Wednesday, December 29, 2010


From the small business persons point of view, these are some of the changes and trends occuring in Belize.
The following is just off the top of my head and in no chronological order.
There is a lot of speculation from entrepreneurs going into business. Some of the problems in light manufacturing for instance are; the EPZ system the government has and the cost of customs duty on incoming parts and materials to manufacture things. The small start up is not big enough to go the more formal government EPZ route. The bookkeeping costs in time and labor make it prohibitive for small scale entrepreneurs. Incoming parts get charged duty on freight or postage. This is most often enough, to push the cost studies out of a profit target and thus cancel the whole idea.
Mainland China I am finding is becoming as expensive as the USA. It may be because of the small quantities we would order from Belize. Most shippers in Mainland China and Taiwan want to ship container loads. A container of anything in the parts stuff, is usually more than our small cottage industry entrepreneurs need. Chinese importers here in Belize are complaining of criminals in China who are taking your money and disappearing. It is hardly worth the cost to chase after them, even if they stay in business. I´ve heard of money in the amounts of $10,000 going missing. Much of trade is based on the HONOR system. You have to trust somebody. Goods out of China are becoming as expensive as ordering from the USA. If you add on freight costs and then having to pay local Belize duties on the freight as well, then it simply puts ordering from China out of the game. In the last couple of years a lot of small players, private outfits have opened up on the web from mainland China as middlemen, organizing and finding parts and products you might wish to import into Belize to re-manufacture into an export item. You can get small amounts nowadays, but my own agent in Guadong is not very good, or China is not producing the items I want in small quantities. I am finding small home garage type small producing material products in the USA cheaper than those of China. The service is quicker and more reliable too. China has now grown to be the biggest economy in the world, outdoing even the USA. Europe and the UK for example, are not even in the ballpark.
There is a need in Belize for boxes. Cardboard boxes for export with printing on them. As far as I have found so far, BRC is the most likely producer in Benque Viejo, but haven´t researched it yet. I see they are producing calendars with colored printing and photographs. That would lend itself to making small boxes for candies, biscuits, dehydrated fruit and chocolates for example. At the moment such boxes are being ordered by the few, trying new things, from the USA. I have a sample container for confectionary I´m saving which can be folded out of a calendar sized cardboard sheet, if it was cheap enough. Trouble is the small entrepreneur in Belize wants to try a dozen or so first and learn the problems with light manufacturing. Nobody as far as I know has explored this small needed local box packaging business. Food products for export, need the boxes, and the food itself we note from imports from Mexico, Turkey and Sri Lanka are now going to an aluminum foil type wrapper. Even some of our local chocolate makers are using them. They tell me they are importing the foil wrappers from Taiwan. From what little I can see, there is a business in Belize which will grow in this field. If an entrepreneur would import the rolls of foil, a cutter for sizing, the printing or photo onlay equipment and the crimping machines to sell the buyer food processor for export locally. At the moment such foils are imported from Taiwan as the cheapest source, but they want an order of half a million, which means Belize needs an entrepreneur who can start the foil wrapper business and grow with the economy over time. Much of what we import in the food line, can be made locally. Probably the local market size is not big enough, but for exporting the game is wide open. We can make and export gourmet cheeses, ginger biscuits, chocolates and many products small scale locally. Our biggest market would be Guatemala, Salvador and the world, via the internet through the post office.
For export, Belize needs packaging material. This is usually made of styrofoam. I´m not to sure how it is made, but we need to make it in Belize. We probably need liquids in the one gallon and 5 gallon size in hardware stores. The local importer would probably buy 55 gallon drums and if my experience is any guide, it is probably just a hand made mold and two part mixing of liquids to make the foam packaging we need to ship out exports, by either the postal service, or ocean freight.
