Belgium: Worlds 15th most competitive economy

by Dr. Noor Ahmed Memon

Belgium is a highly developed market economy, belongs to the Organization for Economic Cooperation and Development (OECD), a group of leading industrialized democracies. In 2011, the GDP was estimated to be US $412 billion. With a population of 10.4 million, Belgian per capita GDP ranks among the worlds highest. Densely populated Belgium is located at the heart of one of the world's most highly industrialized regions. The first country to undergo an industrial revolution on the continent of Europe in the early 1800s, Belgium developed an excellent transportation infrastructure of ports, canals, railways, and highways to integrate its industry with that of its neighbors. One of the founding members of the European Community (EC), Belgium strongly supports strengthening the powers of the present-day European Union to integrate European economies further. With exports and imports approximately equal to GDP, Belgium depends heavily on world trade. Belgium owes its trade advantages to its central geographic location and a highly skilled, multilingual, and productive work force.

Table 2: Pak - Belgium Trade Balance (Value: US$ million) Year

2007-08 2008-09 2009-10 2010-11

Export
329 316 359 501

Import
251 286 266 274

Balance of Trade
+ 78 + 30 + 93 + 227

Source: State Bank of Pakistan.

Belgian Textile Machinery

According to the World Economic Forum ranked Belgium is ranked as 15th place out of 142 countries. During the year 2011 Belgium stood among the worlds most competitive countries, despite the on-going political stalemate. Belgium scored highly concerning its management of inflation as well as its attractiveness for talented employees. The business environment also ranked well. Doing business in Belgium is nowadays not only less complex and faster than in a number of other European countries, but it is also easier to finance an enterprise by local investors or through local capital markets. This modern, open, and private-enterprise-based economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the more heavily-populated region of Flanders in the north. With few natural resources, Belgium imports substantial quantities of raw materials and exports a large volume of manufactures, making its economy vulnerable to volatility in world markets. Roughly three-quarters of Belgium's trade is with other EU countries, and Belgium has benefited most from its proximity to Germany. In 2011 Belgian GDP grew by 2.0%, the unemployment rate decreased slightly to 7.7% from 8.3% the previous year, and the government reduced the budget deficit from a peak of 6% of GDP in 2009 to 4.2% in 2011. Despite the relative improvement in Belgium's budget deficit, public debt hovers near 100% of GDP, a factor that has contributed to investor perceptions that the

country is increasingly vulnerable to spill over from the euro-zone crisis. Belgian banks were severely affected by the international financial crisis in 2008 with three major banks receiving capital injections from the government, and the nationalization of the Belgian arm of a Franco-Belgian bank. An aging population and rising social expenditures are mid- to long-term challenges to public finances. Table-1 shows facts about Belgium.

Table 3: Export from Pakistan to Belgium Value : US$ 000 Product

Raw Cotton Cotton Yarn Cotton Fabrics Knitwear Fabrics Readymade Garments Knitwear Textile Made-ups Bedwear Towels Tent and Canvas Synthetic Textiles Rice Leather Garments

2010-11
11,508 11,996 70,309 144 124,481 83,075 10,315 145,449 19,757 726 20,745 38,392 21,916 4,554 3,381 23,574 1,083 4,684 94,788 501,301

2009-10
-8,471 50,529 100 90,169 45,667 -98,086 12,014 254 9,160 20,241 20,358 3,470 1,631 18,636 921 3,974 24,471 359,210

Table 1:Facts about Belgium Description

GDP (US$ billion) GDP per Capita (PPP) (US $) Inflation rate (%) Exports (US$ billion) Imports (US$ billion)

Leather Glovers

2011
412 37,600 3.1% 332.0 332.4

2010
403.9 27,000 2.3% 282.3 284.6

Footwear Sports Goods Carpet and Rugs Surgical Instruments All others Total

Source: Trade Development Authority of Pakistan.

56 PTJ September 2012

Textile Machinery
The Belgian machinery industry, including its textile machinery, is the fastest growing industrial sector measured by employment in Belgium. In the past 5 years an annual growth rate of 4.5% was achieved in this sector, while its world market share rose by 10%. An important driving force for that performance was the doubling of investments in the machinery industry over the 1998-2011 periods. The Belgian machinery industry is the nations 3rd largest exporter. The Belgian textile technology industry counts 45 companies with a total turnover of nearly 1 billion euro and employment of over 4000. Its companies are active in machinery for indoor textiles (carpet, upholstery, velvet, table bed linen etc.), garment textiles, technical textiles and textile finishing.

Table 4: Import of Textile Machinery from Belgium to Pakistan (Major Items) (Value : Rs .000) Machinery
Carding Machines Combing Machines Textile Doubling Machines Weft Weaving Machines Weaving Machines (Looms) Weaving Machines (Shuttleless) Flat Knitting Machines Multi Head Embroidery Machines Circular Knitting Machines Dobbies Jacquard Machines Card Clothing Spindles Textile Machines Reeds for Looms Healds and Healds Machinery

unit
No No No No No No No No No No Kg Kg Kg Kg

2010-11 Quantity
2 5 6 -8 368 6 -2 12 36 --22,834

2009-10 Quantity
3 -5 5 -875 1 1 --167 8 284 5,949

Value
3,501 7,495 13,350 -8,374 1,463,807 1,782 -2,956 54,176 76 --33,705

Value
8,361 -4,951 2,734 -1,148,908 211 2,405 --311 29 160 5,021

Belgian Textile Machinery

Pak-Belgium Trade

During the past four years Parts of Weaving Machines Kg 20,655 45,185 22,580 26,876 exports and imports between Pakistan and Belgium has Other Parts Kg 9,615 18,338 11,195 20,589 increased, but the rise in Source: Federal Bureau of Statistics, Government of Pakistan exports has been faster than the imports. The balance of global textiles supply chain, countries having efficient processes trade had remained in favour of Pakistan, which increased from US $78 million in 2007-08 to US $227 million in 2010-11. Table- and latest technology would survive. Belgium textile machinery sales in Pakistan for 2010-11 are 2 shows Pak-Belgium trade balance. Cotton fabrics and yarn, readymade garments, towels, divided into spinning, finishing, weaving, accessories and knitting. hosiery, bed-wear, carpet and rugs, cotton, leather, sports goods Major items export of textile machinery from Belgium to Pakistan and surgical instruments are the major items exported from are given in Table-4 Pakistan to Belgium. Statistics pertaining to the export of textile Pakistan-Belgium Business Forum (PBBF) was formed in April, and other items from Pakistan to Belgium is given in Table-3. 1997 with 14 founder members under the patronage of Royal The global textiles and clothing trade had increased substantially in post quota regime, however, competition has also been increasing among textiles and clothing producing countries. In Belgian Embassy. The objectives are to encourage and promote business ties, mutual understanding and friendly relations between the business communities of the two countries.

PTJ September 2012 57

Belgian Textile Machinery

58 PTJ September 2012