuticals, automobiles, electronics, and machinery fabrication. Despite the heavy industrial component, services account for 74.9% of GDP, while agriculture accounts for only 1% of GDP.
With exports equivalent to over two-thirds of GNP, Belgium depends heavily on world trade. Belgium's trade advantages are derived from its central geographic location and a highly skilled, multilingual, and productive work force. One of the founding members of the European Community, Belgium strongly supports deepening the powers of the present-day European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
to integrate European economies further. About three-quarters of its trade is with other EU countries.
Belgium's public debt is about 99% of GDP. The government succeeded in balancing its budget during the 2000-2008 period, and income distribution is relatively equal. Belgium began circulating the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
currency in January 2002. Economic growth and foreign direct investment dropped in 2008. In 2009 Belgium is likely to have negative growth, growing unemployment, and a 3% budget deficit, stemming from the worldwide banking crisis.
Belgian economy in the twentieth century
For 200 years through World War IWorld War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, French-speaking
French language
French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...
Wallonia was a technically advanced, industrial region, with its industry concentrated along the sillon industriel
Sillon industriel
The sillon industriel is the former industrial backbone of Wallonia and thus of Belgium. It runs across Wallonia, passing from Dour, in Borinage, in the west, to Verviers in the east, through Mons, La Louvière, Charleroi, Namur, Huy, and Liège, following the valleys of the rivers Haine, Sambre,...
, while Dutch-speaking
Dutch language
Dutch is a West Germanic language and the native language of the majority of the population of the Netherlands, Belgium, and Suriname, the three member states of the Dutch Language Union. Most speakers live in the European Union, where it is a first language for about 23 million and a second...
Flanders
Flanders
Flanders is the community of the Flemings but also one of the institutions in Belgium, and a geographical region located in parts of present-day Belgium, France and the Netherlands. "Flanders" can also refer to the northern part of Belgium that contains Brussels, Bruges, Ghent and Antwerp...
was predominantly agricultural with some industry, mainly processing agricultural products and textiles. This disparity began to fade during the interwar period
Interwar period
Interwar period can refer to any period between two wars. The Interbellum is understood to be the period between the end of the Great War or First World War and the beginning of the Second World War in Europe....
. When Belgium emerged from World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
with its industrial infrastructure relatively undamaged thanks to the Galopin doctrine
Alexandre Galopin
Alexandre Galopin was a Belgian businessman. He was director of the Société Générale de Belgique, a large Belgian company founded in 1822 by William I....
, the stage was set for a period of rapid development, particularly in Flanders. The postwar boom years, enhanced by the establishment of the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
and NATO headquarters in Brussels
Brussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
, contributed to the rapid expansion of light industry throughout most of Flanders, particularly along a corridor stretching between Brussels
Brussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
and Antwerp, which is the second largest port in Europe after Rotterdam
Rotterdam
Rotterdam is the second-largest city in the Netherlands and one of the largest ports in the world. Starting as a dam on the Rotte river, Rotterdam has grown into a major international commercial centre...
.
Foreign investment contributed significantly to Belgian economic growth in the 1960s. In particular, U.S. firms played a leading role in the expansion of light industrial and petrochemical industries in the 1960s and 1970s.
The older, traditional industries of Wallonia, particularly steel industry, began to lose their competitive edge during this period, but the general growth of world prosperity masked this deterioration until the 1973
1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
and 1979
1979 energy crisis
The 1979 oil crisis in the United States occurred in the wake of the Iranian Revolution. Amid massive protests, the Shah of Iran, Mohammad Reza Pahlavi, fled his country in early 1979 and the Ayatollah Khomeini soon became the new leader of Iran. Protests severely disrupted the Iranian oil...
oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
price shocks and resultant shifts in international demand sent the economy into a period of prolonged recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
. In the 1980s and 1990s, the economic center of the country continued to shift northwards to Flanders with investments by multinationals
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
(Automotive industry
Automotive industry
The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....
, Chemical industry
Chemical industry
The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials into more than 70,000 different products.-Products:...
