The Marshall Plan: the Walloon neoliberal recipe 
Michael Verbauwhede

Rough translation from: http://www.marx.be/fr/content/le-plan-marshall-la-recette-n%C3%A9olib%C3%A9rale-wallonne

"The  Walloon ambition is changing its nature, a new Walloon spirit, creative and serene is being born," said Paul Magnette (President of the Socialist Party), during the Wallonia Festival [53]. Jean-Claude  Marcourt (Walloon Minister of Economy), for his part, likes to remind us of the all-round success of "his" Marshall Plan, with 46,388 jobs created (or to be created ...) [54]. "Wallonia in full recovery" is the title for his article in La Libre Belgique of July 2013.

So Wallonia is recovering, after thirty years of economic mess?  How about these statements?  Does The Marshall Plan actually have an effect on the Walloon economy?  What is the economic strategy behind the Marshall Plan? These are a few questions that we will attempt to shed a light on in the following pages.

The Walloon economy in the Belgian context

A Wallonia that exceeds Flanders?

Start with placing the Walloon economic situation in the Belgian context. 

Following the raving comments by the government on the Marshall Plan and its global economic policy, or the UWE [55], we should understand that the Walloon economics show a strong economic growth and above all one that is higher than the one in Flanders (which is the alleged main goal).

According to a CBC report [56], the Walloon GDP growth for the period from 2000 to 2012 is identical to the period between 1990-1999 (about 1.5% per year on average, but strong variations are observed within periods).
What makes Walloon politicians trumpet, is that Walloon growth exceeds Flemish growth. Not that the Walloon growth increases, simply the Flemish growth decreases as seen in Figure 1. In fact, the average Walloon growth is stable  (between 1 and 2% a year on average) since the 1973 crisis, while the Flemish growth tends to decline, and is joining Wallonia. Contrary to the claims of UWE that "Wallonia outperforms Flanders" it means that the Flemish growth in the long term, adjusts itself to the Walloon economic growth.

*[Figure 1: Real regional GDP growth (in % per annum, period averages) Source: CBC, KBC, a full Walloon recovery?]

If we analyze the most recent period, it appears that each Belgian region wants to show that its territory is more competitive or that it is recovering more easily than the other. Some data indicate a gap. But in the long term [read: the last fifteen years], it appears that the reports are relatively stable [57]. "Whether in terms of trade balance, geographical distribution (regional) Belgian added value, the annual growth of Belgian GDP, Walloon, Flemish or Brussels, the regional economic structure shows impressive stability over the past fifteen years. In any event, it would be wrong to say that the Marshall Plan has brought significant growth for its almost ten years of operation, unlike  the adventurous affirmations of the Walloon Government.

"Through the Marshall Plan, we created 46,388 jobs"
If growth is not what this is about, maybe we should turn to job creation?  According to Marcourt, based on the figures in the official report to the government in mid-2013, 46388 jobs were created through the  Marshall Plan (2006 to 2012). These figures are shown with pride by the Walloon government. What to think? 

Firstly, the report makes it clear that these figures are about jobs, or "promises of jobs."  We have no more details about these job promises.  Moreover, no indication is given as to the calculation methodology of these jobs and their relation with the Marshall Plan. We find additional guidance from elsewhere, that qualify these job creations so far. According to Philippe Defeyt, "in 2010, almost all of the net jobs created (annual average) in Wallonia are jobs that bring little or cost little, to social security [58]." What do they cost? These are essentially subsidized jobs: "The recovery [in 2010] in employment seems to have originated in large part in subsidized  employment [service-vouchers, win-win programs, etc.] [59]" Philippe Defeyt also considers (for the 2008-2012 period for all of Belgium) that "it is only through the industries that are extensively or completely funded (service-vouchers, health and social services ...) that employment increases [60]."  Furthermore, "the figures would have been worse if the National Employment Office did not fund measures for temporary unemployment (for employees at the beginning of the crisis) and the re-organization of working time [61]."

Furthermore, the unemployment rate remains high in Wallonia, and follows the same trends as the unemployment rate in Flanders. According to the report by CBC, the unemployment rate has even increased 0.2% between 2008 and 2013 in Wallonia. Subsequently, the three Regions would see, according to forecasts of the Federal Planning Bureau, the unemployment rate go down only in 2018 [62].

*[Figure 2: evolution of the unemployment rate (Federal Planning Bureau) Source: Federal Planning Bureau, IWEPS, IBSA, SVR, Regional Economic Outlook from 2013 to 2018.]

