Tuesday, September 9, 2008



by Ray Auxillou, Sept,.9, 2008

There has been no comparative studies done by either the Education Department, or the Agriculture Department, Beltraide, or the Foreign Affairs Department on the effect the EU, Economic Partnership Agreement required by the European Union on January 1st, 2009 by Belize.

Unlike the rest of the Caribbean, the Belize Education Ministry has spent a couple of hundred million dollars the past few years on diversifying our education capabilities toward SELF SUFFICIENCY. We now have two Universities in Belize. One private and one government, the University of Belize the government system has a number of campuses. There is also a fledgling Community College system training youngsters in the necessary skills of vocational trades and soon license requirements. We are making software engineers and software programmers, and the newspapers are full of employment requirements for jobs within Belize, that once were the sole hiring of UK foreigners, or by foreign Commonwealth citizens. The employment curve due to better education programs and organization has blossomed in Belize and the Belize student nowadays have a whole lot of career paths to choose from, or businesses they can start up as independents. The thing is nobody anymore has to go abroad to get either a College skill, or a University Degree. This was not the story 15 years ago. Back then we exported our young people for education and export to industrialized countries like most CARICOM countries still do. In education and self sufficiency as a nation, we have diverged from most of the Caribbean countries.

With education certifications and degrees within Belize, the entrepreneur business building skills are expanding in steady small increments yearly. With the internet we have access to both knowledge and competitive markets. The snag in all this has been our small population. There are still not enough trained people to satisfy either the existing companies needs for trained people, but neither are there enough trained people available to exploit the myriad tens of thousands of business opportunities to export products to the world markets. It is our population size, that is the bottleneck.

87% of our success in changing the way Belize operates has come from new immigrants, with outside skills and knowledge and the drive that is incumbent upon a new immigrant to survive and make a living. Unlike extended family Belizeans, of a by-gone era, with support systems from family and relatives, our story in Belize is just like New Zealand, Australia, Canada and the USA. Our economic engine and the government tax revenues have been based on an incoming immigrant flow.

Different government department bureaucrats have from time to time, told me of opportunities for export opportunities. The bottleneck has been the lack of young trained people with the ambition and drive to take advantage of them. I am continuously looking and testing young people to mentor. The thing is; character, drive and honesty are my requirements, not so much skills which can be taught if necessary. This is the problem of every business person in Belize.

To export, and build our economy, and create jobs we NEED customs tariffs, that can be adjusted by the Cabinet ( the legislature doesn’t work in Belize ). The EPA desired by the European Union is to protect THEIR export industries and their jobs for their young people. The goals are diametrically opposed. Their gain will be our loss.

For example we have both materials and the knowledge to make chocolates for export in a niche gourmet market. We grow cacao and we have milk ( not enough ) and lots of sugar and molasses. Some cottage industries already produce these. We do lack young people who are entrepreneurs. Immigration should solve that. ( It takes about 15 years to do this, as one needs the second generation young people. ) What though, is the sense of starting a chocolate candy export business in competition with the rest of the world, and particularly the European Union, if we cannot compete? This story is endless, the opportunities I know of today are so many, I would have to lose 60 years off my age and start over. The revitalized Development Finance Corporation should assist in these entrepreneurial fields.

You have to consider ECONOMIES OF SCALE! Bigger markets like the EU, or CANADA, or the USA can produce chocolates, as in this example by the millions per day. Why bother in Belize, if the signing of the EPA will DEFEAT the protectionism offered by our customs tariffs?

Let me illustrate by a personal experience. 40 years ago, I wanted to make cement blocks like they did in Chetumal, Mexico on our frontier. I wrote to the Agency of International Development for advice in the USA. I wrote the Peace Corps, I wrote the Tropical Products Institute of the Department of Natural Resources in London, England. This was not the time of telephones and internet, but a time when correspondence to get answers took about two years to get any kind of answers in Belize. All the information, flyers, brochures and recommendations were for factories that would produce about 2 million cement blocks a day. Useless to me in Belize. About 15 years later I noted in San Ignacio, a very small town in Western Belize that local construction was being served by a two man operated welded up cement block machine producing 300 cement building blocks per day. I enquired where they got it? The entrepreneur told me he bought it in Guatemala for $1500 Belizean. Lately those same sized cement block machines are still being used in Belize, though they have improved somewhat by using a ¼ hp electric washing machine motor.

The point is; how can you compare an EU small factory producing 2 million blocks a day, to a two man operation and machine producing 300 blocks a day, which serves our market size locally? Most newer entrepreneurial industries in Belize are at the tip over stage, based on population size. All niche gourmet foreign markets will have to be entered by Belizeans for the foreseeable future in small quantities. They must start first as cottage industries in the local population and as skills and knowledge develop, you expand. This is a process taking years. The customs duties of Belize encourage and protect this. If the Prime Minister signs the EPA as it currently stands, we forfeit FUTURE DEVELOPMENT of the economy. We cannot compete without customs tariffs for the outside world products. We don’t have the SIZE. We can capture a niche market and develop same, which produces local taxes, foreign exchange and provides jobs for family members at least. It is the small family business that is the backbone of every successful nation in the world, including in the EU and the USA.

There are many other examples, but the point is; signing the EPA means sacrificing our future development and we might as well go back to the brain drain and train students for export. Reduce the population by exporting them and teach our government to live on reduced tax revenues. Going back to colonial days size and status. Make no mistake about it, this EPA is a momentous decision for Belize.

The argument offered on television by the Prime Minister is; that he cannot choose the EPA signing, predicated on the longer, or mid term future economy of Belize, but must only deal with what is NOW. He must sign the EPA to protect the sugar and banana incomes. No evidence has been presented to prove that statement, that we would lose our commodity exports. It is obvious that we would lose a preferential tariff, but how much is that and what would be the effects in dollars and cents? Who would benefit, or lose benefits? Sugar growers, banana growers, or the companies that own the product and export and distribute same? What is our net loss and how does that compare to the future of a building population and economy?

It is true, we are in a tip over phase of development. We do not yet have enough exports and the future is somewhat uncertain. Certainly all departments, both in Agriculture, business and education have been and are still doing their best to make available trained people to let us expand economically. The Prime Minister is right in a certain sense, that he must protect the NOW of $132 million of commodity exports. Is this EPA the only solution, is what I ask?

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