Belgium is located in the center of Western Europe security and political institutions, with the central of both North Atlantic Treaty Organization (NATO) and the European Commission (EC) located in the country’s capital, Brussels. Belgium economy is mainly export-driven, with Belgian firms taking advantage of economic integration in European Union. Since joining the EU at the very beginning of its existence, Belgium has been leading in initiatives taken towards European integration. These initiatives are a reflection of its own federal and multi-lingual heritage (the Kingdom of Belgium has three official languages: Dutch, French, and German). Therefore Belgium provides profitable climate for external entrepreneurs, with federal and regional governments encouraging foreign investment. The country had FDI stock of $1.01 trillion as of 2012, according to UNCTAD* and almost 30% of the top 3,000 companies operating in the country are of foreign origin. Further, according to the Index of Economic Freedom 2013, Belgium’s economic freedom score is 69.2, which makes it the 40th freest economy in the world.
Belgium possesses one of the best infrastructure networks in Europe. As it is located in the center of the continent, the country is known as the natural gateway to Europe. Belgium also possesses high density telecommunications and transportation infrastructure. Moreover Belgium ranked seventh among 155 countries in the World Bank’s Logistics Performance Index in 2012 (it was ahead of major economies such as the US and France). Most of the main European highways cross Belgium, and it have the densest network of railways in the continent. Belgium has very well-developed water transport facilities, with the port of Antwerp (the second largest seaport in Europe), Zeebrugge, Ghent, and the inland ports of Liege and Brussels. Additionally, the ports are fully integrated with the road and rail networks, which provide effective multi-modal transport. The air connectivity of Belgium is also among the best, with the country having the fifth largest cargo airport in Europe and the fastest air cargo handling and distribution center in the European Union.
Research and Development
The private sector in Belgium has more involvement in R&D than in other European countries. Research activity is concentrated in chemicals pharmaceuticals and computer science. Furthermore, foreign companies have been spending more on R&D than domestic firms and around 54% of private sector expense comes from foreign companies. Because of the propitious R&D environment it offers Belgium has retained its attractiveness as an investment destination. Its strong intellectual property rights system contributes to R&D practices, and the country has drawn immense benefits from private companies involved in industrial research. Recent policies such as The Policy Note 2009–14 on Scientific Research and Innovation is a step towards creating a good environment for research and development. Furthermore, the adoption of Marshall Plan 2.Green reflects the increasing thrust towards R&D in the country. These measures have improved the innovation climate, encouraging R&D enterprises to invest in Belgium.
Exports and imports
Belgium’s trade is strongly inclined toward its partners from EU. On the export side, the EU markets are more than three quarters of Belgium total exports, with the the biggest share of countries from the eurozone. Germany is Belgium’s single largest export destination, absorbing around 18.7% of exports in 2011. France (16.9%), the Netherlands (12.5%), and Italy (4.6%) are other important for Belgium export markets. Of the EU countries outside the eurozone, the UK’s 7.2% share is the most significant, making it Belgium’s fourth largest export market. Outside the EU, the US is Belgium’s largest export market, absorbing approximately 4.5% of total exports. In the other hand The Netherlands is the largest exporter to Belgium, and its 19.9% share reflects the success of the longstanding single market area linking the two countries and Luxembourg since the late 1950s. Germany is the second largest import market, accounting for 15% of total imports. Other key countries include France (10.8%), the UK (6.0%), the US (5.3%), and Ireland (4.5%). Total imports amounted to $575.60 billion in 2011, while total exports amounted to $599.11 billion.
* The United Nations Conference on Trade and Development