Note that curves of past and future (projections) for unemployment in Wallonia and Flanders, though they are not parallel, still follow a similar trend. On the one hand, it is risky to give total credit to government  assertions that attribute the creation of 46,388 jobs to the Marshall  Plan. On the other hand, as for GDP growth, we see that Wallonia does not  follow a fundamentally different path from that of the region to which it compares itself (Flanders). In conclusion, it is necessary to question the Walloon economic policy, since obviously, it does not bear fruit.

The economic policy at the Walloon level

The origins: the economic situation in the early 2000s

According to politicians and historians of the Marshall Plan, the origin of the plan (and its various versions) is to be found in the economic backwardness of Wallonia compared to Flanders. Economic studies show that Wallonia has a lower share than Flanders in the Belgian GDP (in proportion to its population). The employment rate and income are lower than the Belgian average. This is what alerted the Walloon decisionmakers. Note the tendency to compare Flanders to Wallonia. It's not the employment of Wallonia itself that was sufficient to worry policymakers, but the fact that the employment rate is lower than that of Flanders [63].

The Contract for the Future of Wallonia and the Marshall Plan

Since 1999, the Walloon Government [64] is working towards the economic recovery of Wallonia. First through the Contrat d’avenir pour la Wallonie (CAW, 1999), followed by the Marshall Plan (PM) and the Plan Marshall 2.Vert. In 1999, Elio Di Rupo is already maneuvering for the CAW. The CAW already aims to bring the GDP growth rate and the employment rate of Wallonia at the Belgian and European average. In 2004, one has chosen new ones [a new government], and we make a new start: cdH ('centre démocrate Humaniste') arrives in the government, which in 2005 launches the first PM. 
The stated goal is to economically recover Wallonia. To do this, the Walloon government will target some areas as "for the future", strategic areas that it will concentrate its financial efforts on. The objective is also to "change the mentality" of the Walloons. "The Marshall Plan mobilizes budget resources in Wallonia and uses almost all the instruments Walloon politicians have at their disposal: regional, provincial and local tax reduction, investment aids, research assistance, training assistance, export support, attracting foreign investment, consolidation of brownfield sites, creation of new business areas ... It also mobilizes all stakeholders in the Walloon economic life: the social partners, enterprises, universities, research centers, administrations ... The prevailing impression is that of a general mobilization: all troops and weapons are now on the front [65]."
Without calling attention to it, the Walloon government commits to the neoliberal agenda of the European Commission, the Lisbon Strategy and Europe 2020: the European knowledge economy is to become the most competitive and dynamic of the world by 2020. This includes a target of a 75% employment rate, investments in research and development, and training up of the workforce. 
Fully funded by Wallonia, the means liberated for the Marshall Plans are important: 1.054 billion euros for the first and 1.6 billion euros for the Marshal Plan 2.vert. Note that these resources come, among others, from the sale of part of the shares of Arcelor (180 million). To these 2.7 billion, alternative financing is being added, a nice way of saying: debt, knowing that this money will need to be paid back at some time, some way or another by the region: 500.000.000 euros for the first Marshall Plan and 1.15 billion euros for 2.vert.

