Advertisement

The Structural Crisis of a Regional Economy. A Case-Study: The Walloon Area

  • Louis E. Davin
Chapter
Part of the International Economic Association Conference Volumes, Numbers 1–50 book series (IEA)

Abstract

Like other areas where industrialisation started early, the Walloon area suffers from a structural maladjustment due, on the one hand, to the high cost of the energy used (in this case, Belgian coal) and on the other hand to trade deficiencies in certain industrial sectors, even when technical progress is most advanced, as it is in metal industries or in chemicals. These particular sectors, including iron and steel industries, have specialised in branches of production the demand for which increases very slowly or even declines.

Keywords

Coal Mine Regional Economy Steel Industry Foreign Worker Development Area 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Notes

  1. Like other areas where industrialisation started early, the Walloon area suffers from a structural maladjustment due, on the one hand, to the high cost of the energy used (in this case, Belgian coal) and on the other hand to trade deficiencies in certain industrial sectors, even when technical progress is most advanced, as it is in metal industries or in chemicals. These particular sectors, including iron and steel industries, have specialised in branches of production the demand for which increases very slowly or even declines.Google Scholar
  2. Les Comptes nationaux 1955–1965, Office Statistique des Communautés Européennes, Luxemburg (1966) (National Accounts 1955–1965, Statistical Office of the European Communities).Google Scholar
  3. J. Delode, ‘Pour une reconversion effective de nos bassins miniers’, Revue du Conseil Économique Wallon, Liège, no. 78 (juin 1966) p. 4 (How to Accomplish an Effective Economic Conversion in our Mining Areas?’, Review of the Walloon Economic Council).Google Scholar
  4. It is somewhat more difficult to assess the quantitative effects of the closing down of the coal mines upon the other industrial sectors. Mr E. Nols has calculated the rates to be applied to ascertain the losses in income and employment in these other sectors. The financial losses suffered by all the other industries considered as a whole (iron and steel, non-ferrous metals, metal manufacturing, coking, electric-power production, chemicals, rubber industries, textiles, clothing and hides and leather, construction, transport and trade) accounted for 23% of the income losses due to the decline in output taking into account the indirect effects only, and 130% when adding the indirect and the secondary effects. The rates to apply in order to ascertain the employment losses in these other industries are 39% and 160% of the laying off in the coal mines respectively. The ‘indirect effects’ are the reduction in the orders passed by the coal mines to their suppliers (which are mostly located in the Walloon area). The ‘secondary effects’ are defined as the reductions in the retail sales due to the gradual decline of the personal incomes; as these apply directly to the end demand, their impact is not exclusively felt locally and gets diluted into the whole economy.Google Scholar
  5. See E. Nols, ‘La Reconversion des régions minières de Wallonie’, Revue du Conseil Économique Wallon, no. 72–3 (janvier–avril 1965) pp. 19–25 (‘The Economic Conversion of the Walloon Mining Areas’).Google Scholar
  6. Nuclear power will primarily be used for electricity production. It is anticipated that the electricity consumed by the E.C.S.C. members will increase from 400 billion kWh in 1965 to 3,450 billion kWh by the year 2000, including 2,400 billion produced by nuclear reactors, in particular fast-breeders. Estimated production costs in the nuclear power generators to be set up between now and the end of the century are to reach 7,500 billion Belgian francs, but savings will nevertheless be in the neighbourhood of some 7,000 billion compared to what the final cost would be if this amount of electricity were still to be supplied by conventional methods. See Premier Programme indicatif pour la CommunautéEuropéenne de l’Énergie Atomique, Publication de la Communauté Européenne de l’Énergie Atomique (juin 1965) (First Indicative Programme for the European Atomic Energy Community, EURATOM).Google Scholar