) and a growing local Industrial agriculture
Industrial agriculture
Industrial farming is a form of modern farming that refers to the industrialized production of livestock, poultry, fish, and crops. The methods of industrial agriculture are technoscientific, economic, and political...
(textile
Textile
A textile or cloth is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by spinning raw fibres of wool, flax, cotton, or other material to produce long strands...
s, food
Food
Food is any substance consumed to provide nutritional support for the body. It is usually of plant or animal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals...
).
The early 1980s saw the country facing a difficult period of structural adjustment
Structural adjustment
Structural adjustments are the policies implemented by the International Monetary Fund and the World Bank in developing countries. These policy changes are conditions for getting new loans from the International Monetary Fund or World Bank, or for obtaining lower interest rates on existing loans...
caused by declining demand for its traditional products, deteriorating economic performance, and neglected structural reform. Consequently, the 1980-82 recession shook Belgium to the core—unemployment mounted, social welfare costs increased, personal debt soared, the government deficit climbed to 13% of GDP, and the national debt, although mostly held domestically, mushroomed.
Against this grim backdrop, in 1982, Prime Minister Martens'
Wilfried Martens
Wilfried Martens is a Belgian politician. He was born in Sleidinge . Martens was the 44th Prime Minister of Belgium from 3 April 1979 to 6 April 1981 and 17 December 1981 to 7 March 1992....
center-right coalition government formulated an economic recovery program to promote export-led growth by enhancing the competitiveness of Belgium's export industries through an 8.5% devaluation. Economic growth rose from 2% in 1984 to a peak of 4% in 1989. In May 1990, the government linked the Belgian franc
Belgian franc
The franc was the currency of Belgium until 2002 when the euro was introduced into circulation. It was subdivided into centimes , 100 centiem or Centime .-History:...
to the Deutsche Mark, primarily through closely tracking German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
interest rates. Consequently, as German interest rates rose after 1990, Belgian rates have increased and contributed to a decline in the economic growth rate. In 1992-93, the Belgian economy suffered the worst recession since World War II, with the real GDP declining 1.7% in 1993. A boost in business investment and exports provided the economy's impetus for recovery.
On May 1, 1998, Belgium became a first-tier member of the European Monetary Union. Belgium switched from the Belgian franc
Belgian franc
The franc was the currency of Belgium until 2002 when the euro was introduced into circulation. It was subdivided into centimes , 100 centiem or Centime .-History:...
to the Euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
as its currency after January 1, 2002. Belgian per capita GDP ranks among the world's highest. In 2008, the per capita income (PPP) was $37,500. The federal government has managed to present balanced budgets in recent years, but public debt remains high, at 99% of 2009 GDP. GDP growth in 2009 was negative at -1.5%.
Trade
About 80% of Belgium's trade is with fellow EU member states. Given this high percentage, it seeks to diversify and expand trade opportunities with non-EU countries. The Belgian authorities are, as a rule, anti-protectionist and try to maintain a hospitable and open trade and investment climate. The European CommissionEuropean Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
negotiates on trade issues for all member states, which, in turn lessens bilateral trade disputes with Belgium.
The Belgian Government encourages new foreign investment as a means to promote employment. With regional devolution, Flanders
Flanders
Flanders is the community of the Flemings but also one of the institutions in Belgium, and a geographical region located in parts of present-day Belgium, France and the Netherlands. "Flanders" can also refer to the northern part of Belgium that contains Brussels, Bruges, Ghent and Antwerp...
, Brussels
Brussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
, and Wallonia are now courting potential foreign investors and offer a host of incentives and benefits. Foreign companies in Belgium account for approximately 11% of the total work force, with the U.S. share at about 5%. Attracted by the EU 1992 single-market program, many foreign firms and lawyers have settled in Brussels since 1989.
