Country profile - (Belgium)
Belgium enjoys a high standard of living and a high per capita income. In the yearly UN Human Development Report, Belgium is consistently ranked among the countries with the highest human development index. There are large differences in wealth and poverty in Belgium. However, the social welfare programmes prevent extreme poverty.
The Belgian social welfare system covers family allowance, unemployment insurance, pensions, medical benefits, and a programme that provides salary in case of illness. Employers and workers contribute to the system. Many companies also offer supplementary retirement and medical programmes. Almost all citizens are covered by medical insurance.
Each region has special councils that provide public assistance and aid to the poor. Housing societies provide low-income housing for the poor and immigrants. Policies to eliminate slums and revitalise urban neighbourhoods are also in place.
Overall, Belgium's educational system (community competence) is of good quality. Freedom of education is a constitutional right. Both public and private schools exist, but the community governments has subsidised private schools since the legal system abolished fees in 1958. Children must attend school between the ages of 6 and 18. The country has seven universities (four that teach in French and three that teach in Dutch). There are also a number of specialised and technical schools.
Belgium's economic strength is based on its geographic position at the crossroads of Western Europe, its highly skilled and educated workforce, and its participation in the EU.
For most of its history, Belgium's economy was based on its manufacturing capabilities. Belgium was the first country in continental Europe to undergo the industrial revolution, and through the 19th century it was a major steel producer. Large coal deposits helped industrialisation. At the same time, agriculture began to decline. This decline was even more pronounced after World War II, and by 2000, agriculture only accounted for a small percentage of the economy. In the post-World War II era, heavy manufacturing and mining declined. However, there was significant growth in the service sector, and the country switched from heavy production to light manufacturing and began producing finished products instead of steel, textiles and raw materials. Belgium imports basic and intermediary goods, adds value to them through advanced manufacturing, and then exports the finished products. With the exception of the remaining coal resources, Belgium has no significant natural resources.
The oil crisis of the 1970s and economic restructuring led to a series of prolonged recessions. The 1980-82 recession was particularly severe and resulted in massive unemployment. Meanwhile, the main economic activity shifted northward into Flanders. In 1990, the government linked the Belgian Franc to the German mark through interest rates. This spurred a period of economic growth. In 1992-93, another recession plagued Belgian history. During this period, the real GDP declined by 1.7 %. Foreign investments have provided new capital and funds for businesses and have consistently helped maintain the economy. Since Brussels is considered to be the de facto capital of the EU, many multinational firms have relocated to the city.
There have been major regional differences in the country’s economic development. In the former industrial and agricultural areas, unemployment rates tend to be higher, while they tend to be lower in the newer urban centres (where the service economy is dominant). Nevertheless, overall national unemployment rates continue to be lower than the EU average. In 1993, in an effort to give the regions greater flexibility to deal with economic problems, each region was given broad economic powers to control trade, industrial development, and environmental regulation.
The government has also privatised many companies that were formally owned by the state.
As the profitability of many industries declined in the post-World War II era, the government attempted to support them in order to maintain employment. Among the strategies used were subsidising certain industries, mainly steel and textile companies. In addition, the government reduced interest rates and offered tax incentives and bonuses to attract foreign businesses. All of these measures helped maintain the economy by preventing massive unemployment, but they also led to drastic government deficits in the 1970s and -80s. By the 1990s, successive governments diligently worked to reduce the debt.
Belgium was one of the founding members of the European Community (now EU), and has been one of the foremost proponents of regional economic integration. In 2000, 80 % of Belgium's trade was with other EU Member States. Membership in the EU was the culmination of longstanding national support for economic cooperation. For instance, in 1921, Belgium joined with Luxembourg to form the Belgian-Luxembourg Economic Union (BLEU). This organisation oversaw cross-border trade between the three nations. Belgium is also a member of the Organisation for Economic Co-operation and Development (OECD).
Belgium became highly urbanised and densely populated
Figure 2: Evolution degree of surface impermeability Brussels and surroundings (1955-2006)
- Data source
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Belgium has become highly urbanised and densely populated (2008: 349,4 inh/km2 overall, 455,7 for the Flemish Region, 205,2 for the Walloon Region, and 6496,9 for the Brussels-Capital Region), soil sealing increased and urban sprawl around major cities expanded. As a result, commuting (distance) increased. For instance, in the Brussels-Capital Region, about 53 % of the 680 000 employments are occupied by people living in the two other regions (2007).
More than 60 % of the commuters use their car to go to work.
Urbanisation results among others in increased soil sealing of the territory. This impermeability of soil has notable environmental impacts: reduced water provision for ‘phreatic water tables/surfaces’ and aquifers, restricted development of vegetation (which involves impacts on biodiversity, well-being, micro-climate) and increased flood risk.
The results of a study concerning the evolution of soil impermeability in and around the Brussels-Capital Region, based on spatial analysis and remote sensing, illustrates the magnitude of the phenomenon.
For Brussels and surroundings, the proportion of impermeable surfaces increased from 26 % in 1955 to 47 % in 2006.