Country Strategy & Analysis Belgium & Netherlands

Presented By Akash Batra (05) Namrata Mishra (33) Rahul Ranka (40)

Netherlands
This is a European Country Located along the North Sea, next to Western Germany and Northern Belgium The Netherlands in its entirety is often referred to as Holland, although North and South Holland are actually only two of its twelve provinces Capital Amsterdam House of government is The Hague

The Hague

Geographic Features of The Netherlands

Its major water feature is, of course, the North Sea. Also the Netherlands has three rivers (Rhine, Waal, Meuse) that acts as a natural and a cultural border. In 1134, a storm created the archipelago of Zeeland The climate of the Netherlands is a temperate, marine type of climate

Customs and Traditions of The Netherlands

National Language-Dutch Their Saint Nicholas turned into Santa Clause ReligionRoman Catholic- 31% Dutch Reformed- 13% No religion- 41%

History of The Netherlands

Batavi an Republ ic 17951806 Part of French Empire 1810-1813 Later Napoleon decided he didnt like his brother so he took back the land Kingdom of Netherlan ds 1815present

Dutch Republic 1581-1795

Kingdom of Holland 1806-1810

Industriali zation 6th Date Slow to industrializ e because of dependenc e on water and wind power

WW II 1941-1945

After the War 1945present

The man who ruled the Netherlands at this time never spoke a word

First time Netherl ands was a unitary state

Napoleon gave his brother the land as a gift

Was once again a unitary state and was free of a king run system

Estimated 100,000 Jews killed in the Netherland s

Started gaining ties to neighborin g countries BENELUX

Government of The Netherlands

It is a parliamentary democracy organized as a unitary state. A unitary state is a state governed as one single unit in which the central government is supreme and any administrative divisions exercise only powers that their central government chooses to delegate The Hague is the seat of the Dutch government and the parliament and the Council of State

Economy of the Netherlands

The Netherlands is one of the world's 10 leading exporting countries. Foodstuffs form the largest industrial sector. Other major industries include chemicals, metallurgy, machinery, electrical, goods and tourism Exports - $397.6 billion (2009 est.) Main export partners - Germany 25.4%, Belgium 13.7%, France 8.9%, United Kingdom 8.8%, Italy 5.2% (2008)

Economy of the Netherlands

Imports - $358.9 billion (2009 est.) Import goods - machinery and transport equipment, chemicals, fuels, foodstuffs, clothing Main import partners - Germany 16.6%, China 10.1%, Belgium 8.7%, United States 7.5%, United Kingdom 5.8%, Russia 5.4%, France 4.4% (2008) The Netherlands' location gives it prime access to markets in the UK and Germany, with the port of Rotterdam being the largest port in Europe. The Dutch rank third worldwide in value of agricultural exports, behind the United States and France with exports earning $55 billion annually Agricultural exports are derived from fresh-cut plants, flowers, and bulbs, with the Netherlands exporting two-thirds of the world's total
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Sectors - Netherlands
Agriculture (2 % of GDP): Products--dairy, poultry, meat, livestock, flower bulbs, cut flowers, vegetables and fruits, sugar beets, potatoes, wheat, barley. Industry (24% of GDP): Types--agro-industries, steel and aluminum, metal and engineering products, electric machinery and equipment, bulk chemicals, natural gas, petroleum products, construction, transport equipment, microelectronics, fishing. Services (74% of GDP): Types--trade, hotels, restaurants, transport, storage and communication, financial (banking and insurance) and business services, care, and other.

Foreign Relations - Netherlands

The Netherlands is an active and responsible participant in the United Nations as well as other multilateral organizations such as NATO, the EU, the Organization for Security and Cooperation in Europe (OSCE), the Council of Europe (CoE), the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), and the International Monetary Fund (IMF). The U.S. partnership with the Netherlands is one of its oldest continuous relationships and dates back to the American Revolution.

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Country Risk - Netherlands

Economic Risk: Very Low
In recent years, the Netherlands economy has been driven by income from external trade involving its agro-industries, as well as machinery, equipment, chemicals and fuels. Re-exports have become increasingly important to Dutch trade as he Netherlands role as a distribution country has increased in recent years. Unemployment, which was very high in 2009, has since improved, but is still higher than normal. Weak global demand and tighter fiscal policy will likely constrain the economic recovery moving forward.

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Country Risk - Netherlands

Political Risk: Very Low
The Netherlands is a member of the European Union and one of the original 11 countries to adopt the euro as its currency in 1999. While the Netherlands has been able to maintain a fiscal surplus over the past several years, it ran high government deficits in 2009-2010. The government planned tighten fiscal policy in 2011.

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Country Risk - Netherlands

Financial System Risk: Low
The insurance market is regulated by De Nederlandsche Bank (DNB). DNB has been the regulator since 2004 when it merged with the Pensioen and Verzekeringshamer (the pensions and insurance supervisory authority of the Netherlands). In response to the global financial crisis, the government nationalized two banks and made capital injections into the financial sector. The banking system has been mostly stabilized and is wellcapitalized.
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Belgium

It is a federal state in Western Europe Small, highly developed and densely populated country (10 million of inhabitants) Capital- Brussels Founding member of the European Union and hosts the EU's headquarters Possibly the highest quality of life in the world and its world records for high productivity and low poverty

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Geography and People of Belgium