  7. Most of the larger European concerns now use 9-metre-wide blast furnaces, the capacity of which averages 1,500 to 2,000 tons, but Belgium has only 4 of those, 2 in Sidmar (Gent) and 2 in the Liège area.Google Scholar
  8. From Rapport annuel de l’Office National de Sécurité Sociale, Brussels (Yearly Report of the National Social Security Office).Google Scholar
  9. The figures relating to output are quoted from the Bulletin de statistique, l’Institut national de statistique (Statistical Bulletin, National Statistical Institute) nos. 11–12 (novembre-décembre 1966) p. 2,271. The figures relating to employment are quoted from Rapport annuel de l’Office National de Sécurité Sociale.Google Scholar
  10. A. Sauvy, ‘Conditions du développement économique et mesures à prendre en vue d’un renouveau général ‘, Revue du Conseil Économique Wallon, nos 54–5 (janvier–avril 1962) p. 36 (‘The Prerequisites for Economic Development and Measures for a General Overhaul’).Google Scholar
  11. An increase in the number of births could be ensured through a series of ‘ pro-natalistic’ measures, such as substantial family allowances, birth grants, pre-natal allowances, wedding savings incentives, etc. Such measures might prove successful in the Walloon area, as the results achieved have been quite satisfactory in France where such policies have been implemented since 1939.Google Scholar
  12. The fecundity rate is defined as the ratio of the number of births to the number of women within procreative age limits, i.e. between 15 and 45 years old.Google Scholar
  13. Figures obtained from the Walloon Economic Council.Google Scholar
  14. G. Demanatalisticître, ‘Pour un meilleur accueil’, Revue du Conseil Économique Wallon, no. 80 (octobre 1966) p. 14 (‘For a Better Welcome’).Google Scholar
  15. It is amazing to note that 43 % of the foreign workers entering Belgium in 1964 have applied for a working permit in the coal-mines, precisely where the coal crisis had started already 10 years before.Google Scholar
  16. R. Paquet, ‘Essai d’évaluation du coût de la reconversion des régions minières du Sud’, Revue du Conseil Économique Wallon, no. 76 (septembre-octobre 1965) pp. 1–7 (’ An Evaluation of the Cost of the Economic Conversion of the Southern Mining Area’.)Google Scholar
  17. In 1966, only 4% of the laid-off workers took advantage of national training facilities. It would seem that most of the industrial firms do not know that the European Economic Community and the E.C.S.C. have a grants-in-aid programme for finding new jobs for former miners and retraining them (Article 56 of E.C.S.C. and Article 125 of the Rome Treaty relating to the European Social Fund).Google Scholar
  18. Informations statistiques, Ministère de l’Emploi et du Travail, Brussels, no. IX and X (1966) p. 6 (Statistical Data. Ministry of Labour, Brussels).Google Scholar
  19. This, despite official statements such as this pronouncement by J. van der Schueren who said on 17 December 1959 before the Senate: ‘The Government will do everything possible to create new jobs, to attract and subsidize new investment. Our target must be that 50,000 new posts will have been offered by the end of 1963.’Google Scholar
  20. Situation du marché de l’emploi en 1966, Office National de l’Emploi, pp. 5–6 (The Labour Market in 1966).Google Scholar
  21. Our readers will readily understand that we have felt compelled to skip the factual details and only spell out a few general conclusions easy to draw from so many painful, appalling and hopeless stories.Google Scholar
  22. The definition in Article 4.1 was as follows: ‘A development area constitutes a consistent whole, whose population is confronted with common problems as regards economic growth which may be solved in the long run by regular expansion based on adequate infrastructure.’Google Scholar
  23. J. Milhau, ‘La Théorie de la croissance et l’expansion régionale’, Économie appliquée, no. 3 (Paris 1956) p. 354 (‘A Theory of Regional Growth and Expansion’, Applied Economics).Google Scholar
  24. The difficulties confronting the Westhoek region for instance are certainly not to be questioned but they cannot compare with the kind of problems experienced in the coalmining areas. In all its three districts, the Westhoek area registers a rate of activity and development such as have never been equalled in the Walloon area. Taking as a reference factor the trend of the rate of activity — or the ratio of the 1959 employment index to the 1964 population index brought back to 1959, Dixmude is ranking first, with an exceptional activity rate of 147.4, Ypres ranks third (129.9), Furnes is fourteenth (114.4), whereas in all the districts affected by the coal mining crisis, the activity is pointedly stagnant, as it is in Liège (101.3) and Charleroi (100.2) or significantly declining as it is in Mons (93.0), Soignies (89.8) and Thuin (83.9). For this, see Pertinax, ‘QuellesGoogle Scholar