I´ve been trying to find lenses to import to make Galileo telescopes. Unfortunately the cost of freight, or postage into Belize, plus customs costs, then manufacture and shipping out by postage keeps running the price over the targeted competitive price range for the product. It may be possible to manufacture the lenses here. I can get the object lense at a target price, but not the focal lense. So I´m planning a talk with my local window maker shortly and see if he can grind me focal lenses from plain glass from window making panes.´
The banking system and using Letters of Credit does not work well in Belize. I´m glad Barclays Bank left Belize. They ruined a perfectly good marine diesel small business I had with my supplier in Sweden. I only had to order and they would ship from Sweden and then send me an invoice and I would pay. The shipment would come and I would pay the bank and get the Original Bill of Lading to clear customs, but the bank would not pay my supplier and after several years of haggling the bank ruined my HONOR relationship with my supplier. Apparently they had a clerk inside the bank who was stealing, but preferred to write letters to my supplier ruining my reputation. Nor does the wire transfer system work anymore. The OECD is holding up wire transfers and the cost in TIME, LABOR and frustration to find your money and get it, is no longer practical to use for business. Smuggling couriers with millions of dollars is the preferred way nowadays. You require a private plane, or ship though. Money Exchange outfits have sprung up all over the world and the money transfer business has replaced banks and wire transfers.
We are having a big problem with getting US currency in Belize. It has always been so! The problem is a result of successive governments working on a borrow against the future system using foreign loans. The foreign repayment system on government foreign currency borrowing is eating up all the available money in foreign exchange. The guess estimate is that our government by borrowing against the future as a system , is now using about $400 million USA currency per year. Without being able to ship money out, as well as bring foreign exchange into Belize, a lot of business is crippled. The economy suffers and revenues do not expand as they should. Because we are fixed rate to the USA dollar and the Belize government borrows that foreign money years in advance, it is very difficult for local would be investors to compete with foreign investors this way. For the past nine years I´ve brought US currency into Belize in dribs and drabs, to invest in land and construction , and to live off. I´m just small fry, not even enough to compete with thousands of well paid politicians and senior bureaucrats here. Still, I´ve managed to save something. Now a new venture in the USA in a Private extended family HEDGE FUND, start up, requires my contribution to raise the CASH RESERVES for the fund to perform properly and safely. I find that I have sufficient savings in Belize currency to do my part, but I cannot convert it into foreign exchange where it is needed. Thus I´m stymied by our government´s actions in Belize. Very frustrating.
There is apparently a business for a small person with embroidery machine work. Making those Yucatan style embroidered type tapes to sew on to clothes for export on a cottage industry small scale via the internet, in small quantities. It is possible to buy Guyabara shirts over from Guatemala cheap and add the tapes with ready made embroidery tape. My wife has been making them using the backstrap loom, but this is highly labor intensive and expensive. The embroidery machines which run about $500 USA to $2000 USA could probably do it. They are available from Wal Mart in the USA. The price apparently depends on how many different colored threads you wish to use for the patterns you design. Right now we are still experimenting using tapes made by backstrap loom by hand. I like a lot of the Persian and Central Asian designs myself. With the internet this new stuff in Belize is easy to learn. You don´t have to go to College or University.
Senator Hulse a well respected government critic of policy, was saying in an article the other day, that integration with Central America might not be a good thing. He was referring to the idea that eventually we would have a common currency. Both Guatemala and Mexico our neighbors have floating currency. You can buy and sell currency contracts on the open world market. Belize has a fixed currency and our government in Belize spend the money they expect to earn from expanding population and business, usually up to 20 years into the future. The fixed rate to the US dollar has advantages and disadvantages. There is no way to separate for instance our own inflation depreciation in our currency from that of the USA. In Guatemala and most of the bigger economies of Latin America, they are constantly doing that inflation adjusting by the mechanism of International currency exchange trades. It runs around 6% a year in Guatemala. Mexico has a different system slightly. They seem to do a devaluation every 8 to 12 years, wiping out bank savings values in one slash. In between they sucker investors with offering high interest rates. The problem with different types of governments, Republics versus Parliamentary dictatorships such as ours, is that of controlling the spending by governments and bureaucrats. Government revenues have a way of expanding and contracting. When there is plenty, the governments do not save, they spend and spend and expand government usually. When revenues contract, there is huge pain in the government, as the size has become to big to handle financially. The cure is often worse than the disease. Many countries as the European Union shows and even the USA states and municipal governments are incapable of saving and running on fixed balanced budgets. Senator Hulse may have a worrisome point about a Central American currency, but I cannot see our leaders, either present, or future capable of managing our economy to the point that Belize would even be able to join a Central American currency. Our National Debt to GDP ratio shows that. We just do not have the management leadership in our political system organization model.

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