Employment
The social security system, which expanded rapidly during the prosperous 1950s and 1960s, includes a medical system, unemployment insurance coverage, child allowances, invalidInvalid
Invalid may refer to:* Patient, a sick person* A person with a disability* .invalid, a top-level Internet domain not intended for real useAs the opposite of valid:* Validity, in logic, true premises cannot lead to a false conclusion...
benefits, and other benefits and pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
s. With the onset of a recession in the 1970s, this system became an increasing burden on the economy and accounted for much of the government budget deficits. The national unemployment figures mask considerable differences between Flanders
Flanders
Flanders is the community of the Flemings but also one of the institutions in Belgium, and a geographical region located in parts of present-day Belgium, France and the Netherlands. "Flanders" can also refer to the northern part of Belgium that contains Brussels, Bruges, Ghent and Antwerp...
and Wallonia. Unemployment in Wallonia is mainly structural, while in Flanders it is cyclical. Flanders' unemployment level equals only half that of Wallonia. The southern region continues a difficult transition out of sunset industries (mainly coal and steel), while sunrise industries (chemicals, high-tech, and services) dominate in Flanders.
Belgium's unemployment rate was 6.5% in 2008. A total of 4.99 million people make up Belgium's labor force. The majority of these people (73%) work in the service sector. Belgian industry claims 25% of the labor force and agriculture only 2%. As in other industrialized nations, pension and other social entitlement programs have become a major concern as the baby boom
Baby boom
A baby boom is any period marked by a greatly increased birth rate. This demographic phenomenon is usually ascribed within certain geographical bounds and when the number of annual births exceeds 2 per 100 women...
generation approaches retirement.
Budget
Although Belgium is a wealthy country, public expenditures far exceeded income for many years, and taxes were not diligently pursued. The Belgian Government reacted with poor macroeconomic policies to the 1973 and 1979 oil price hikes by hiring the redundant work force into the public sector and subsidizing industries like coal, steel, textiles, glass, and shipbuilding, which had lost their international competitive edge. As a result, cumulative government debt reached 121% of GDP by the end of the 1980s. However, thanks to Belgium's high personal savings rate, the Belgian Government financed the deficit from mainly domestic savings, minimizing the deleterious effects on the overall economy.The federal government ran a 7.1% budget deficit in 1992 at the time of the EU's Treaty of Maastricht, which established conditions for Economic and Monetary Union (EMU) that led to adoption of the common Euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
currency on January 1, 2002. Among other criteria spelled out under the Maastricht treaty, the Belgian Government had to attain a budget deficit of no greater than 3% of GDP by the end of 1997; Belgium achieved this, with a total budget deficit in 2001 (just prior to implementation of the Euro) that amounted to 0.2% of GDP. The government has balanced the budget every year since, until 2009 where it ran a deficit of about $25 billion. Belgium's accumulated public debt remains high at 99% of 2009 GDP. A slight decrease in the accumulated public debt compared to GDP has been seen, however, thanks to a higher economic growth rate compared to the budget growth rate, which pushed the percentage from 99% of GDP in 2009 to 95% of GDP in 2011, a four point decrease in two years, a feat rare enough to mention in the Western World.
Regional differences
The economy of Belgium is varied and cannot be understood without taking the regional differences into account. Indeed, Flemish and Walloon economies differ in many respects (consider for instance Eurostats and OECD statistics), and cities like BrusselsBrussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
, Antwerp, Liège
Liège
Liège is a major city and municipality of Belgium located in the province of Liège, of which it is the economic capital, in Wallonia, the French-speaking region of Belgium....
, Bruges
Bruges
Bruges is the capital and largest city of the province of West Flanders in the Flemish Region of Belgium. It is located in the northwest of the country....
, Charleroi
Charleroi
Charleroi is a city and a municipality of Wallonia, located in the province of Hainaut, Belgium. , the total population of Charleroi was 201,593. The metropolitan area, including the outer commuter zone, covers an area of and had a total population of 522,522 as of 1 January 2008, ranking it as...
or Ghent
Ghent
Ghent is a city and a municipality located in the Flemish region of Belgium. It is the capital and biggest city of the East Flanders province. The city started as a settlement at the confluence of the Rivers Scheldt and Lys and in the Middle Ages became one of the largest and richest cities of...
also exhibit significant differences. In general, productivity in Flanders is roughly 20% higher (per inhabitant) than in Wallonia. Brussels' GDP per capita is much higher than either region, although this is in many ways artificial, as many of those that work in the Brussels-Capital Region live in Flanders or Wallonia. Their output is counted in Brussels and not where they live, artificially raising the per capita GDP of Brussels and slightly lowering that of Flanders and Wallonia.
Unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
has remained consistently more than twice as high in Wallonia than in Flanders, and even more in Brussels, during most of the last 20 years (2009, Flanders: 5.0% ; Wallonia: 11.2% and Brussels: 15.9%)
| Rank | NUTS region | 2006 GDP (PPP) per capita in Euro Euro The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,... s |
% of the average GDP of EU27 in 2006 |
|---|---|---|---|
| 1 | Brussels Brussels Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union... |
55,100 | 233.3 |
| 2 | Flemish Region Flemish Region The Flemish Region is one of the three official regions of the Kingdom of Belgium—alongside the Walloon Region and the Brussels-Capital Region. Colloquially, it is usually simply referred to as Flanders, of which it is the institutional iteration within the context of the Belgian political system... |
27,900 | 118.0 |
| 3 | Walloon Region | 20,100 | 85.1 |
Brussels
Being the de facto European capital, its economy is massively service-oriented. It has a number of regional headquarters of multinational corporations. It is also host to a great number of European institutions, in addition to the Belgian federal governmentBelgian federal government
The Cabinet of Belgium is the executive branch of the Belgian federal government, consisting of ministers and secretaries of state drawn from the political parties which form the governing coalition. Formally, the ministers are appointed by the King...
, the government of the Flemish Community
Flemish Community
The term Flemish Community has two distinct, though related, meanings:...
and the government of the French Community
French Community of Belgium
The French Community of Belgium is one of the three official communities in Belgium along with the Flemish Community and the German speaking Community. Although its name could suggest that it is a community of French citizens in Belgium, it is not...
. Brussels also has many commuters, with 230,000 coming from Flanders, and 130,000 from Wallonia. Much of the success of Brussels is based on the high educational skills of its workforce.
Flanders
Port of Antwerp
The port of Antwerp, in Belgium, is a port in the heart of Europe accessible to capesize ships. Antwerp stands at the upper end of the tidal estuary of the Scheldt. The estuary is navigable by ships of more than 100,000 Gross Tons as far as 80 km inland. The inland location means that the port...
was in 2004 the second largest European sea port by cargo volume, and the Antwerp freight railway station accounts for one-third of Belgian freight traffic. Antwerp is the first diamond market in the world, diamond exports account for roughly 1/10 of Belgian exports. The Antwerp-based BASF plant is the largest BASF-base outside Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, and accounts on its own for about 2% of Belgian exports. Other industrial and service activities include car manufacturing, telecommunications, photographic products.
The port of Bruges-Zeebrugge is one of the most important, modern and fastest growing ports in Europe. It is Europe's largest port for RoRo
RORO
Roll-on/roll-off ships are vessels designed to carry wheeled cargo such as automobiles, trucks, semi-trailer trucks, trailers or railroad cars that are driven on and off the ship on their own wheels...
traffic and natural gas. It also is the world's largest port for the import and export of new vehicles. Tourism
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
is also a major component of the economy of Bruges. Due to its pristine medieval city centre, Bruges has become a popular tourist destination. Annually about 2.5 million day tourists visit the city and in 2007 there were about 1.4 million overnight stays.
The port of Ghent
Port of Ghent
The port of Ghent is the third biggest port in Belgium. The first port of Ghent was situated at the Scheldt river and later on at the Lys river. Since the Middle Ages Ghent has sought for a connection to the sea. In the 13th century via the Lieve canal to the Zwin near Damme, in the 16th century...
, in the north of the city, is the third largest port of Belgium. It is accessed by the Ghent-Terneuzen Canal
Ghent-Terneuzen Canal
The Ghent-Terneuzen Canal , also known as the "Sea Canal" is a canal linking Ghent in Belgium to the port of Terneuzen on the Westerschelde estuary in the Netherlands, thereby providing the former with better access to the sea.-History:The canal was constructed between 1823 and 1827 on the...
