Speech 5th Economic Forum Belgium-Luxemburg-Arab Countries
Mister Ambassador (of Iraq),
Excellencies,
Ladies and Gentlemen,
There is an Arab saying which states that “If a pot is cooking, the friendship will stay warm.” In the relations between Belgium and the Arab countries, this “metaphorical pot on the stove” is our history of shared economic projects.
I myself have been the fortunate recipient of hospitality in the Arab countries on many occasions, with visits to Jordan, Egypt, Lebanon, Libia, Palestine and Iraq. First as senator, later as Minister of Economy, often in the company of his Royal Highness Prince Filip. Last month we headed an important economic mission to Saudi Arabia and the United Arab Emirates together. With both the Prince and I now sporting beards, we felt even more welcomed by our Arab friends…
I have a very distinct memory of my very first economic mission in the region, a visit to the new library of Alexandria: this is a building deeply rooted in history, yet proudly and boldly looking towards the future. A sure sign of the potential of the region.
We have other examples of this link between the past and the future. Such as Heliopolis, a suburb of Cairo, dreamt and constructed by great industrial and baron Edouard Empain a hundred years ago.
Our present-day Empain is Johan Beerlandt, chairman of the Arab-Belgium-Luxemburg Chamber of Commerce and CEO of Besix, the largest construction company of Belgium, top 50 in the world. Besix was actually founded 100 years ago, in 1909, when Empain was constructing his visionary Heliopolis. Besix is now constructing the building of the future in the region: Burj Dubai, the tallest tower in the world.
These and many other joint projects ensure that the “pot” between Arab countries and Belgium is still cooking and that the friendship will remain warm for a long time to come.
Ladies and gentlemen,
The last time I was invited to speak at your chamber was in June 2008, more than a year ago. What a difference a year makes. In the meantime, the world has had to weather one of the most severe financial and economic crises of the last hundred years. A crisis that has not spared the Arab countries either.
In Belgium, as in the rest of the Eurozone countries, we are now witnessing the first signs of recovery, the so-called “green shoots”. But the situation in our companies is still very difficult. With only slow recovery of the export markets. And much more restricted access to credit. That is why we have decided to prolong a number of measures of the Belgian Recovery Plan, such as the reduction of value added taxes on home construction or the possibility of temporary suspension of employment contracts. And we have introduced additional stimulus measures, such as lowering of VAT for restaurants.
The economic crisis has had a severe impact on government finances as well. With a large and growing deficit for this year, and an uphill climb to reach a new fiscal equilibrium by 2015.
While combating the after-effects of the crisis, we must simultaneously lay the foundations of a new sustainable model of economic growth. The past engines of easy growth, such as the financial industry or the credit fuelled American consumer boom, are not set to make a fast comeback. We therefore face the challenge of finding new and innovative sources of growth.
I believe the Arab countries also must prepare themselves for this transformation. Of course, the macro-economic environment is very different. Some Arab countries can still rely on the revenues from the oil industry as “shock absorbers”. And while Belgium must find resources to pay for its ageing population (median age is already over 41), most Arab countries have the inverse problem of creating sufficient employment for its growing young population (median age in Egypt or Saudi Arabia is 24!).
However, for Belgium and Arab countries alike, the winners of tomorrow will be those that have a well diversified economy, based on innovative and sustainable products and services. The past has shown that reliance on one industry, be it oil or finances, makes a national economy extremely vulnerable for external economic shocks.
To ensure that Belgium is in a better position when the next storm arrives, we have launched a series of initiatives to ensure that Belgium becomes “greener, fitter and smarter”. I want to take a couple of moments of your time to explain what I mean by this.
To build a “greener” economy, we must gradually introduce environmental taxation which ensures that the true cost of producing a product or service is included in the consumer price. For instance, in our last budget exercise we introduced measures affecting company cars to ensure that employees would take into account the CO2 emissions when selecting the most appropriate company car. In terms of subsidies, we must focus on those technologies that create the biggest bang for the buck. Solar panels are great and very popular in Belgium, but are not efficient if they are placed on a roof which is not isolated.
To make available the resources to pay the costs of an ageing population, we must ensure that the government becomes fitter and more flexible. Belgium has a lot of civil servants, 33% more than the average OECD country. Most of them do a great job. But if we give them the proper tools and invest in ICT, we can ensure that they deliver an even better job with less people and at a lower cost. The federal government has accepted this challenge and embarked upon an efficiency programme that is set to reduce the number of civil servants by 20% over the next 10 years. Hopefully this will also improve the administrative decision making process.
And here, we can take an example from the Arab countries where for instance public construction projects get realized much faster. Johan Beerlandt as CEO of Besix will know this all too well: as part of the BAM consortium that was supposed to build a grand new bridge in Antwerp that was, after 10 years of planning, stopped by bureaucracy, protests and finally a referendum. On the other hand, I recently inaugurated a water purification project of GDF Suez in Marafiq, that provides drinking water for 5,5 million people and that was realized in half a year. Or what about the example of the King Abdullah University of Science: planned and built in 3 years. A “fitter” government in my view, also means a government that can take and implement decisions in a reasonable amount of time.
Lastly, the Belgian economy must become “smarter”. From ICT companies to ICT in every company. There are still important opportunities for productivity gains through increased and smart use of ICT. I have recently launched the Digital Plan for Belgium for the next 5 years, with 30 measures to become more competitive. For example, by connecting more of our citizens to the internet. By introducing internet schools, where all children have laptops as an educational tool rather than an educational goal. By stimulating the growth of mobile internet, the next ICT revolution. By installing Fiber-to-the-home or superfast internet to new constructions, etc.
In launching these initiatives at this moment, we try to ensure that we do “not waste a good crisis” and that we turn the crisis into an opportunity for achieving a more flexible and creative economy.
Ladies and gentlemen,
As always, it was a pleasure to talk to you today. To discuss the mutual ties of friendship. And the initiatives we are taking to ensure that in Belgium the pot will continue to cook on the stove for Arab and other investors. We have much to learn from each other and I look forward to my next visit in one of the Arab countries. Our Crown Prince Filip is leading an economic mission to Marocco next week, to ensure that the lesson continues.
Thank you.
