This year’s Global Competitiveness Report by the World Economic Forum (WEF), published on September 5, shows a decline in Belgium’s competitiveness. It now ranks 17th, down from 15th place in 2011. Despite this drop, Belgium is praised in several important areas, such as innovation and education.
Despite dropping two spots, Belgium remains in the top 20 of most competitive countries. Its higher education system stands among the best, ranked fourth in the world. In particular, Belgian universities receive praise for their math and science programs. Moreover, Belgium demonstrates a high capacity for innovation (11th place), which is important for attracting investment and overall economic development. But all of these positive factors must be weighed against an exceptionally burdensome tax system, poor labor market efficiency and the dismal state of public finances.
It is not only Belgium’s universities which rank highly. Its primary education system is the second best in the world, and the country is renowned for its top-notch management schools. In addition, the Belgian goods market is praised for its local competition level (4th) and as an environment which is characterized by professionalism and friendliness toward the creation of new business (8th).
However, Belgium’s macroeconomic environment is not the most favourable due to the high level of public debt and heavy deficit spending. Specifically, the country needs to improve its:
• exceptionally burdensome tax system (140th);
• labor market efficiency (50th), where it does worse than The Netherlands (17th) but better than France (66th) and Germany (55th);
• and government inefficiency (55th).