PESTEL Analysis Of Belgium Politics Essay

Belgium is situated in northwestern Europe. Belgium has an area of 30510 sq km. Comparatively the area occupied by Belgium is about same as the state of Maryland. It is a founding member of the European union. It has a population of 10.8 million. Upon its independence Belgium eagerly participated in industrial revolution & during the 20 th centuary possessed a number of colonies in Africa. In Belgium people speak flemin & French languages. Belgium shares its border with france, nethrelands, Luxembourg & germany. The best restraints in Belgium are situated at Michelin guide. Tongeren is the oldest city in Belgium. It has more than three thousand castels , three hundred of which are open for public to visit. There are many hotels in Belgium which are build from old buildings & hold historical charm & elegance. It has maritime climate which has cold winters & warm summers. Belgium has been steadily growing as tourist heaven, having some of the most beautiful landscapes & interesting attractions in Europe.

ECONOMIC FACTORS: Belgium is among the most highly industrialized countries in Europe. It is lacking in natural resources, it imports raw materials in great quantity and processes them largely for export. Exports equal around two thirds of GDP, and about three-quarters of Belgium’s foreign trade is with other EU countries.

Belgium’s highly developed transportation systems are closely linked with those of its neighbours. Its chief port, Antwerp, is one of the world’s busiest. Belgium has a highly skilled and productive workforce, and the economy is diversified. By 2002, the service sector accounted for approximately 70% of GDP, followed by manufacturing (25%) and agriculture (2%).

Real growth averaged 5.4% annually during 1967-73 but, slumped to 2.5% during 1973-80, and 0.7% during 1981-85. It averaged 2.6% during 1984-91 and was 2.3% in 1995. By 1998, real growth stood at 2.8%. Economic growth was expected to rise to some 3% in 2004 as a result of a recovery from the global economic downturn existing in 2001-03 (GDP growth in 2001 was estimated at 1.1%).

In 1993, when Belgium became a federal state with three distinct regions (Flanders, Wallonia, and Brussels), substantial economic powers were given to each region, such as jurisdiction over industrial development, research, trade promotion, and environmental regulation. Belgium has been seen as a “laboratory state,” in that its federal system might stand as a precursor to a more unified EU based on regional divisions.

A UN study in 2002 listed Belgium as having the fourth-highest standard of living in the world. However, being a highly taxed and indebted country, some businesses have stated Belgium stifles private enterprise. Belgium in 2003 had had a balanced budget since 2000, the first in 50 years.

Its location is at the heart of a highly industrialized region helped make it the world’s 15th largest trading nation in 2007. Its main imports are raw material , machinery & equipments, chemicals ,raw diamonds metals, food stuffs, transportation equipments, oil products. Its main exports are machinery & equipment, chemicals, finished diamonds, metal & metal products.

POLITICAL FACTORS: Belgium is a constitutional, popular monarchy and a parliamentary democracy.

The federal bicameral parliament is composed of a Senate and a Chamber of Representatives. The former is made up of 40 directly elected politicians and 21 representatives appointed by the 3 Community parliaments, 10 co-opted senators and the children of the king, as Senators by Right who in practice do not cast their vote. The Chamber’s 150 representatives are elected under a proportional voting system from 11 electoral districts. Belgium is one of the few countries that has compulsory voting and thus holds one of the highest rates of voter turnout in the world.

The King (currently Albert II) is the head of state, though with limited prerogatives. He appoints ministers, including a Prime Minister, that have the confidence of the Chamber of Representatives to form the federal government. The numbers of Dutch- and French-speaking ministers are equal as prescribed by the constitution. The judicial system is based on civil law and originates from the Napoleonic code.

A rainbow coalition’ emerged from six parties: the Flemish and the French-speaking Liberals, Social Democrats, Greens. Later, a ‘purple coalition’ of Liberals and Social Democrats formed after the Greens lost most of their seats in the 2003 election. The government led by Prime Minister Guy Verhofstadt from 1999 to 2007 achieved a balanced budget, some tax reforms, a labour-market reform, scheduled nuclear phase-out and instigated legislation allowing more stringent war crime and more lenient soft drug usage prosecution. Restrictions on withholding euthanasia were reduced and same-sex marriage legalized.

Verhofstadt’s coalition fared badly in the June 2007 elections. For more than a year, the country experienced a political crisis.This crisis was such that many observers speculated on a possible partition of Belgium. From 21 December 2007 until 20 March 2008 the temporary Verhofstadt III Government was in office. This coalition of the Flemish and Francophone Christian Democrats, the Flemish and Francophone Liberals together with the Francophone Social Democrats was an interim government until 20 March 2008. On that day a new government, led by Flemish Christian Democrat Yves Leterme, the actual winner of the federal elections of June 2007, was sworn in by the king. On 15 July 2008 Leterme announced the resignation of the cabinet to the king, as no progress in constitutional reforms had been made. In December 2008 he once more offered his resignation to the king after a crisis surrounding the sale of Fortis to BNP Paribas. At this juncture, his resignation was accepted and Flemish Christian Democrat Herman Van Rompuy was sworn in as Prime Minister on 30 December 2008.

After Herman Van Rompuy was designated the first permanent President of the European Council on 19 November 2009, he offered the resignation of his government to King Albert II on 25 November 2009. A few hours later, the new government under Prime Minister Yves Leterme was sworn in. On 22 April 2010, Leterme again offered the resignation of his cabinet to the king after one of the coalition partners, the OpenVLD, withdrew from the government, and on 26 April 2010 King Albert officially accepted the resignation. The Parliamentary elections in Belgium on 13 June 2010 saw the Flemish separatist N-VA become the largest party in Flanders, and the Socialist Party PS the largest party in Wallonia. Belgium has since then been governed by Leterme’s lame duck government awaiting the end of the currently deadlocked negotiations for formation of a new government.

