World Economic Forum report: Belgium’s strengths and weaknesses
Thursday, 18 October 2018
This year Belgium finished 21st in the international competitiveness ranking of the World Economic Forum (WEF). Based on last year’s 19th place finish, out of a total of 140 countries, this is a signal the country is losing its competitiveness.
Unfortunately, this downward trend is not new. In 2011, Belgium finished 15th in the annual WEF ranking. Since then, it has been gradually falling behind as more countries that surpass it in terms of competitiveness.
In the WEF report, Belgium appears to have two faces, combining some strong assets and compelling liabilities.
The ranking is based on a total of 110 indicators – from life expectancy and educational attainment through the efficiency of public administration and the quality of the infrastructure to the tax environment and the innovative capacity of companies. It is based on a mix of objective data and the results of a survey among business leaders.
Creditworthiness: Its strongest point is what the WEF describes as “macroeconomic stability”. It shares first place in this respect with 30 other countries that achieve the same score. These are indicators such as inflation and creditworthiness.
Education: Among Belgian’s plus points are the educational level of the population (Belgians with university studies are number 8 in terms of knowledge and skills) and the cooperation among companies and universities in terms of innovation (number 12).
Ports: Belgium has with an excellent port infrastructure and top class logistics services (10th place). However, the Netherlands is doing much better and is number 2 with its ports.
Taxes: Not surprisingly, the taxes (and social security contributions) on labour that employers in Belgium have to pay are among the highest in the world. If it is a comfort: in France they are even higher.
Flexibility: Not surprisingly, the labour market in Belgium is not among the most flexible in the world. On the contrary, Belgium stands at 115 (out of 140) in terms of rules and procedures for the recruitment and dismissal of employees, and 106 in terms of free wage formation. When it comes to simple hiring and firing, Belgium is below Trinidad.
Starting a business: Worldwide, there are 61 countries where the cost of starting a business is lower than Belgium’s. Macedonia leads in that category
Entrepreneurship: The passion for entrepreneurship – the degree of entrepreneurship – can also improve. Belgium is in 27th place. By way of comparison: Germany, the Netherlands, Sweden and the United Kingdom are in the top ten.
IT applications: Belgium is only in 40th place when it comes to the use of the most modern IT applications. The first in that grouping is South Korea.
E-government: It seems the extent to which Belgian authorities inform citizens and businesses and allow them to participate via e-government could impove. In the WEF report, Belgium is in 58th place. This puts it on equal footing with Albania. Denmark and Finland are at 1 and 2. The federal minister of Digital Agenda, Alexander De Croo (Open VLD), yesterday withheld comment on the e-governemnt section of the WEF report. “We are first going to analyse the report properly,” said a spokesperson for the De Croo cabinet.
Bureaucracy: Belgian companies often complain loudly about the many administrative burdens and regulation they face. Belgium is ranked at 92, one place better than Moldova. It could be worse: Italy is 136th in this category.
Roads and trains. Belgium has the dubious honour of standing no. 52 in the WEF report regarding the quality of its motorway network, just behind Mauritius. Belgium’s railway (efficiency, price, punctuality and frequency) failed to impress, finishing 41, worse than Kazakhstan, for example.