Duchatelet: “The football business doesn’t suit me”

Roland Duchatelet has given an interview this week to journalists Erik Raspoet and Michel Vandersmissen of the  Belgian magazine "Knack". We are grateful to Heather McKinlay for the translation:

Part 1:  Football

A few days ago, entrepreneur Roland Duchâtelet was once again in the British press, from the tabloid The Sun to the institution of The Times. It was buzzing again at his London football club, Charlton Athletic. It turned out that the youth players no longer receive bottled water due to cutbacks.

Mr. Duchâtelet, what a harsh man have you become.
Roland Duchâtelet: (unperturbed) I drink only from the tap. Well, from now on they will also get water from the tap. They will not suffer thirst, and they will not play worse because of it. The club is making too many losses, so we need to pay more attention to the money. Moreover, it is an environmentally friendly measure.

What is a sober, rational entrepreneur actually looking for in football?
Duchâtelet: I've wondered about that myself too recently! (He laughs) It was a mistake. The football business doesn't suit me. Too irrational. If you want to lose real money, buy a football club. I've stumbled into it, as a sponsor at STVV.

Before you knew it, you owned more than five football clubs at home and abroad. Typical Duchâtelet? If you start something, do you take it all the way through?
Duchâtelet: Maybe, but it was mainly a question of efficiency. If you control five clubs, there are synergies, for example by allowing players to circulate from one club to another. I was one of the first to introduce that model. Meanwhile, many other clubs are doing the same, like Manchester City.

You certainly earned a great deal from the sale of Standard?
Duchâtelet: If only it was true. The only ones who really make good money in football are the agents. And the top players, of course, because internationalisation has pushed the wages of the players through the roof. You could call that scandalous, but that is the market. Football represents half of the world sports market, including tennis and the NBA (American profbasketball).

Will you sell all your clubs?
Duchâtelet: That's the intention, but I'm not in a hurry. Investing in football was the mistake of my life, but at the same time it was an interesting sociological experiment. The parallels with politics are striking. They are two worlds where emotions win over logical thinking.

On several occasions, you have openly been annoyed about the corruption in football. Is it so bad?
Duchâtelet: Especially in south eastern Europe there is gambling on competitions and match fixing. But in Western Europe it happens little or not at all.

And in Belgium?

Duchâtelet: Think back to the last matches of Moeskroen, the previous seasons. The investigation following KV Mechelen's complaint has stopped, but I do not think that the public prosecutor's office has investigated the case very thoroughly.

As the owner of football clubs, you have been put through the mill, first in Liège and then in London. Does that play a role in getting out of football?
Duchâtelet: The protests of the supporters don't really affect me, because I understand that they don't really know me, don't know what really happened and rely on social media and unscrupulous newspapers looking for thrills. My conclusion is that the recipes from the business world are totally unsuccessful in football.

So it would have been better if Marc Coucke had not bought Anderlecht?
Duchâtelet: Not if it is his intention to make money from it. I do think, however, that the investment fits into a broader strategy. Coucke wants to become a major player in the Belgian entertainment sector. Anderlecht fits in the list of Pairi Daiza and Durbuy

Part 2: Economy, including swipe at teachers and casual racism towards Portuguese cobble-layers.

To move on to something different. For five consecutive quarters the Belgian economy has been growing at a slower rate than the euro area average. How worrying is that?
People earn too little in this country. The purchasing power of Belgian households has not increased for fifteen years, while productivity has increased. That is completely underexposed.

Should wages increase, or should the burdens on labour be reduced?
Wages must rise, especially the incomes of pensioners. It is a disgrace that pensions in this country are so low.

Why is that?
In 1960, 30% of prosperity went to the government. It redistributed some of that wealth, and paid with the rest for education, the police, social security and so on. Now 52% of our gross domestic product goes to the government. One of the reasons for this is the addition of an expensive administrative level: the regions. Flanders already has 30,000 civil servants. The provinces that have become superfluous have not been abolished, while cities and municipalities are constantly increasing their staff numbers, as are the OCMWs.