The Walloon industrial policy

Competitive clusters, industrial choices in the Marshall Plan

For many, the Marshall Plans coincide with "poles of competitiveness" and the policy of clustering. This is indeed an important element in the Walloon economic and industrial policy of the last ten years, although it does not mean this is the only one. Furthermore, there is a notable difference with Flanders [66]: the Walloon government has decided to focus on certain areas. 
A cluster is a formal network of companies, training organizations and research and development units (public or private) that produce synergies around common innovative projects. These partnerships are organized around a market (sector) and a technological or scientific field. The goal is to reach a critical mass to compete, gain international visibility, boost exports and attract foreign investors [67]. This policy is not unique to Wallonia. We indeed find the term 'competitiveness clusters' (along with other ways of calling them) in other European states (Germany, France), and even in Morocco. The idea is not new and comes from a 19 century economist called ... Alfred Marshall [68]! This is actually an 'innovative application' (in the case of writing) of the Lisbon strategy, which wants to make the EU the most competitive economy in the world by 2020 [69].
In the first Marshall Plan, The Walloon government has identified five clusters: BioWin (life sciences), MecaTech (Mechanical Engineering), Logistics in Wallonia  (logistics), SkyWin (aeronautics) and Wagralim (agribusiness). A sixth was created in 2010: GreenWin (materials and green chemistry). 
Based on work by Henri Capron (ULB), the criteria determining the choice of competitive clusters include firstly the achievements of a sector (number of companies, employees, research centers, patent, etc.),  but also the investments and its economic, technological, scientific prospects. Rather than relying on the economic structure of Wallonia and the needs of the population [70], the challenge is to subsidize strategic sectors that have development potential internationally: is there a Walloon world leader in this domain?  What is the growth potential? What propensity to export? These are the questions that the government asks. Which lead them to drop out of the steel industry; this sector did not pass the test in the first selection round, and is being abandoned. 
Competitive clusters notably work on the basis of 'research calls'. Different actors may use public funds to co-finance innovative research.  But even if the public sector (the region) is co-financing research, no warranty is asked in terms of job development or the public ownership of a potential patent. Ultimately, the companies own the patents, that they can then use as they see fit. This can lead to economic activities, but nothing obliges these companies to develop those economic activities in Wallonia. They may well decide to develop businesses in another country. 
Take the example of the cluster Logistics in Wallonia. Some believe that the development of logistics will help develop employment, particularly in areas where job losses are foreseen. Thus, in Liège, one of the ideas that have been put forward, is to replace the jobs lost in the industry by developing the logistics sector. Liège is indeed a remarkable location, at the crossroads of rivers, highways and European railways" [71]. It's the idea of the development of the Trilogiport in Liège, a trimodal platform water-rail-road. It could generate up to 2000 jobs, say the project's advocates [72]. 
As already shown by Damien Robert, half the tonnage of the port of Liège is related to the steel industry, "reconversion [including into logistics] without keeping the steel industry, would be nonsense. The steel industry is the backbone of the economy Liège [...]. 50% of the added value, tonnage and direct port jobs are directly related to metallurgy and steel industry.  It is therefore unthinkable to speak of conversion without mentioning to keep the steel industry running [73]."

The development of logistics leads to fierce competition between European regions, between Belgian regions and Walloon sub-regions. So, the idea of developing logistics throughout Europe is put forward by the European Commission. Flanders for example is also developing a "Logistics" pole in their plan Vlaanderen in Actie. The struggle between the two regions is so much raging at this level, that they have both sponsored 'scientific' studies executed by the same agency (!) to prove that each region was the champion of logistics at an European level. In its report submitted to the Flemish government, the consulting firm estimated that Flanders was the champion of logistics in Europe and the report submitted to the Walloon Government, Wallonia is the champion of logistics in Europe. According to Mathieu Strale, a researcher at the ULB, it was enough for the consultancy firm to change a criterion to influence the outcome [74], without a doubt as was expected by the region that was commisioning them. 
The industrial choice of the Marshall Plan is to leave decisions in the hands of multinationals (as we have seen with Mittal) and to try to support innovation (through clusters), in order to create jobs. But as we have seen with the abandonment of the steel industry, this policy is doomed to failure. Consequence of this choice: maintaining the Walloon traditional industry will depend on the profit that shareholders may draw from it.

Attracting investors

Another objective of the Marshall Plan is to attract foreign investors. The underlying logic to the Walloon economic policy is the sacrosanct belief in the power of business to create economic activities. It is hoped that thereby jobs are created. The wealth generated by these economic activities, created by companies, then "trickle down" to the whole of the Walloon population. This pushes the government to attract the largest possible number of international companies (multinationals) to set up on Walloon territory. Rather than creating economic activities itself, the government is trying to attract a multinational to a location A (in this case Wallonia) rather than to a place B (Flanders, another European region). It is a gigantesque plan to compete with other regions, and primarily with Flanders. 
A striking example: Colruyt supermarkets just built warehouses and a logistics center in Wallonia (in Ghislenghien, a few hundred meters from the  linguistic border) rather than in Flanders (where the group already has many facilities, including in Halle), while Colruyt Group is a Flemish group at its basis. Colruyt has just decided to enjoy the more favorable economic climate in Wallonia than in Flanders (land, taxation). 
Walloon companies that expand their activities abroad, as is the case now with Magotteaux (the 10% in 2011 still held by the Walloon Region were sold to a Chilean company [75]) are also valued, and put forward as the symbol of the success of Wallonia. 
But how is the government to attract foreign investors? In other words: what is the recipe for the government to economically develop their region? 

Clean, prepare and give land

First of all, by making terrains "ready to use".