Encyclopedia > Economy of Belize

  Article Content

Economy of Belize

The Economy of Belize

Forestry was the only economic activity of any consequence in Belize until well into the 20th century when the supply of accessible timber began to dwindle. Cane sugar then became the principal export and recently has been augmented by expanded production of citrus, bananas, seafood, and apparel[?]. The country has about 809,000 hectares of arable land, only a small fraction of which is under cultivation. To curb land speculation the government enacted legislation in 1973 that requires non-Belizeans to complete a development plan on land they purchase before obtaining title to plots of more than 10 acres of rural land or more than one-half acre of urban land.

Domestic industry is limited, constrained by relatively high-cost labor and energy and a small domestic market. The United States Embassy in Belize City knows of some 185 U.S. companies that have operations in Belize, including MCI, Duke Energy International[?], Archer Daniels Midland[?], Texaco, and Esso. Tourism attracts the most foreign direct investment although significant U.S. investment also is found in the energy, telecommunications, and agricultural sectors.

A combination of natural factors--climate, the longest barrier reef in the Western Hemisphere, numerous islands, excellent fishing, safe waters for boating, jungle wildlife, and Maya ruins--support the thriving tourist industry. Development costs are high, but the Government of Belize has designated tourism as its second development priority after agriculture. In 2000, tourist arrivals totaled 189,634 (more than 110,000 from the U.S.) and tourist receipts amounted to $113.3 million.

Belize's investment policy is codified in the Belize Investment Guide, which sets out the development priorities for the country. The "Country Commercial Guide" for Belize is available on the Web at http://www.state.gov/www/about_state/business/com_guides/2001/wha/index

Infrastructure
A major constraint on the economic development of Belize continues to be the scarcity of infrastructure investments. Although electricity, telephone, and water utilities are all relatively good, Belize has the most expensive electricity in the region. Large tracts of land which would be suitable for development are inaccessible due to lack of roads. Some roads, including sections of major highways, are subject to damage or closure during the rainy season. Ports in Belize City, Dangriga, and Big Creek handle regularly scheduled shipping from the U.S. and the United Kingdom although draft is limited to a maximum of 10 feet in Belize City and 15 feet in southern ports. International air service is provided by American Airlines, Continental Airlines, and TACA[?] to gateways in Dallas, Texas, Houston, Texas, Miami, Florida, and San Salvador.

Several capital projects are either currently underway or are programmed to start in fiscal year 2001/2002. The largest of these is a $15 million rural electrification program to be jointly implemented by the government and Belize Electricity Limited (BEL). In addition, the government will continue to implement an Inter-American Development Bank[?] Emergency Reconstruction Fund of $20 million aimed at restoring essential services such as health and education facilities and transportation networks to communities which were severely damaged by Hurricane Keith[?]. The government will also invest close to $4.2 million in projects targeted at poverty alleviation across Belize.

Initiated in 1999, the Ministry of Agriculture and Fisheries, through the Belize Agricultural Health Authority, will continue to implement the IDB-funded "Modernization of Agricultural Health Project." This $2.5 million project seeks to improve the competitiveness of Belize's agricultural products and thus enhance the ability of Belizean farmers and processors to maintain and expand the sale of their high-quality products to foreign markets. A $5 million soybean project, funded by the Brazilian Government, is scheduled to begin in 2001 and is intended to assist northern Belize farmers to diversify away from sugarcane cultivation.

The government also plans to invest $9.85 million to complete the rehabilitation of the Hummingbird Highway, as well as investing $9.5 million in its health-sector reform program. Another $9 million will be invested under the IDB-funded "Land Management Project" over the next 2 years. The Ministry of Tourism is confident that another IDB-funded project, the "Tourism Development Project," will make Belize the Mundo Maya centerpiece for travelers to Central America. The government will spend close to $1.4 million in improving access to the Maya archaeological sites in Belize, especially Caracol. Using a generous soft loan from Taiwan, the government is funneling $50 million toward the construction of low-cost housing.

Trade
Belize's economic performance is highly susceptible to external market changes. Although moderate growth has been achieved in recent years, the achievements are vulnerable to world commodity price fluctuations and continuation of preferential trading agreements, especially with the U.S. (cane sugar) and U.K. (bananas).

