IntroductionThe nation of Belgium is renowned for its high level of economic prosperity and entrepreneurship, which encourages the extensive influx of private capital in and out of the country. Despite the Global Financial Crisis of 2008/2009, Belgium has been able to withstand significant economic downturns and be able to support its neighboring countries with respect to economic development, prosperity amongst its private sectors and the provision of continued trade options particularly throughout the European Union and across the English Channel to the United Kingdom (Lane, 2013). This paper will, in accordance with the nation’s relatively strong economic state, argue that Belgium needs to further improve and re-develop its public agenda should it be able to sustain further private growth and the appeal of its foreign investors. In supporting this thesis, this paper will expand on the trade, capital flows and migration prospects of Belgium.
Investment Opportunities of Belgium
When considering investment opportunities and strategies in Belgium, there are a number of different factors and requirements that need to be understood in order to preserve capital and to allow international businesses and investors to thrive and to continue to trade with Belgium companies and independents. With respect to trading opportunities, Belgium currently has a greater number of exports than it does imports and there seems to be a higher onus on the nation trading its own products outwards rather than accepting foreign products and attempting to trade in international businesses and companies. Investors need to be cognizant of the fact that Belgium is looking to rely on other nations to invest in rather than allowing international businesses to spread to its main cities and investment centers (Trading Economics, 2015). Millions of dollars of trade is being expanded outwards of Belgium and towards such nations as Germany, France, England and the Netherlands. Belgium products are becoming more prominent in these nations and also more expensive as Belgium restricts its rate of manufacturing and product disclosure in Brussels and other mainland trading centers. Another factor to consider is the balance of trade in Belgium, which also implies a shift towards outward trade rather than the acceptance of foreign businesses and investors (Lane, 2013).
Therefore, the numerous investment options of Belgium are alarming when considering that they are solely focused on private sectors rather than the local business and industrial prospects of Belgium, which are expansive yet unappealing.
The Capital Flows of Belgium
With respect to capital flows, Belgium’s capital flow has slightly decreased over the last five years but still remains strong at just over $2 Billion in capital flow for the current financial year. The highest that Belgium’s capital flow has been is $9 Billion and this was before the Global Financial Crisis and in the early 2000’s. Furthermore, Belgium’s capital flow is heavily reliant on private investment with up to 90% of its capital flow being provided by foreign private investors and deals that have been struck between foreign countries outside of Belgium. Migrations in Belgium also follow a similar trend and are focused on outward migration and dependency on other neighboring nations and their respective economics (Lane, 2013). There is a strong link between foreign investment and migration outside of Belgium.
Therefore, the strong economic and capital flow status of Belgium, despite some recent declines, supports further interest in its local economy and primarily, its expanding industrial and farming business, which with the right amount of government and corporate strategy, can boost the local economy and become a more attractive option to foreign and also local, national investors.
Strengths of Capital Flow and Migration in Belgium
With respect to conducting a SWOT analysis on trade, capital flow and migration in Belgium particularly for foreign investors interested in Belgium, there are a number of strengths. Strengths focus on Belgium’s reliance on private and corporate investment with little emphasis on public interests or organizations. Large banking organizations such as Deutschebank are hwavily invested in Belgium’s finances and commodities. Other strengths focus on Belgium’s positive financial situation and ability to continue inspiring continuous capital flow into the country (Trading Economics, 2013). Its three major investment areas with the largest being Brussels, provides a wealth of opportunities for foreign investors regardless of the intent of the nation to look elsewhere for investment and continuous capital flow. There is also a large flow of migration into the country from tourists and other nations, which neighbor Belgium. The fact that is a member of the European Union promotes the sustainment of trade and investment between German, France and England as well as with Russia (Trading Economics, 2015). Weaknesses associated with Belgium focus on its reliance on foreign investment and lack of trust in its own financial systems whether they are public or private. Furthermore, private industries do rely on some public regulations but with a weakening public sector in Belgium, there is lower confidence in the ability of the government to sustain its GDP and respective Capital flow. Additionally, over the last five years, the GDP and capital flow of Belgium has significantly lowered from $9 Billion to as low as $2 Billion hence indicating that it needs to change its public policies and focus on foreign investment. Solely relying on foreign investment is not a sustainable nor viable long term strategy for financial and economic growth particularly within the European Union. Such economic giants as Germany and France rely on their respective industries, which have the ability to expand throughout the European Union and into such nations as Belgium and the Netherlands (Lane, 2013).
There are however, a number of opportunities for growth and development within Belgium. Its industrial sector continues to grow despite decreasing confidence in the nation’s public financial sector. Furthermore, its known presence within the European Union allows it to further develop economic and trading ties with such nations as Germany, France and England, as previously stipulated in this paper (Lane, 2013).
Risks associated with Belgium focus simply on economic inactivity and over reliance on other nations, which are larger and more prominent than Belgium. Belgium needs to re-develop its public financial sector and also focus more on its industrial sector as a means of further growing its declining GDP and capital flow (Trading Economics, 2013). Currently, Belgium is not in a recession and needs to continually encourage foreign investment but at the same time, maintain a balance between this foreign investment interest and national interests. Belgium is still a prominent nation in the European Union and requires additional financial strategies and advice to maintain this status.
Therefore, this paper has supported the primary thesis that Belgium still harbors an extensive local and national economy that can provide its government with suitable revenue. There needs to be specific change strategies implemented that can assist the nation in re-developing its national agenda and ensuring that it continues to expand and develop into the future. With change and a greater focus on governmental initiatives, Belgium can start prospering on a local level and be able to supports its population rather than mainly, the interests of its foreign investors.
- Lane, P. (2013). European Economy – Capital Flows in the Euro Area. Economic and Financial Affairs, Retrieved from http://ec.europa.eu/economy_finance/publications/economic_paper/2013/pdf/ecp497_en.pdf Accessed on 27th September 2015.
- Trading Economics. (2015). Belgium Capital Flows. Trading Economics, Retrieved from http://www.tradingeconomics.com/belgium/capital-flows Accessed on 27th September 2015.