Belgium - Global Development
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Belgium cuts aid 25% by 2030 as its tax rules and Congo legacy still shape its development story
Belgium occupies a genuinely complex position in global development. It hosts the EU’s institutions in Brussels, maintains historical ties to its former colonies, and has long contributed meaningfully to international aid. Yet a new coalition government has now launched the country’s steepest aid cut in decades, its tax rules remain a documented drain on developing-country revenue, and its colonial history in Congo still shapes how those relationships are read. This article covers aid, tax, climate, and trade, alongside the historical legacy that runs underneath all four.
Colonial Legacy and Development Approach
Belgium’s development approach cannot be separated from its colonial history. King Leopold II’s personal ownership of the Congo Free State stands as one of history’s most violent colonial projects, resulting in millions of deaths. This legacy shapes Belgium’s current development relationships and remains a live political issue, not settled history.
Belgium has taken some steps toward reckoning with this record. It returned stolen artifacts to the Democratic Republic of Congo, issued official acknowledgments of past atrocities, and updated school curricula to teach a more honest colonial history. Critics argue structural reparations remain insufficient, and that economic extraction patterns persist in modern form.
Belgium’s bilateral development cooperation concentrates on 14 partner countries, 13 of them in Africa and 12 among the Least Developed Countries, with the Democratic Republic of Congo, Rwanda, and Burundi receiving priority attention. This concentration makes historical sense, but it also raises a fair question RYB continues to track: whether this focus reflects strategic development thinking or an unresolved sense of colonial obligation.
A 25% Aid Cut, Confirmed and Underway
Belgium’s new five-party federal coalition, formed in January 2025 after prolonged post-election negotiations, agreed to cut the country’s foreign aid budget by 25% over five years. The Directorate-General for Development Cooperation faces reductions of €106 million in 2025, €212 million in 2026, and €318 million in 2027, all measured against the 2024 baseline.
The OECD confirmed in April 2026 that Belgian development aid fell 17% in 2025 alone, part of a broader collapse in which 26 of 34 surveyed OECD members cut aid, though the US alone accounted for 75% of the total global decline. A further 5.8% drop is projected for 2026.
Regional funding has been hit even harder. Flemish government ODA fell 28% in 2025, to just €43 million, representing only 1.8% of total Belgian aid, the lowest share since 2006. Enabel’s director general noted publicly that, despite the scale of the cut, public and media interest remained strikingly muted, a sign of how far development cooperation has fallen from public attention since its 1970s-90s peak.
Belgium ranked 10th among DAC donors for ODA/GNI ratio in 2024, at 0.48%, still short of the 0.7% target Belgium legally committed to under its 2013 Law on Development Cooperation, and which the EU has separately agreed all member states should reach by 2030. On current trends, Belgium will move further from that target, not closer to it.
Tax: A Documented Enabler, Not Just a Reputation
Belgium’s tax system has real, measurable effects on developing countries. It ranked 16th on the Tax Justice Network’s Corporate Tax Haven Index in the most recent published edition, a “highly tax aggressive jurisdiction that is a major host of multinational corporations’ financial activity,” in the Tax Justice Network’s own words, a different profile from small island havens but a genuine one.
The mechanism has a documented history. Belgium’s “excess profit” tax ruling system let multinational corporations avoid billions in tax before the European Commission ruled the arrangement illegal state aid in 2016. Similar mechanisms have since re-emerged under different names, illustrating how difficult durable reform remains even after a clear legal precedent.
Belgium’s notional interest deduction scheme, along with other preferential regimes for specific industries, continues to attract multinational headquarters seeking to minimise their tax bill. Belgium did implement the OECD’s 15% global minimum tax for large multinationals starting January 2024, a genuine, if partial, step toward closing these gaps.
Belgium’s double taxation treaties with developing countries often restrict those countries’ own taxing rights, enabling profit shifting toward Belgium rather than taxation where economic activity actually occurs. Tax justice advocates continue to call for comprehensive treaty renegotiation, a reform that would cost Belgium little in absolute terms relative to its aid budget.
Climate: Ambition Constrained by Fiscal Rules
Belgium’s climate commitments now compete directly with a binding fiscal constraint. The country sits under the EU’s excessive deficit procedure, having run a deficit above 3% of GDP, and must deliver average annual deficit reduction of roughly 0.5 percentage points through 2030 under its federal consolidation plan.
This leaves little room for expanding climate finance at exactly the moment international climate finance needs are rising. Belgium’s domestic emissions reduction has also lagged behind several European neighbours, a longstanding criticism that fiscal tightening is unlikely to resolve on its own.
Trade: Chemicals and Pharma Caught in the Tariff Crossfire
Belgium’s export economy is unusually exposed to 2025-26’s tariff shifts. Chemicals and pharmaceutical products made up 57.5% of Belgian exports to the US in 2023, and the US ranked as Belgium’s fourth-largest export market. The same two categories dominate Belgian imports from the US as well.
Belgium’s economic outlook for 2026-27 explicitly cites US tariffs as a drag on export growth, compounding a separate normalisation in pharmaceutical demand following exceptionally strong pandemic-era years. As an EU member, Belgium’s tariff treatment follows the bloc-wide EU-US framework rather than a bilateral deal of its own, unlike the UK.