Their tasks have also become larger and more complex.
The question is whether all this is meaningful and useful. Perhaps the authorities should think about whether they could organise themselves differently. Abolishing the provinces seems to me to be the first, obvious measure.

How do you intend to finance higher pensions?
It's not that difficult. Reduce the level of civil servants. Let me give you one example. In 1960, our country had 150,000 teachers. Now more than 400,000, while there are photocopiers, computers and the Internet that should actually have increased productivity there. The same evolution occurred in the healthcare sector. The government has fully absorbed the profit from private sector productivity gains over the last 15 years.

Are you saying that the 400 000 teachers are now working less hard than their colleagues in the 1960s?
I say that there are many who do wonderful work, but that there are too many and that they often do completely irrelevant and useless things.

The teaching profession is on the list of difficult professions.
Scandalous. As a student, I gave lessons myself. Nothing difficult about it. This list, and by extension the distinction between light and demanding professions, is an enormous stupidity. Moreover, the difficulty of a profession evolves with time and technology. Construction work used to be a hard task, but now if you tackle that well and use the latest techniques, it's pretty easy.

Laying cobbles is a gruelling profession. If you had done that for 30 years, you wouldn’t be piping up like this.
They’re all Portuguese. (laughs) Of course, there are demanding and less demanding professions, but it is subjective to make a distinction. In the end, this creates division among the population above all.

In order to keep pensions affordable, people will also have to work longer, as in the Netherlands.
You should not oblige people to work longer. The whole concept of a retirement age needs to be reconsidered. Let everyone decide for themselves. It goes without saying that you must be able to work completely untaxed after the age of 65, when you will have paid more than enough to the government.

You think that people earn too little. What is stopping you from increasing the wages of your 7000 employees?
Rest assured, our employees don't complain. (laughs) The problem is that an increase in wages has become unaffordable for employers. In the past, the wage cost of a person earning 100 euros net was 150 euros. If we want to give someone EUR 100 pay-rise today, it will cost us EUR 300. In fact, that means 200 euros of a rise for the government. Sorry, that's not serious.

Should we follow the Netherlands as an example, where the economy is growing more than twice as fast?
Certainly. The Dutch household income is considerably higher than the Belgian income. I was shocked by the difference. But we are also lagging behind Germany. Even France is doing well under President Emmanuel Macron.

But do we not have a business-friendly government? After all, the Michel government has started with a promise to tackle the government order.
To say they do nothing would be unfair. For example, the government's seizure has already fallen from 54% to 52%. Some good measures have already been taken, such as the introduction of flexi jobs and the possibility for pensioners and students to earn extra income. So it does move, but too little and too slowly.

Why is it so difficult to carry out structural reforms in our country?
Because of the way our democracy is organised.

But it is not organised in a fundamentally different way here than it is in the Netherlands or Germany, is it?
On the contrary. There is at least one policy level too many here: the regions or the provinces. As a result, there are far too many costly overlaps. The provinces certainly still need to be abolished, but unfortunately only the N-VA argues in favour of this. The other parties do not want it, because the provinces are a source of posts and a theatre for service. That is the crux of the problem: most of the politicians in this country are not innovative enough, they say what people like to hear. Disruptive thinking is not rewarded in politics, it’s the opposite.

Are we seeing any self-pity here? In 1999 you wrote NV Belgium, a book in which, among other things, the disruptive concept of basic income was launched. Twenty years later, nothing has yet come of it.
It's a short curve. In that book I launched even more new ideas, such as the tax shift. It has now been accepted in full, and everyone now agrees that we should tax added value more and labour less.

But we were talking about the Basic Income....
It's not there yet, that's right. But more and more leading economists are supporting the principle, including Geert Noels, Peter De Keyzer and Karel Van Eetvelt. The Basic Income has influential fans in Silicon Valley, such as Mark Zuckerberg of Facebook and Elon Musk of Tesla.