Located in Western Europe, bordered by the Netherlands, Germany, Luxembourg, France, and the North Sea Although generally flat, the terrain becomes increasingly hilly and forested in the southeast (Ardennes) region Climate is cool, temperate, and rainy Europe's true melting pots with Celtic, Roman, Germanic, French, Dutch, Spanish, and Austrian cultures having made an imprint.
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Government of Belgium
Type: Parliamentary democracy under a constitutional monarch. Independence: 1830 Constitution: 1994 (revised) Branches: Executive--King (head of state), Prime Minister (head of government), Major political parties: Christian Democratic, Liberal, Socialist, Green, Flemish nationalists (New Flemish Alliance), Flemish far right (Vlaams Belang). Political subdivisions: Ten provinces, three regions, three communities, 589 municipalities.
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Economy
GDP (purchasing power parity, 2011 est.): 352 billion (approx. $467 billion) Annual real growth rate (2011 est.): 2.5% Per capita income (PPP, 2010 est.): 35,238 (approx. $48,535) Natural resource: Coal

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Economy Contd
Trade: Exports (2011 est.)--$263.7 billion: transportation equipment, diamonds, metals and metal products, foodstuffs, chemicals Imports (2010 est.)--$261 billion: machinery and equipment, chemicals, diamonds, foodstuffs, pharmaceuticals, transportation equipment, oil products Agriculture: (1% of GDP) Products--livestock, including dairy cattle, grain, sugarbeets, milk, tobacco, potatoes, and other fruits and vegetables Industry: (24.3% of GDP) Types--engineering and metal products, motor vehicle assembly, transportation equipment, scientific instruments, processed food and beverages, chemicals, basic metals, textiles, glass, petroleum Services : (77.4% of GDP)

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Foreign Relations - Belgium

It is a founding member of the European Union and hosts the EU's headquarters Belgium remains a strong proponent of both NATO and European defense efforts In 1948, Belgium signed the Treaty of Brussels with Great Britain, France, the Netherlands, and Luxembourg Both NATO (since 1966) and the EU have their headquarters in Brussels; SHAPE (Supreme Headquarters Allied Powers Europe, NATO's military headquarters) is in the south of the country, near Mons. Belgium supported the expansion of NATO and EU membership to the new democracies of central and eastern Europe and is actively engaged in the Organization for Security and Cooperation in Europe (OSCE)

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Country Risk - Belgium

Economic Risk: Low
Belgiums advantageous central geographic location in Europe has helped it become a highly developed transit and distribution centre for many other countries in the European market Reduced global demand for Belgian exports and tight consumer credit conditions will be factors dragging down Belgiums growth prospects in 2011 and 2012.

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Country Risk - Belgium

Political Risk: Very Low
Belgium is a member of the European Union and one of the original 11 countries to adopt the euro as its currency in 1999. While the government has worked hard to maintain a balanced budget, Belgium has high government debt, at nearly 100% of GDP. The deficit is expected the improve only modestly in 2011. Negotiations aimed at restructuring the federal government continue, but a stalemate due to regional politics persists

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Country Risk - Belgium

Financial System Risk: Low
The insurance industry is regulated by the Banking, Finance and Insurance Commission The banking system is large and well-capitalized, but is recovering from a period of restructuring, following several government bailouts and recapitalization during the financial crisis

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Key Cultural Factors (Belgium)

High Power Distance Belgian culture still retains much of its historical traditions and formalities. A strong hierarchy exists and titles and formal greetings are still used. High Context Culture As a relatively traditional society, Belgians place a lot of importance on the individual being part of a larger whole. Decision making is therefore a slow process

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Trade with Belgium

Most of Belgium's trade is with fellow EU member states. As a result, Belgium seeks to diversify and expand trade opportunities with non-EC countries. Through November 2011, Belgium ranked as the 14thlargest market for the export of U.S. goods. Bilaterally, there are few points of friction with the U.S. in the trade and economic area. The Belgian authorities are, as a rule, antiprotectionist and try to maintain a hospitable and open trade and investment climate. As a result, the U.S. Government focuses its market-opening efforts on the EU Commission and larger member states. Moreover, the Commission negotiates on trade issues for all member states, which in turn lessens bilateral trade disputes with Belgium.

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Legal Environment in Belgium

The only businesses currently regulated in Belgium trade are in the fields of insurance, banking, leasing, transportation, pharmaceuticals, foodstuffs, drugs and construction. Belgian competition law was recently revamped by the enactment of two new laws on 10 June 2006, which further bring the Belgian legal framework in line with EU competition rules.

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Legal Environment (contd)

Only restrictive practices and abuse of a dominant position that have effects on the Belgian market are targeted by the Belgian legislation. In Belgium, intellectual property protection takes various forms: copyright and related rights, patents, trademarks, designs or models and pla nt breeders' rights. Through these protections, titleholders are granted the exclusive right, within a given time period and a specific geographic area, to exploit their intellectual property.
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MNEs in Belgium (Top 12 Most Visible)

Source : a 2011 study by University of Brussels

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Incentives for FDI

Belgium is an open economy offering a solid environment for foreign direct investments. There is no discrimination between domestic and foreign companies or between branches and subsidiaries. The friendly investment climate is further supported by subsidies and tax incentives available from government.(Source : study by PWC in 2009)
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Netherlands Rank wrt Ease of Doing Business( )

Source: World Bank Study for 2012

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Netherland vs Belgium wrt Ease of Doing Business(

Bank Study for 2012)

Source: World

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Netherlands Ranked wrt various factors

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Recommendations:
Concentrate on nurturing relationship with Japan which has famously strong links with Dutch business, which have only been bolstered by the consistently dropping rate of corporate tax. In keeping with other European jurisdictions, China s economic boom represents a huge opportunity for foreign direct investment into both Belgium and The Netherlands

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Recommendations (contd):
Concentrate on adhering to environmental norms. Already the environmental measures are taking their toll on real estate investors being forced to increase environmental due diligence to levels hitherto unknown. Watch out for the Dutch and Belgian private equity scene as it has also been vulnerable territory over the past few years, with a downturn in public opinion that has somewhat mirrored developments in the UK and further.
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