For developing countries, Belgium’s trade policy runs through Brussels rather than through bilateral preference programmes Belgium could adjust unilaterally, the same structural point RYB has noted on other EU member state pages.
What Belgium Still Contributes
Despite the cuts, Belgium’s development infrastructure remains substantial. Enabel employs nearly 2,400 staff, more than three-quarters of them national staff in partner countries rather than expatriates, a genuinely strong localisation ratio compared to many donor agencies.
Belgium’s civil society ecosystem remains active and often critical of government policy, a healthy sign for accountability. Diaspora communities from Congo, Rwanda, and Burundi increasingly participate in development discussions, even though their formal influence on policy remains limited. Belgian research institutions continue producing independent, evidence-based analysis of aid effectiveness.
How This Connects to the SDGs
Belgium’s aid cuts directly threaten SDG 17, on global partnerships, at a moment when Belgium had already fallen short of its own legal 0.7% commitment. Its tax haven ranking connects to SDG 10, reducing inequality, and SDG 16, strong institutions, since the same profit-shifting mechanisms the Tax Justice Network documents divert revenue developing countries could otherwise collect and spend.
The colonial legacy dimension connects less directly to a single SDG number, but shapes SDG 17 in a different sense: genuine partnership, the goal’s stated aim, is harder to build on a foundation many in Belgium’s own former colonies still see as unresolved.
A Pattern, Not an Isolated Case
Belgium’s cut sits alongside similar reductions in Finland, France, Germany, the Netherlands, and the UK, all part of the broader donor retrenchment RYB tracks across its country pages. Belgium’s 25%, five-year framing mirrors the scale of the Dutch cut covered on RYB’s Netherlands page, agreed at almost the same political moment.
Whether Belgium follows the Dutch precedent of partial reversal after a change of government remains to be seen; unlike the Netherlands, Belgium’s current coalition shows no signs of revisiting the 2025 aid agreement, and the role of development minister itself has been eliminated from the new government’s structure entirely.
Looking Forward
Belgium’s development cooperation faces a genuine test of institutional resilience over the next five years. Whether Enabel’s strong localisation record and civil society ecosystem can preserve programme quality despite a shrinking budget will likely determine how the cuts are ultimately judged.
Tax reform offers the clearest opportunity that does not depend on the same fiscal constraints limiting aid and climate spending. Closing the notional interest deduction loophole and renegotiating unfavourable double taxation treaties would cost Belgium comparatively little while directly addressing its documented role as a tax haven enabler.
RYB will track whether Belgium’s aid cuts stabilise near the new five-year targets or deepen further, and whether renewed reckoning with its colonial history extends into concrete reforms of the tax and trade relationships that still shape its former colonies’ economies today.
Sources and References
- Devex, “Belgium just cut its foreign aid by 25%. Does anybody care?” — devex.com
- Donor Tracker, Donor Profile: Belgium — donortracker.org
- OECD, Development Co-operation Profiles: Belgium — oecd.org
- OECD, “Cuts in official development assistance: Full Report” — oecd.org
- Belga News Agency, “OECD: Belgian development aid fell by 17 per cent in 2025” — belganewsagency.eu
- Frontiers in Political Science, “Development cooperation under pressure from budget cuts: strategies and restructuring among Belgian NGOs” — frontiersin.org
- Openaid.be, “About Belgian Development Cooperation” — openaid.be
- Tax Justice Network, “Tax haven ranking shows countries setting global tax rules do most to help firms bend them” — taxjustice.net
- Tax Justice Network, Indexes & Tools — taxjustice.net
- US Department of State, 2024 Investment Climate Statements: Belgium — state.gov
- Coface, “Belgium: Country File, Economic Risk Analysis” — coface.com
- RYB, Netherlands — Global Development — redyellowblue.org/data/nl/
- RYB, Tax Havens and the Offshore World — redyellowblue.org/finance/tax-havens-offshore-world/
- RYB, Official Development Assistance (ODA) — redyellowblue.org/finance/oda/
Belgium
Kingdom of Belgium
Belgique / Belgie / Belgien
Population
11,913,633 (2023 est.)
11,778,842 (2021)
11,720,716 (2020)
11,491,346 (2017)
Capital: Brussels
Internet country code: .be
Government
Official website: belgium.be
National tourism agency: belgium.be/tourism
Statistics Belgium: statbel.fgov.be
Background
Belgium became independent from the Netherlands in 1830; it was occupied by Germany during World Wars I and II. The country prospered in the past half century as a modern, technologically advanced European state and member of NATO and the EU. Political divisions between the Dutch-speaking Flemings of the north and the French-speaking Walloons of the south have led in recent years to constitutional amendments granting these regions formal recognition and autonomy. Its capital, Brussels, is home to numerous international organizations including the EU and NATO.
Belgium’s own regional divide now shapes its aid budget directly: Flemish development spending has collapsed to its lowest share of national ODA in two decades, a domestic fault line running underneath the country’s broader retreat from its 0.7% aid commitment.