Last year, a survey showed that the Flemish people are not enthusiastic about it.
Ordinary people are afraid of change. They have all been raised with the idea that they have to study hard in order to find a good job afterwards, and that they then have to work hard in order to earn a lot of money. They cannot countenance people receiving money without something in return. That messes with their image of mankind. Conservative forces, such as the N-VA, will never support basic income because they realise that they will immediately lose three quarters of their voters.

In Finland, an experiment on basic income has recently failed.
Failed is exaggerated, they have stopped it prematurely. Not surprisingly, because from the beginning there was already doubt about the way in which the experiment was designed. There are very interesting projects going on worldwide. Macao, which, like Hong Kong, has an autonomous status within the People's Republic of China, has a basic income of approximately one month's income per year. It is a kind of thirteenth month that is handed out to the population by the government, without conditions. The idea of a basic income is also growing strongly in India. Not by chance, because countries such as India have nothing holding them back in this area.

What do you mean?
They can start from scratch. Because they do not have proper social security, they do not need to stand up to established forces, such as trade unions or health insurance funds, who have an interest in ensuring that the existing system is not affected.

The Open VLD, your preferred party, is also not a big fan of the basic income.
Guy Verhofstadt was in favour, but Alexander De Croo is against. The deep-blue electorate of the Open VLD, often self-employed people who find it difficult to find suitable personnel, shudder at the idea of handing out money. They fear that it will be even more difficult to find a working population.
Part 3: the generals and Tesla
You said recently in the newspaper De Tijd that you would certainly not vote for the N-VA because that party wants to buy expensive fighter planes. Surely the Liberals are of the same opinion on this? Would it not be better for you to vote for the SP.A?
Duchâtelet: Note: I will never vote for the Socialists! (laughs) But equally: it is a colossal folly to buy fighter planes in this day and age. Last week, Russian television broadcast a documentary about the weapons that the Russian army is developing. They wanted to show that they were ready for the war of the future. There is no trace of manned planes in these plans. Air force becomes a business of missiles, satellites, lasers and drones. Logical as well. Why should you invent a flying weapon with a human being in it? This has only disadvantages. A human does not tolerate great acceleration, you have to provide him with oxygen, an ejector seat and a parachute. Even the best pilot does not see as well as the sensors in a drone.Why does the Belgian Army command not see this? Generals are not idiots, are they?
Duchâtelet: I wouldn't underestimate the idiocy of generals. History is full of examples, such as the forts around Antwerp that were meant to stop the German army during the First World War. They cost a huge amount of taxpayers' money but had no effect. Just before the outbreak of the Second World War, the Germans and Japanese built huge battleships made of thick steel. The Bismarck, the flagship of the German fleet, was sunk on its very first outing. So much for the vision of those 'smart' generals. They are usually a war too late.

Through your company Melexis you supply chips to Tesla, the electric car of the flamboyant Elon Musk. What do you think about his recent antics, such as the announcement that he wants to take Tesla off the stock exchange – or then maybe not?
Duchâtelet: Tesla is one of the most shortened shares in Wall Street [Shorters speculate on a fall in price by selling borrowed shares and hope to buy them back later at a much lower price, ed]. I think Musk wanted to lure the shorteners through his tweet in which he announced that he had a deal to take his company off the stock exchange at a much higher price. It was stupid to say that the deal was done when it was not. Misleading stock market information, you can end up in prison for that.

What did you think of his emotional interview in The New York Times, in which he said he was overworked and overstressed?
Duchâtelet: I think it was a rationally considered decision to justify his irrational message. He realises that he went too far with the announcement that his stock market exit was a done deal. By claiming a moment of weakness as an alleviating circumstance, he hopes to avoid possible sanctions. I never believe that he is really on the verge of burn-out. Someone who has gone as far as Elon Musk has can always find something.

Do you recognise yourself in the story of the lonely CEO who works 120 hours a week, has no time to celebrate his birthday, and is constantly awake at night because of his company?
Duchâtelet: I am a peaceful sleeper. I know stress, but that is due to family circumstances. I can absorb company circumstances reasonably well.

