Belgium is a trading nation. It is centrally located in Europe, offering access to almost 80% of European purchasing power within a 500 mile radius, and it boasts a dense network of roads, railways, inland waterways, ports and airports. As a result, it is not surprising that many distribution centers are located in Belgium and that the country regularly records a trade surplus (€16.4 billion in 2019).
The logistics sector, which ensures the smooth flow of goods in and out of the country, is vital to the Belgian economy. The extended industry of mobility and transport generates €147 billion per year, representing nearly one-third of Belgian GDP. Belgium ranked third in the World Bank’s 2018 Logistics Performance Index, performing particularly well in timeliness, international shipments and logistics competence, with lower scores for customs and infrastructure. And therein lies the concern.
Despite its reputation as a logistics gateway, significant investment in infrastructure has been lacking in recent years in Belgium, and the country’s transportation networks are reaching the point of saturation. The result? Congestion. In fact, Belgium is the worst student in the EU27 class, with drivers losing almost a full working week in traffic jams every year (only the UK in the EU28 performs worse). Congestion is estimated to cost Belgium 2% of GDP per year.
The congestion issue in Belgium was also noted in the EU’s country-specific recommendations in May 2019, which specifically called out the problems around Brussels and the Ports of Antwerp and Zeebrugge. Congestion not only results in decreased productivity, it also affects our quality of life, making Belgium less attractive for investment and international talent.
Belgium only invests 0.4% of its GDP in mobility, which is the second lowest among OECD countries. In addition to chronic underinvestment, another challenge is the lack of cooperation between the different regions, as mobility is a shared competence. Companies are trying to put in place creative solutions for their employees, such as carpooling schemes, but it can be difficult to navigate the different fiscal and regulatory policies. Innovation should be encouraged.
Mobility patterns are changing – the work-from-home trend, for example, is likely to persist beyond the pandemic – and new technologies are also changing the way we move. As mobility is shaped first and foremost by people’s behavior, data collection and processing is a first step towards understanding the problem and developing solutions.
What Belgium really needs is an integrated mobility strategy. Mobility illustrates well our concerns about country governance: it requires effective coordination between different levels of government, efficient decision-making processes and targeted public investments. To keep people and goods moving, in our 2020 Priorities for a Prosperous Belgium (#PPB20), we urge the newly formed Federal Government to invest in mobility and infrastructure.
AmCham Belgium recommends
To invest in mobility and infrastructure
- Invest in public transport and promote multimodality between private and public transport modes.
- Foster innovation to tackle traffic problems and to implement smart mobility solutions.
- Invest in infrastructure and introduce a fast-track permit procedure for projects of general interest.
Our ambition is for Belgium to achieve a top ten position in the World Economic Forum’s (WEF) Global Competitiveness Index by 2030, up from 22nd today. To climb the ranks, Belgium will need to address its congestion problem in a meaningful way. This is important not only for Belgium to continue attracting logistics investments, but also to put the economy on the path of sustainable growth.
About the author
Optimistic and always willing to discuss legal and economic developments, Gauthier translates expertise from our members to new policy opportunities for the Chamber. He gets his energy from either sports or breakfast.