Thursday, December 17, 2009


By Ray Auxillou, Dec. 16, 2009

Belize is a very small country, with a land mass of around 6000 square miles. Half of which is in so-called protected areas for wild life and natural pristine conditions.
Tourism inflows and their foreign exchange are a big supplier of jobs, mostly at the family level. The rest of the economy comes from exports. In the past; exports of bananas, sugar and citrus have dominated the economy of Belize. In the past recent years, the export of small pockets of crude oil, and fish products, both from very limited natural stocks and later from fish farming and shrimp farming. In agriculture, both corn and beans are becoming important export items. There are smaller endeavors just developing in niche products, like export of papaya and habenero peppers and FAIR TRADE jungle grown cacao. There is just now in 2010, the tipping over from a bulk commodity exporter economy situation, to the point of value added processing economy, as in light manufacturing. Mostly in food processed products. This is still all cottage industry, very small scale, considering the whole population is only 300,000 people. Of this, the adults are about 60,000 both men and women. If you assign most women to the traditional role of looking after the family and home, then the productive labor and man power of this small country is about 30,000 adult male persons.
Our GDP is around half a billion usa CURRENCY.
Our national debt runs on estimates somewhere between 80% of GDP and 120% of GDP. All the governments since colonial times have pursued a development foreign loan policy of running our small government. Inadequate as it is, this government of ours in size, the Belize government is still far more expensive than we can afford. Yet any country to develop requires constant infra-structure inputs and maintenance. The last two decades have seen a switch from foreign contractors working as a requirement of foreign loan borrowing, to build our infra-structure; to local engineers and the private sector in building roads, bridges, school buildings, water towers for villages, the health system and so on, replacing foreign contractors.
The skill level is steadily rising with population growth and better orientated education systems.
It is crucial for the immediate next ten years, that our small country and even smaller population concentrate on exporting. Most of the technology, machinery and other equipments needed in any modern government and country, require importing from the more advanced countries. We badly need the foreign exchange to purchase these imports, to increase our private sector exports and foreign exchange earnings. To get foreign exchange we need to export and sell the outside world.
RESEARCH AND DEVELOPMENT are important factors in developing our small country and enabling self sustainability. For the most part, this has been a function of the PRIVATE SECTOR. What was in the past, an insurmountable task, has become easier with the advent of the internet. We still cannot get decent DSL internet speeds in most of the rural areas where the private sector are struggling to improve their own lives and which incidentally at the same time, increase our foreign exchange earnings. I can remember it taking anywhere from two to three years to explore a new idea, in research and development, by slow mail; which today is done in as many weeks via the internet world wide communication system where it is available in the countryside.
Probably the most important factor in RESEARCH AND DEVELOPMENT is the availability of high speed DSL internet. We are still a long way from achieving this. At the moment, internet is confined primarily to the nine towns scattered throughout Belize and in some cases, only in narrow sections of those towns. We have hopes that the next ten years will see DSL internet become available nationwide. The contradictory factor here, is that ECONOMIC DEVELOPMENT relies on knowledge, the knowledge is coming from the internet and the nation is divided between producers and the bureaucrats. The bureaucrats have DSL internet, but the PRODUCERS for the most part do not have DSL internet, if they have internet at all. The economic growth of the nation relies on the PRODUCERS.
Business opportunities abound. Mostly orientated to exporting and nowadays that exporting is at the threshold of changing over from bulk commodities to value added, process packaged products. The population of Belize is expected to double in the next 12 years. Jobs must be created and it is the PRIVATE SECTOR that will have to create those jobs. For the immediate near future, those jobs undoubtedly will be cottage industry, small scale food processing, this is the most likely direction. We can import our own bulk commodities from places like Mexico and Guatemala and process and package them and re-export. This is foreign as of yet to the thinking of the education establishment in their business courses and teaching, but certainly uppermost in the very small number of private sector ambitious entrepreneurs. Bamboo furniture manufacturing exports is one such success story.
None of the business envisaged developing in Belize over the next dozen years are going to be big businesses. We are talking only between $1 million and $10 million USA in foreign exchange earnings each. Yet there is a whole raft of small scale niche ideas.