, which ends near the Dutch
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
port
Port
A port is a location on a coast or shore containing one or more harbors where ships can dock and transfer people or cargo to or from land....
of Terneuzen
Terneuzen
Terneuzen is a city and municipality in the southwestern Netherlands, in the province of Zeeland, in the middle of Zeelandic Flanders. With over 55,000 inhabitants, it is the most populous municipality of Zeeland.-Population centres :...
on the Western Scheldt
Western Scheldt
The Western Scheldt in the province Zeeland in the southwestern Netherlands, is the estuary of the Scheldt river. This river once had several estuaries, but the others are disconnected from the Scheldt, leaving the Westerschelde as its only direct way to the sea. It is an important shipping route...
. The port houses, among others, big companies like Arcelor Gent
Arcelor
Arcelor S.A. was the world's largest steel producer in terms of turnover and the second largest in terms of steel output, with a turnover of €30.2 billion and shipments of 45 million metric tons of steel in 2004...
, Volvo Cars
Volvo Cars
Volvo Car Corporation, or Volvo Personvagnar AB, is a Swedish automobile manufacturer founded in 1927, in Gothenburg, Sweden. It is owned by Zhejiang Geely Holding Group. Volvo was originally formed as a subsidiary company to the ball bearing maker SKF. When Volvo AB was introduced on the Swedish...
, Volvo Trucks
Volvo Trucks
Volvo Trucks is a global truck manufacturer based in Sweden, owned by Volvo Group - AB Volvo it is the world's second largest heavy-duty truck brand....
, Volvo Parts, Honda
Honda
is a Japanese public multinational corporation primarily known as a manufacturer of automobiles and motorcycles.Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's largest manufacturer of internal combustion engines measured by volume, producing more than...
, and Stora Enso
Stora Enso
Stora Enso Oyj is a Finnish pulp and paper manufacturer, formed by the merger of Swedish mining and forestry products company Stora and Finnish forestry products company Enso-Gutzeit Oy in 1998. It is headquartered in Helsinki, and it has approximately 29,000 employees...
. The Ghent University
Ghent University
Ghent University is a Dutch-speaking public university located in Ghent, Belgium. It is one of the larger Flemish universities, consisting of 32,000 students and 7,100 staff members. The current rector is Paul Van Cauwenberge.It was established in 1817 by King William I of the Netherlands...
, the second largest university of Belgium by number of students, and a number of research oriented companies are situated in the central and southern part of the city. Tourism is increasingly becoming a major employer in the local area. Begonias have been cultivated in the Ghent area since 1860. Belgium is the world's largest producer of begonias, planting 60 million tubers per year. Eighty percent of the crop is exported.
Wallonia
In the past, LiègeLiège
Liège is a major city and municipality of Belgium located in the province of Liège, of which it is the economic capital, in Wallonia, the French-speaking region of Belgium....
was one of the most important steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
-making centres in Europe. Starting in 1817, John Cockerill extensively developed the iron and steel industry. The industrial complex of Seraing
Seraing
Seraing is a Walloon municipality of Belgium in Province of Liege. The municipality of Seraing includes the old communes of Boncelles, Jemeppe-sur-Meuse, and Ougrée. With Liège, Herstal, Saint-Nicolas, Ans, and Flémalle it forms the greater Liège agglomeration...
was the largest in the world. Although now a shadow of its former self, steel production and the manufacture of steel goods remain important.
Liège has also been an important centre for gunsmithing since the Middle ages
Middle Ages
The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...
and the arms industry is still strong with the headquarters of FN Herstal. The economy of the region is now diversified, the most important centers are mechanical industries (aircraft engine
Aircraft engine
An aircraft engine is the component of the propulsion system for an aircraft that generates mechanical power. Aircraft engines are almost always either lightweight piston engines or gas turbines...
and Spacecraft propulsion
Spacecraft propulsion
Spacecraft propulsion is any method used to accelerate spacecraft and artificial satellites. There are many different methods. Each method has drawbacks and advantages, and spacecraft propulsion is an active area of research. However, most spacecraft today are propelled by forcing a gas from the...
), space technology, information technology
Information technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
, biotechnology
Biotechnology
Biotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...
and also production of water
Water
Water is a chemical substance with the chemical formula H2O. A water molecule contains one oxygen and two hydrogen atoms connected by covalent bonds. Water is a liquid at ambient conditions, but it often co-exists on Earth with its solid state, ice, and gaseous state . Water also exists in a...