Do you believe in the future of Tesla?
Duchâtelet: Musk has the merit of putting the electric car on the market as a hot and sexy product. In our country, I know many managers with a Tesla, such as Marc Coucke. Nowadays you have to drive a Tesla if you want to be at the top of the business world in Belgium.

Why do you still drive around in a modest Citroën?
Duchâtelet: I’m not so bothered about expensive cars, but I do follow the market and technology. If the big boys like BMW and Audi were to come up with their electric cars, then I would watch out, as would Elon Musk. Those German cars will be better than a Tesla, you shouldn't doubt that.

Part 4: Migration

Not long ago you came up with a striking analysis: ‘There are no jobs left for migrants that can carry taxes. As a result, they can no longer provide economic added value.’ That sounds harsh.
Duchâtelet: This is due to the way politicians and people think about the economy: the number of useful jobs that generate tax revenue will not increase any more. I am referring to jobs in the manufacturing industry, among other things. Not about jobs in health care and education, because they are in fact subsidised by productive jobs. A minister who creates jobs in healthcare or education is counterproductive in this logic because the others then have to pay even more taxes.

Labour experts, however, say that we should look for migrants because there are too few candidates in our country for some jobs. That is a strong argument, isn't it?
Duchâtelet: That is a different discussion. Successful migration countries such as the US, Canada, New Zealand and Australia have very selective migration policies. They only admit those who do have an added value. Europe will move in this direction. Migration is healthy and necessary, but only if it is well managed.

A German report last week showed that a surprisingly high percentage of recent asylum seekers from Syria, Iraq and Afghanistan had found work and did contribute to German society. Those newcomers really aren’t all highly qualified engineers.
Duchâtelet: People who risk their lives to flee their country and travel to Europe are fairly entrepreneurial. That is positive, but I think it is very convenient for Chancellor Angela Merkel to come up with such a positive migration story now.

According to you, Islam should be included on the list of prohibited sects.
Duchâtelet: Well certainly some strands. For years now, Belgium has had a list of prohibited and dangerous sects. Scientology is one of the better-known names on the list. Do you remember many suicide attacks or other attacks by followers of Scientology? I can’t. So surely I can wonder why extreme Islam is not on that list? There is definitely a problem. Years ago, we made the mistake of allowing Islam in as a peaceful religion in the naive belief that it is an innocent religion, a variant of Catholicism, open-minded and endowed with peace-loving intentions. Unfortunately, we overlooked the fact that some strands of Islam are not only a religion, but also an ideology with a dangerous political agenda.

Do you realise how polarising that sounds?
Duchâtelet: (unperturbed) In mosques and in some schools, ideas are put forward by Islamic teachers and imams that are not compatible with our laws and values. If we see anything like that, the government must close that mosque and expel the imams from the country. We are far too lax about this.

Muslims will feel offended by your statements.
Duchâtelet: Unfairly. I have nothing against believers, including Muslims, but they must accept that our laws take precedence over their religious rules. We have a harmonious society in which everything is fairly well organised. Here it is reasonably safe and prosperous. So when Muslims come here, they have to realise that they come as guests, and it is customary for a guest to adapt to the culture of the host country.

Second and third generation Muslims will not accept that. They were born here. Why, then, label them as guests?
Duchâtelet: They were born here, but they need to acknowledge that their parents came here as guests.

So once a guest worker, always a guest worker – even for two to three generations?
Duchâtelet: In genuine migration countries like Canada or New Zealand, I would never say anything like that. There you are a full citizen as soon as you are admitted as a migrant after thorough screening. But the second and third generation in Belgium? How did their parents end up here? It was the mismanagement of the governments at the time, which allowed virtually everyone in without any significant control. It is not only Belgium that is struggling with this. Correcting this mismangement is precisely what determines the political climate in Europe to a large extent. This is also very much the case in Germany.

Some will now wonder whether Roland Duchâtelet has become a Flemish Nationalist.
Duchâtelet: Not at all. Just write in large letters: I remain a supporter of migration. Of sensible migration, you understand.