The past governments have been heavily monopoly orientated. Political greed has been the biggest obstacle faced by the nation, as the PRIVATE SECTOR tries to grow. It is only with the current administration that competition is being encouraged. One good example has been the provision of electricity. Our only sugar mill will be producing electricity for the national grid in another month. Another bottling businessman imported a WARTSILA crude oil diesel plant and is making money selling electricity to our national grid. PRIVATE SECTOR, RESEARCH AND DEVELOPMENT is looking to get some factual statistics on consumption projections for the electricity market. At the moment we still rely heavily on importing electricity from Mexico. Rough projections estimate we will use three times the current amount of electricity consumed in the country in twelve more years as our population doubles and our entrepreneur base explodes. So electricity production is another private sector good investment.
Our educational establishment lack the skills currently, to advise our PRIVATE SECTOR on marketing and opportunities for whatever export products we can produce and sell around the world. There is practically no knowledge available of the PERSIAN GULF, Arabian markets and needs for example. There is no knowledge of food and raw material timber products we could sell to Japan, Korea, or China. Traditionally there is a fixation on marketing to the United Kingdom and the United States of America. This is broadening somewhat a little bit, to include other European Union marketing chain store wholesale suppliers.
The FINANCIAL SECTOR in Belize is doing as well as can be expected. Unfortunately the European Union countries and the United States of America are fighting to control and stop upstart small countries like Belize from competing for world market share. They are doing this in a sophisticated manner beyond the abilities, most of the time, for our small rural population to understand. They use controls and paperwork bureaucratic weapons, with which we are unfamiliar and which our politicians are easily bribed, or seduced by skilful arguments against our own interest. The desire of some private sector machinists and inventors to enter into the supply of security guard shotguns for local Central America export market, was killed outright by our last Prime Minister, the local media hint, at the pressure from the USA. This Prime Minister even passed laws to forbid, research and development such entrepreneurship light manufacturing exports might develop in any kind of export military orientated hardware. Hardly an enlightened political leadership policy.
Technologically in our nine small towns, the young adults are managing to stay up on developments. Mostly to do with telecommunications fields. I’m constantly surprised at how well they are doing.
Where we are going economically in the private sector in Belize, is an international presence, in trading of all kinds. So far, our government sector has not yet caught up to this. If the government goes one way, in restrictive philosophy and the private sector is thwarted by lack of government encouragement and support, then economic growth of Belize generally suffers.
A fast growing middle class in both our neighbors, of Mexico and Guatemala are changing the dynamics of both countries. They are in their own way becoming world competitors. Mexico is expected to surpass the United Kingdom for exports within the next 25 years. Mexico has more free trade agreements with other countries than any other country in the world. Their light manufacturing base is quite sophisticated, equal to anything coming out of Europe. Monterrey and Guadalajara in Mexico are dynamos of innovation. Monterrey is the huge area based on knowledge and the production of engineers, technology and technicians. Guadalajara is known for food, electronics, drink and other creative type industries. There are clusters of global orientated economic industries designed to compete and capture world market share here. You can learn more from Mexico than from the U.K. The U.K. is the past, Mexico is the present and future in exporting products.
DEVELOPMENT in Belize is reliant on population growth. This in turn relies on more focused education than presently available. Much of development will come from immigrants and investment projects, not so much from our small entrepreneurial base. It is the exposure of immigrants to their economies of country origin ( such as China, Arabia, or India ) that leave them better skilled in adapting to opportunities for export from Belize. Much of agriculture development in Belize has come from USA immigrant pioneers for example.
Research and Development in Belize takes on many different aspects. There is no narrow focus appropriate. You never know where the next successful business is going to come from. An open mind is needed all the time. Can the government of Belize help with Research and Development? Certainly they are in the field of agriculture. Can they do it in foreign marketing? Unlikely, though we are hopeful. In marketing, the supply of DSL internet, to producers in rural areas is probably the most significant encouragement government could do at the present time. Tax breaks for companies exporting, is probably one area which the government could provide incentives. Making land titles quickly available for new investment is probably another. The slow uncertainties involved with immigration visas, residencies and citizenship are drawbacks to people immigrating to Belize.

1 comment:

Pattimontreal said...

I read your blog with great interest. Might I mention that you failed to mention tourism which of course brings income from a worldwide source? R&D is crucial to all international development - I very much see your point. Cacao, coffee, many agricultural products are compatible with/more desirable as a result of the presence of the jungle. There must be something Belize could develop and export that would rock some socks internationally yet remain environmentally VERY friendly.