, beer
Beer
Beer is the world's most widely consumed andprobably oldest alcoholic beverage; it is the third most popular drink overall, after water and tea. It is produced by the brewing and fermentation of sugars, mainly derived from malted cereal grains, most commonly malted barley and malted wheat...
or chocolate
Chocolate
Chocolate is a raw or processed food produced from the seed of the tropical Theobroma cacao tree. Cacao has been cultivated for at least three millennia in Mexico, Central and South America. Its earliest documented use is around 1100 BC...
. Liège Science Park
Liège Science Park
Liège Science Park is a business incubator and science park of the University of Liège and is located on the territories of the municipalities of Seraing and Liège .-History:...
south east of the city, near the University of Liège
University of Liège
The University of Liège , in Liège, Wallonia, Belgium, is a major public university in the French Community of Belgium. Its official language is French.-History:...
campus, houses spin-offs
Research spin-off
A research spin-off is a company that falls into at least one of the four following categories:#Companies that have an equity investment from a national library or university#Companies that license technology from a public research institute or university...
and high technology businesses. Liège is also a very important logistic
Logistics
Logistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and...
center: the city possesses the third largest river port in Europe, directly connected to Antwerp, Rotterdam
Rotterdam
Rotterdam is the second-largest city in the Netherlands and one of the largest ports in the world. Starting as a dam on the Rotte river, Rotterdam has grown into a major international commercial centre...
and Germany via the Meuse river
Meuse River
The Maas or Meuse is a major European river, rising in France and flowing through Belgium and the Netherlands before draining into the North Sea...
and the Albert Canal
Albert Canal
The Albert Canal is a canal located in northeastern Belgium, named after King Albert I of Belgium. It connects the major cities Antwerp and Liège and the Meuse and Scheldt rivers. It has a depth of , a free height of and a total length of...
. In 2006 Liège Airport
Liège Airport
Liège Airport , also called Liège-Bierset, is an important cargo airport in Belgium. It was at the end of 2009 the 8th biggest cargo airport in Europe...
was the 8th most important cargo airport in Europe. A new passenger terminal was opened in 2005. It is also the main hub and the headquarter of TNT Airways
TNT Airways
TNT Airways, a subsidiary of TNT Express, is a cargo and passenger airline, operating chartered flights to mainly European destinations...
.
Charleroi
Charleroi
Charleroi is a city and a municipality of Wallonia, located in the province of Hainaut, Belgium. , the total population of Charleroi was 201,593. The metropolitan area, including the outer commuter zone, covers an area of and had a total population of 522,522 as of 1 January 2008, ranking it as...
features an industrial area, iron and steel industry, glassworks, chemicals, and electrical engineering. Charleroi is in the center of a vast coal basin, called Pays noir
Pays Noir
The Pays Noir refers to a region of Belgium, centered on Charleroi in the province of Hainaut in Wallonia so named for the geological presence of coal...
. Many slag heap
Slag heap
A spoil tip is a pile built of accumulated spoil - the overburden removed during coal and ore mining. These waste materials are generally composed of shale, as well as smaller quantities of carboniferous sandstone and various other residues...
s still surround the city. Charleroi is also known for its publishing industry with Dupuis
Dupuis
Éditions Dupuis S.A. is a Belgian publisher of comic books and magazines.Based in Marcinelle near Charleroi, Dupuis was founded in 1922 by Jean Dupuis, and is mostly famous for its comic albums and magazines. It is originally a French language publisher, but publishes many editions both in French...
, one of the main publishers of Franco-Belgian comics
Franco-Belgian comics
Franco-Belgian comics are comics that are created in Belgium and France. These countries have a long tradition in comics and comic books, where they are known as BDs, an abbreviation of bande dessinée in French and stripverhalen in Dutch...
, located in Marcinelle.
See also
- BelgiumBelgiumBelgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
- Commemorative coins of Belgium
- Science and technology in BelgiumScience and technology in BelgiumScience and technology in Belgium is well developed with the presence of several universities and research institutes. As Belgium is a federal state, science is organized at several levels...