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Country Strategy & Analysis Belgium & Netherlands
Presented By Akash Batra (05)
Namrata Mishra (33)Rahul Ranka (40)
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NetherlandsThis is a European CountryLocated along the North Sea,
next to Western Germany andNorthern BelgiumThe Netherlands in its entiretyis often referred to as Holland,although North and South
Holland are actually only twoof its twelve provincesCapital AmsterdamHouse of government is TheHague
The Hague
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Geographic Features of TheNetherlandsIts major water feature is, of course, the North Sea. Alsothe Netherlands has threerivers (Rhine, Waal, Meuse)that acts as a natural and acultural border. In 1134, astorm created thearchipelago of Zeeland
The climate of theNetherlands is a temperate,marine type of climate
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Customs and Traditions of TheNetherlandsNational Language-DutchTheir Saint Nicholas turned into Santa Clause
Religion-Roman Catholic- 31%
Dutch Reformed- 13%
No religion- 41%
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History of The Netherlands
DutchRepublic
BatavianRepublic
Kingdom of Holland
Part of FrenchEmpire
Kingdomof Netherlands
Industrialization WW II
After theWar
1581-17951795-1806 1806-1810 1810-1813
1815-present 6th Date 1941-1945
1945-present
The manwho ruledtheNetherlandsat this timenever spokea word
FirsttimeNetherlandswas aunitarystate
Napoleongave hisbrother theland as a gift
Later Napoleondecided hedidnt likehis brother so he tookback theland
Was onceagain aunitarystate andwas free of a king runsystem
Slow toindustrialize becauseof dependence on water and windpower
Estimated100,000Jews killedin theNetherlands
Startedgaining tiestoneighboring countriesBENELUX
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Government of The NetherlandsIt is a parliamentary democracyorganized as a unitary state.
A unitary state is a state
governed as one single unit inwhich the central government issupreme and any administrativedivisions exercise only powersthat their central governmentchooses to delegate
The Hague is the seat of theDutch government and theparliament and the Council of State
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Economy of the NetherlandsThe Netherlands is one of the world's10 leading exporting countries.Foodstuffs form the largest industrialsector.Other major industries includechemicals, metallurgy, machinery,electrical, goods and tourismExports - $397.6 billion (2009 est.)
Main export partners - Germany25.4%, Belgium 13.7%, France 8.9%,United Kingdom 8.8%, Italy 5.2%(2008)
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Economy of the NetherlandsImports - $358.9 billion (2009 est.)Import goods - machinery and transport equipment, chemicals,fuels, foodstuffs, clothingMain import partners - Germany 16.6%, China 10.1%, Belgium8.7%, 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 theUK 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 $55billion annually
Agricultural exports are derived from fresh-cut plants, flowers, andbulbs, 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, bulkchemicals, natural gas, petroleum products, construction, transportequipment, microelectronics, fishing.
Services (74% of GDP): Types--trade, hotels, restaurants, transport,storage and communication, financial (banking and insurance) andbusiness services, care, and other.
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Foreign Relations - NetherlandsThe Netherlands is an active and responsible participant in the UnitedNations as well as other multilateral organizations such as NATO, theEU, the Organization for Security and Cooperation in Europe (OSCE),the Council of Europe (CoE), the Organization for EconomicCooperation 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 continuousrelationships and dates back to the American Revolution.
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Country Risk - NetherlandsEconomic 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 increasinglyimportant to Dutch trade as he Netherlands role as a distribution countryhas increased in recent years.Unemployment, which was very high in 2009, has since improved, but isstill higher than normal.
Weak global demand and tighter fiscal policy will likely constrain theeconomic recovery moving forward.
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Country Risk - Netherlands
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Political Risk: Very LowThe Netherlands is a member of
the European Union and one of the original 11 countries toadopt the euro as its currency in1999.While the Netherlands has beenable to maintain a fiscal surplus
over the past several years, itran high government deficits in2009-2010. The governmentplanned tighten fiscal policy in2011.
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Country Risk - Netherlands
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Financial System Risk: LowThe insurance market is regulatedby De Nederlandsche Bank (DNB).
DNB has been the regulator since2004 when it merged with thePensioen and Verzekeringshamer (the pensions and insurancesupervisory authority of theNetherlands).
In response to the global financialcrisis, the government nationalizedtwo banks and made capitalinjections into the financial sector.The banking system has beenmostly stabilized and is well-capitalized.
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Belgium It is a federal state in WesternEuropeSmall, highly developed anddensely populated country (10
million of inhabitants)Capital- BrusselsFounding member of theEuropean Union and hosts theEU's headquartersPossibly the highest quality of life in the world and its worldrecords for high productivity andlow poverty
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Geography and People of BelgiumLocated in Western Europe,bordered by the Netherlands,Germany, Luxembourg, France,
and the North Sea Although generally flat, theterrain becomes increasinglyhilly and forested in thesoutheast (Ardennes) regionClimate is cool, temperate, and
rainyEurope's true melting pots withCeltic, Roman, Germanic,French, Dutch, Spanish, and
Austrian cultures having madean imprint.