  25. sont, en Belgique, les régions confrontées à des problèmes aigus et urgents?’ Revue du Conseil Économique Wallon, no. 79 (août 1966) pp. 1–10 (‘Which are the Areas Confronted with Pressing and Urgent Problems in Belgium?’).Google Scholar
  26. By 30 June 1966, out of the ‘totally unemployed’ registered in all the 678 ‘communes’ concerned, 61.6% belonged to the Walloon area, 38.4% to the Flemish ones.Google Scholar
  27. From a sectoral viewpoint, the first economic promotion Bill did not produce the desired structural changes. From 1959 to 1965, investments totalled 125.9 billion B.fr., but, out of this total amount, 51 billions only were granted under the so-called regional Bill (18 July 1959) — 41% of such investments went into the steel industries (21 billion B.fr. helped setting up the complex Sidmar plant in Gent and the Liège steel industries were granted 9 billions), 25% into metal manufactures and 10% only to chemicals. This assistance has been distributed as and when required, and was not submitted to any overall programming or even any strict selection rules so that it mainly contributed to capacity increases instead of qualitative structural changes, and, consequently, it contributed to maintain industries whose efficiency was in any case bound to remain sub-level. In this respect, see A. Camu, ‘Pourquoi une nouvelle loi d’aide régionale’, Le Monde, Courrier de Belgique (21 octobre 1966) p. 17 (‘Why is a New Regional Assistance Bill Necessary’).Google Scholar
  28. From the yearly report issued by the Ministry of Economic Affairs.Google Scholar
  29. L. E. Davin, ‘La Vocation transnationale de la région liégeoise’, Revue du Conseil Économique Wallon (décembre 1966) no. 81, pp. 8–29 (‘The Trans-National Vocation of the Liège area’).Google Scholar
  30. This definition of the Lorraine area only covers the northern part of a larger area, the Moselle area, which includes the French Lorraine, the German Saarland, the Luxemburg Gutland and the Belgian Southern Luxemburg. The basis of the economic unity of the entire area is the ferrous ore body, the largest in Europe.Google Scholar
  31. This particular Belgian region used to be comparatively wealthy but is now plagued with mass emigration for various reasons: there are no cultural centres, the Canadian military personnel and their families have left Marville, their French base, and also (the major reason in fact) there is a nearby paper mill (which, by the way, is the only Belgian firm which was granted some assistance from the European Investment Bank under the economic conversion projects) which has not installed any deodorisation plant. For all these reasons the Virton sub-district has lost a good deal of its population, and for the area to be turned into residential districts implies that welfare measures would first be taken against this paper pulp concern whose profitability moreover can certainly be questioned.Google Scholar
  32. Under the 1957 Bill (called the ‘1350 measurement tons bill’) it has been decided to widen the Sambre River and the Charleroi, Nimy-Péronnes and Upper-Escaut River canals. At present only the Nimy-Péronnes canal has been completed — its modernisation works took 6 years — but it still is not put to full use as it can offer no exit for 1,350 measurement-tons barges so long as the Upper-Escaut and the Charleroi canal are not widened, which will not be until 1970 and 1975 respectively. The widening of the Charleroi-Clabecq-Brussels canal was decided as early as 1938 but the works will not be completed until 1968.Google Scholar
  33. The creation of this particular highway as well as of the Walloon highway is included in the public construction programme for 1967–71. As to the E.10 highway, only its general alignment is known, though its building was decided as far back as 1950.Google Scholar

Copyright information

© International Economic Association 1969

Authors and Affiliations

  • Louis E. Davin
    • 1
  1. 1.Université de LiègeBelgium

Personalised recommendations