SOCIAL FACTORS: in the 19th century it was necessary to speak French to belong to the governing upper class, and those who could only speak Dutch were effectively second-class citizens.] Late that century, and continuing into the 20th century, Flemish movements evolved to counter this situation. While the Walloons and most Brusselers adopted French as their first language, the Flemings refused to do so and succeeded progressively in imposing Dutch as Flanders’ official language. Following World War II, Belgian politics became increasingly dominated by the autonomy of its two main language communities. Inter communal tensions rose and the constitution was amended in order to minimise the conflict potentials.

Based on the four language areas defined in 1962-63 (the Dutch, bilingual, French and German language areas), consecutive revisions of the country’s constitution in 1970, 1980, 1988 and 1993 established a unique federal state with segregated political power into three levels:

The federal government, based in Brussels.

The three language communities:

the Flemish Community (Dutch-speaking);

the French Community (French-speaking);

the German-speaking Community.

The three regions:

the Flemish Region, subdivided into five provinces;

the Walloon Region, subdivided into five provinces;

the Brussels-Capital Region.

The constitutional language areas determine the official languages in their municipalities, as well as the geographical limits of the empowered institutions for specific matters. Although this would allow for seven parliaments and governments, when the Communities and Regions were created in 1980, Flemish politicians decided to merge both. Thus the Flemings just have one single institutional body of parliament and government is empowered for all except federal and specific municipal matters.

state-owned companies include the Belgian Post Group and Belgian Railways. The Federal Government is responsible for the obligations of Belgium and its federalized institutions towards the European Union and NATO. It controls substantial parts of public health, home affairs and foreign affairs. The budget-without the debt-controlled by the federal government amounts to about 50% of the national fiscal income. The federal government employs around 12% of the civil servants.

Communities exercise their authority only within linguistically determined geographical boundaries, originally oriented towards the individuals of a Community’s language: culture (including audiovisual media), education and the use of the relevant language. Extensions to personal matters less directly connected with language comprise health policy (curative and preventive medicine) and assistance to individuals (protection of youth, social welfare, aid to families, immigrant assistance services, etc.)

In several fields, the different levels each have their own say on specifics. With education, for instance, the autonomy of the Communities neither includes decisions about the compulsory aspect nor allows for setting minimum requirements for awarding qualifications, which remain federal matters. Each level of government can be involved in scientific research and international relations associated with its powers. The treaty-making power of the Regions’ and Communities’ Governments is the broadest of all the Federating units of all the Federations all over the world.

TECHNOLOGICAL FACTORS: Industrial warfare is a period in the history of warfare ranging roughly from the early Nineteenth Century and the start of the Industrial Revolution to the beginning of the Atomic Age, which saw the rise of nation-states, capable of creating and equipping large armies and navies through the process of industrialization.

The era featured mass-conscripted armies, rapid transportation (first on railroads, then by sea and air), telegraph and wireless communications, and the concept of total war. In terms of technology, this era saw the rise of rifled breech-loading infantry weapons capable of massive amounts of fire, high-velocity breech-loading artillery, armoured warfare, metal warships, submarines, and aircraft.

ENVIORNMENTAL FACTORS:

Belgium is shared between the Atlantic European and Central European provinces of the Circumboreal Region within the Boreal Kingdom. According to the World Wide Fund for Nature, the territory of Belgium belongs to the ecoregion of Atlantic mixed forests.

Because of its high population density, its location in the centre of Western Europe and inadequate political effort, Belgium faces serious environmental problems. A 2003 report suggested Belgian natural waters (rivers and groundwater) to have the lowest water quality of the 122 countries studied. In the 2006 pilot Environmental Performance Index, Belgium scored 75.9% for overall environmental performance and was ranked lowest of the EU member countries, though it was only 39th of 133 countries.

LEGAL FACTORS:

Customs duties are levied at the time of importation and are generally ad valorem. Belgium applies the EU common external tariff (CET) to goods imported from non-EU countries. There is a single duty system (the CET) among all EU members for products coming from non-EU members. Theoretically, No customs duties apply for goods imported into Belgium from EU countries. Value-added taxes are levied on the importation of foodstuffs, tobacco, alcohol, beer, mineral water, and fuel oils. There are no export duties.

PORTERS DIAMOND MODEL:

FACTOR CONDITIONS: it constitute of land, labour, capital & infrastructure. As earlier discussed that Belgium has highly skilled & productive workforce. It is having natural resources of construction materials, silica sand & carbonates. It is having very good infrastructure like roads , buildings etc.

DEMAND CONDITIONS: demand conditions in Belgium are also good. They are mostly importing raw materials & making finished goods & exporting quality goods. Their is a big potential in the country. Demand of products is huge. Demand for more & more quality products is present their.

RELATING SUPPORTING INDUSTRIES: local industries are competitive by this firms are enjoying cost effective inputs.

FIRM STRATEGY STRUCTURE & RIVARLY: there is lots of competition in food industry, brewing industry.

COMPETITIVE ADVANTAGE OF BELGIUM: Belgium is one of the industrialised economy. It is having competitive advantage of tourism, & it is having competitive advantage in health care & primary education system. So these provide Belgium. Main contribution is of tourism which is earning a lots of foreign currencies for Belgium.

REFRENCES:

http://scholar.google.co.in/scholar?q=belgium+firms+strategy+structure+%26+rivalry&hl=en&as_sdt=0&as_vis=1&oi=scholart

http://www.nationsencyclopedia.com/Europe/Belgium.html

http://en.wikipedia.org/wiki/Belgium#History

http://scholar.google.co.in/scholar?q=belgium+firms+strategy+structure+%26+rivalry&hl=en&as_sdt=0&as_vis=1&oi=scholart