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Government of BelgiumType: Parliamentary democracyunder a constitutional monarch.Independence: 1830Constitution: 1994 (revised)Branches: Executive--King(head of state), Prime Minister (head of government),Major political parties: ChristianDemocratic, Liberal, Socialist,
Green, Flemish nationalists(New Flemish Alliance), Flemishfar right (Vlaams Belang).Political subdivisions: Tenprovinces, three regions, threecommunities, 589
municipalities. 16
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EconomyGDP (purchasing power parity,2011 est.): 352 billion (approx.$467 billion)
Annual real growth rate (2011est.): 2.5%
Per capita income (PPP, 2010est.): 35,238 (approx. $48,535)
Natural resource: Coal
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Economy ContdTrade: Exports (2011 est.)--$263.7 billion: transportation equipment,diamonds, metals and metal products, foodstuffs, chemicalsImports (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 andvegetablesIndustry: (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, petroleumServices : (77.4% of GDP)
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Foreign Relations - BelgiumIt is a founding member of the European Union and hosts the EU'sheadquartersBelgium remains a strong proponent of both NATO and Europeandefense effortsIn 1948, Belgium signed the Treaty of Brussels with Great Britain,
France, the Netherlands, and LuxembourgBoth NATO (since 1966) and the EU have their headquarters inBrussels; 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 thenew democracies of central and eastern Europe and is activelyengaged in the Organization for Security and Cooperation in Europe(OSCE)
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Country Risk - BelgiumEconomic 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 creditconditions will be factors dragging down Belgiums growth prospects in2011 and 2012.
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Country Risk - Belgium
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Political Risk: Very LowBelgium is a member of theEuropean Union and one of the
original 11 countries to adopt theeuro as its currency in 1999.While the government has workedhard to maintain a balancedbudget, Belgium has highgovernment debt, at nearly 100%of GDP. The deficit is expectedthe improve only modestly in2011.Negotiations aimed atrestructuring the federalgovernment continue, but astalemate due to regional politicspersists
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Country Risk - Belgium
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Financial System Risk: LowThe insurance industry isregulated by the Banking, Financeand Insurance Commission
The banking system is large andwell-capitalized, but is recoveringfrom a period of restructuring,following several government bail-outs and recapitalization duringthe financial crisis
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Key Cultural Factors (Belgium)High Power Distance Belgian culture still retainsmuch of its historical traditions and formalities. A
strong hierarchy exists and titles and formalgreetings are still used.High Context Culture As a relatively traditionalsociety, Belgians place a lot of importance on the
individual being part of a larger whole. Decisionmaking is therefore a slow process
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Trade with BelgiumMost of Belgium's trade is with fellow EU member states. As a result,Belgium seeks to diversify and expand trade opportunities with non-ECcountries. Through November 2011, Belgium ranked as the 14th-largest market for the export of U.S. goods.
Bilaterally, there are few points of friction with the U.S. in the tradeand economic area. The Belgian authorities are, as a rule, anti-protectionist and try to maintain a hospitable and open trade andinvestment climate. As a result, the U.S. Government focuses its
market-opening efforts on the EU Commission and larger memberstates. Moreover, the Commission negotiates on trade issues for allmember states, which in turn lessens bilateral trade disputes withBelgium.
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Legal Environment in BelgiumThe only businesses currently regulated in Belgiumtrade are in the fields of insurance, banking, leasing,
transportation, pharmaceuticals, foodstuffs, drugsand construction.Belgian competition law was recently revamped bythe enactment of two new laws on 10 June 2006,
which further bring the Belgian legal framework inline with EU competition rules.
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Legal Environment (contd)O nly 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 takesvarious 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 agiven time period and a specific geographic area, toexploit their intellectual property.
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MNEs in Belgium (Top 12Most Visible) Source : a 2011 study by University of Brussels
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Incentives for FDIBelgium is an open economy offering a solidenvironment for foreign direct investments.There is no discrimination between domesticand foreign companies or between branchesand subsidiaries.
The friendly investment climate is furthersupported by subsidies and tax incentivesavailable 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 wrtEase of Doing Business( Source: WorldBank Study for 2012 )
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Netherlands Ranked wrtvarious factors
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Recommendations:Concentrate on nurturing relationship with Japanwhich has famously strong links with Dutch business,
which have only been bolstered by the consistentlydropping rate of corporate tax.In keeping with other European jurisdictions, China seconomic boom represents a huge opportunity forforeign direct investment into both Belgium and TheNetherlands
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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 increaseenvironmental due diligence to levels hithertounknown.Watch out for the Dutch and Belgian private equityscene as it has also been vulnerable territory over thepast few years, with a downturn in public opinionthat has somewhat mirrored developments in the UK and further.
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