Saturday, October 24, 2009


Guatemalan Congress in session.


Belize has a problem with economies of scale. In Belize a small country of 6000 square miles and a small population of 300,000, of which 85% are under 15 years of age, the idea that we as a small country can do all those things that larger countries can do is ridiculous. Half of our land area is in Forest Reserves and National Parks. We do seek investors from foreign lands to assist us in expanding our manufacturing and exporting capabilities.
The Guatemalan Congress has just approved a system of cross border product development for Belizeans, through Melchor de Menchos on the WESTERN BORDER and later probably down in Jalacte to our SOUTH, when the road gets finished to the Guatemalan border. What we needed is the processing and packaging capabilities of our larger friendly neighbor of Guatemala, to assist small entrepreneurs in Belize in exporting and adding value through packaging and processing, to products we can produce on a small scale, for the PREFERENTIAL trade market comprised of the Caribbean island countries and Central America. Called CARICOM, the island countries of the Caribbean give us a captive advantage in selling our goods theoretically to CARICOM countries in preferential custom duties. What we lacked because of our small size was the capability to do this VALUE ADDED PROCESSING on our small scale. Guatemala has solved this dilemma. We also can ship into the Central American common market.
The new agreements allow Belizean entrepreneurs to ship food stuff over to Guatemala and get it packed, labeled and processed and then ship the finished product to CARICOM, or other markets. The agreement eliminates non-tariff barriers, gives preferential margins on other tariffs and establishes modern regulations on the phyto-sanitary and technical requirements involved mostly to do with food products. What it means in a nutshell, is that the transit barriers of shipping unprocessed raw agricultural and food products across the border to Guatemala for processing and then on forwarding, as export shipping to a third country, can now give Belizean entrepreneurs needed capability that were until now unaffordable, because of the limited size of our small country production. We can use Guatemala industry to package and process our products were needed.
Most of this PARTIAL SCOPE agreement between Guatemala and Belize was started by the PUP government of the past administration. The idea back in 2006 was to enable Belizeans to sell and ship to Central American countries and also re-ship Value Added products to CARICOM and other export markets. It has taken SIX years of political and bureaucratic work to reach this point. The big advantage is being able to LABEL your finished Value Added Product, as MADE IN BELIZE, or MADE IN GUATEMALA, to take advantage of tariffs and customs charges reductions in both Central American Common Market and the CARICOM common market. Of course the major advantage is being able to do a professional modern job of processing and packaging, for which our small nation does not yet have enough population and investment size to afford to do properly yet. Sometimes the machinery to do so are bigger than our crop size can afford.
Belize as a population and a country are so much smaller than our neighbors in Central America, the trade deficit is quite large. In 2008 more than $114.7 million dollars were imported from Guatemala to Belize. We in Belize exported in return about $4.5 million to Guatemala. Our exports to the general Central American, 6 country market runs around $120 million.
Our goal is to be able to build up to economies of scale from cottage industry amounts to very large amounts as we establish a BRAND NAME for MADE IN BELIZE PRODUCTS. This in turn will stimulate production of specialized crops, similar to what we have now with Papayas for the USA market and Habenero Peppers for the USA market.
Overall, Belize imports roughly $1.8 billion and exports about $686 million. There is a nice living to be made by keen entrepreneurial business types through this agreement. It will take a bit of sharp thinking and finagling to figure out how to take advantage of these opportunities, but they are certainly there. A new class of middle men, international traders are going to evolve out of this in Belize. Only those with an ability to imagine, innovate and think ahead need apply.

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