The Walloon economy is unable to rebound despite recurrent injections of European funds.
“Is Wallonia the new Greece?”, we headlined last November. Regional indebtedness has reached alarming proportions (200% of revenue) and, even more worrying, the Walloon economy has failed to bounce back despite recurrent injections of European funds and multiple Marshall Plans. The European Commission admits this acknowledgment of failure: the GDP per capita (the flagship indicator of the so-called cohesion policies) of Wallonia has not come close to the European average. Worse, only one region out of 59 has seen its per capita GDP increase with the contribution of structural funds and 18 have even declined. This should encourage the Commission to thoroughly review the way in which the means are …
“Is Wallonia the new Greece?”, we headlined last November. Regional indebtedness has reached alarming proportions (200% of revenue) and, even more worrying, the Walloon economy has failed to bounce back despite recurrent injections of European funds and multiple Marshall Plans. The European Commission admits this acknowledgment of failure: the GDP per capita (the flagship indicator of the so-called cohesion policies) of Wallonia has not come close to the European average. Worse, only one region out of 59 has seen its per capita GDP increase with the contribution of structural funds and 18 have even declined. This should encourage the Commission to thoroughly review the way resources are used. And with immediate effect to prevent the 750 billion of the European recovery plan from proving to be just as unproductive. In a column published by the Jules Destrée Institute, the economist Didier Paquot underlines in this respect “the Walloon mystery”. When we look at innovation policy, R&D expenditure, patents or the creation of start-ups, Wallonia ranks among the strong European innovators and thus stands out positively from other regions that are lagging behind. This translates into the consolidation of an impressive biotechnology ecosystem and the emergence of a network of start-ups. But clearly, this is not enough to provide sufficient impetus to the entire regional economy. It is here that we regret the absence of a culture of evaluation in our country. Governments adopt measures that they think are relevant (at least we hope so) but without accompanying them with precise criteria for evaluating their effects. Incubators, research centers, business aid, competitiveness clusters, multiple training organizations, economic animation, etc., have their individual usefulness. But on the one hand, it is often difficult to see the overall coherence in the muddle of institutions and action plans (it is therefore difficult to instil this confidence which is sorely lacking). And on the other hand, no one can quantify their real impact on the functioning of our economy. No one can therefore verify the effectiveness of the use of public resources. The zero-based budget, which the Walloon government is in the process of implementing, could however initiate an interesting development in this respect. One of the difficulties in the exercise of developing regional economic policies is the profound duality of the territory between Walloon Brabant, which is among the richest areas in Europe, and certain pockets of Hainaut or Liège where the rate of activity barely exceeds 70%, sometimes for two or three generations. At the present time, the seconds are unfortunately pulling the whole thing more downwards than the first are dragging it upwards. “Even if there are wonderful entrepreneurship initiatives, they will not be enough, writes economist Bruno Colmant in a recent post on LinkedIn. Unemployment is endemic and training for young people and adults is insufficient.” The “zero long-term unemployed” territories, which appear in the government’s cards, could be a solution in this regard and help to trigger a dynamic of activity from the bottom of the ladder. This track still needs to be correctly assessed this time and integrated into an overall vision of the economic redeployment of Wallonia.
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