Belize continues to rely heavily on foreign trade with the United States as its number one trading partner. Total imports in 2000 totaled $446 million while total exports were only $228.6 million. In 2000, the U.S. accounted for 48.5% of Belize's total exports and provided 49.7% of all Belizean imports. Other major trading partners include the U.K., European Union, Canada, Mexico, and Caribbean Common Market[?] (CARICOM) member states.

Belize aims to stimulate the growth of commercial agriculture through CARICOM. However, Belizean trade with the rest of the Caribbean is small compared to that with the United States and Europe. The country is a beneficiary of the Caribbean Basin Initiative (CBI), a U.S. Government program to stimulate investment in Caribbean nations by providing duty-free access to the U.S. market for most Caribbean products. Significant U.S. private investments in citrus and shrimp farms have been made in Belize under CBI. U.S. trade preferences allowing for duty-free re-import of finished apparel cut from U.S. textiles have significantly expanded the apparel industry. EU and U.K. preferences also have been vital for the expansion and prosperity of the sugar and banana industries.

Economy - overview: The small, essentially private enterprise economy is based primarily on agriculture, agro-based industry, and merchandising, with tourism and construction assuming greater importance. Sugar, the chief crop, accounts for nearly half of exports, while the banana industry is the country's largest employer. The government's tough austerity program in 1997 resulted in an economic slowdown that continued in 1998. The trade deficit has been growing, mostly as a result of low export prices for sugar and bananas. The new government faces important challenges to economic stability. Rapid action to improve tax collection has been promised, but a lack of progress in reining in spending could bring the exchange rate under pressure. The tourist and construction sectors strengthened in early 1999, leading to a preliminary estimate of revived growth at 4%.

GDP: purchasing power parity - $740 million (1999 est.)

GDP - real growth rate: 4% (1999 est.)

GDP - per capita: purchasing power parity - $3,100 (1999 est.)

GDP - composition by sector:
agriculture: 22%
industry: 22%
services: 56% (1998)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): -0.9% (1999 est.)

Labor force: 71,000
note: shortage of skilled labor and all types of technical personnel (1997 est.)

Labor force - by occupation: agriculture 38%, industry 32%, services 30% (1994)

Unemployment rate: 14.3% (1998)

Budget:
revenues: $140 million
expenditures: $180 million, including capital expenditures of $NA (1997)

Industries: garment production, food processing, tourism, construction

Industrial production growth rate: -4.4% (1998)

Electricity - production: 175 million kWh (1998)

Electricity - production by source:
fossil fuel: 57.14%
hydro: 42.86%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 163 million kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: bananas, coca, citrus, sugarcane; lumber; fish, cultured shrimp

Exports: $150 million (f.o.b., 1998)

Exports - commodities: sugar, bananas, citrus fruits, clothing, fish products, molasses, wood

Exports - partners: United States 45.5%, United Kingdom 30%, European Union 10%, Caricom 4.2%, Mexico 3.4%, Canada 3.3% (1997)

Imports: $320 million (c.i.f., 1998)

Imports - commodities: machinery and transportation equipment, manufactured goods, food, fuels, chemicals, pharmaceuticals

Imports - partners: US 52%, Mexico 13%, UK 5% (1997)

Debt - external: $380 million (1997)

Economic aid - recipient: $23.4 million (1995)

Currency: 1 Belizean dollar (Bz$) = 100 cents

Exchange rates: Belizean dollars (Bz$) per US$1 - 2.0000 (fixed rate)

Fiscal year: 1 April - 31 March

Reference Much of the material in this article comes from the CIA World Factbook 2000 and the 2003 U.S. Department of State website.

See also : Belize



All Wikipedia text is available under the terms of the GNU Free Documentation License

 
  Search Encyclopedia

Search over one million articles, find something about almost anything!
 
 
  
  Featured Article
Emperor Junnin of Japan

... from Emperor Junnin of Japan Emperor Junnin (淳仁天皇) (733-765) was the 47th imperial ruler of Japan from 758 to ...