Tuesday, January 18, 2011



by Ray Auxillou, Jan. 19th.,2011.

The Belize economy is changing albeit slowly. The current UDP government is having difficulty adjusting to the realities of the world competition and business adjustments necessary to bring about a more flexible Belize competing on the world market stage. There have been lectures by imported persons instructing the bureaucracy on TRANSFORMATIONAL ECONOMICS. A new lecturer recently referred to the same subject but called it something else. The recent lecture was about the past two hundred years of GDP and an overall look at the economy of this geographical area for the last 450 years. In particular he showed statistically where at one time 200 years ago, for a long time, that the GDP of what is now an independent Belize guaranteed by the United Nations, was number 1, in the Caribbean basin of some 30 nations for a long period of time, but has slowly slipped steadily down to modern times. For the past 50 years we have been number 22 in a list of 30 countries of the Caribbean basin. Migration and immigration were a couple of the factors involved here. Back in the early 1960´s under the regime of George Price as First Minister under a colonial government, many educated Belizeans were forced into exile abroad by political use of the apparatus of the government system, to punish perceived debaters on things economic and political, by an autocrat.
Things have changed a bit politically, but there is still a problem economically because of the domination of the port of Belize City, the old colonial capital, over the election process and thus the control of the nation´s policies and government, by what are called ROYAL CREOLES. Those of the port who think and act in terms of party politics, plunder, nepotism, and seem to be trained and educated in the old colonial mindset of monopolies and party politics.
The most glaring example of this political side show and drag on the GDP and general economic decline, or stagnation, is continued by the current government in office, the UDP party who hold the reins of government. The example would have to do with the private sector, former citrus factory, nowadays more known as a juice factory. Belize had an established exports of whole grapefruit and oranges at one time, followed eventually by concentrate juices for these two fruits. The process of economic advancement eventually led to a foreign investor from the Eastern Caribbean building a new factory. The new factory under control of the Eastern Caribbean investor has broadened the product line of different fruit juices, instigated VALUE ADDED PROCESSING as a component of what was the well known familiar citrus industry. Belize has always been a small player in the field of citrus. We will remain for the next two decades a small player in the widened export finished retail products of more expanded tropical fruit juices, exporting to a niche retail market at higher profits for Belizeans and factory shareholders.
The problem lies with the outlook of the political cabinet. The ownership of the juice factory and control thereof has been under siege. Part of that destructive process has been the UDP government. The shares in this private sector investment is owned 51% of shares in an older Citrus Growers Association and the Eastern Caribbean Investor owning the other 49% shares, bolstered by protective investment agreements. In the meantime, restructuring developments in the newer developing fruit juice exports for the higher profitable, retail markets share holders 51% ownership, has been diluted by internal fighting in the CGA, as it is called and many members have split and after a Supreme Court case formed an alternative citrus Association. There are now two fruit associations, with the older and declining older one, supplying grapefruit and oranges, but retaining both the debts of that older grouping and the shares in the new juice factory. The newer Association of citrus growers, plus those groves owned by the factory itself, dominate the fruit product going through the new juice factory. The newer association lost their claim to those 51% of shares, as also they sacrificed the debts owed by that mismanaged older Association.
In the normal way of cutthroat business and the economics of business flexibility, the older CGA cannot pay their debts, without getting control of the Board of Directors of the newer juice factory, and plundering the value of the new juice factory by adding on loans, and lawsuits abound to do so. Recently the UDP government has been giving GRANTS and LOANS used by this older CGA smaller producing group, to pay for the lawsuits. This is an interference in the war of progress in the juice business. Both the new association of citrus growers deserve the right to buy some of those 51% shares on the open market, as do also private business people investors of a wider Belizean interest and also those newer people producing ground fruits like papaya, pineapple, papaya, coconuts, and other fruit trees like limes, and mamy apple. By selling shares, the older CGA get to clean their slate of their debts and loans. The juice factory is broadening it´s markets and capabilities. By the UDP government assisting the smaller older CGA make trouble and interfering in the economic adjustments by issuing GRANTS and LOANS to the older CGA, that are defeating economic diversification, increasing of exports and letting the battle for ownership shift to a broader shareholder base. Probably well intentioned, it is presumably hard for the UDP Cabinet to ignore financial aid, using our taxpayer dollars, but they should do so. The CGA is mismanaged and in debt and they have one good asset. It is only fair that new Belizean players enter into the competition for a piece of the juice factory shares. The CGA should be forced by their debts to sell off those shares they have as needed to pay off what they owe. Not be subsidized by the UDP Cabinet to the detriment of the new producer players needing that factory, those in particular growing the newer fruit crops, which undoubtedly over the next two decades will expand their plantings.
The problem is multiple. Partly it is votes. The older CGA represent about a 1000 votes in the next election and the UDP are gambling that their use of tax money to finance the CGA with more debts, loans and grants will pay off in the next election. This is a two edged sword, because there are a couple of years left before the next election and other Belizean growers of different kinds of tropical fruits are going to resent their exclusion from the economic shift in share holder ownership of this newer juice factory. Which represents a major paradigm shift in export products.
Not apparently known by local Belizean participants in our provincialism, is a paradigm shift in the wider world markets for beverage sales competition. Fruit juices, particularly tropical fruit juices are finding new bigger expanding markets. The major players and Coca Cola is foremost among them is buying up factories such as our juice factory, all over the world. They have vending machines now in colleges, schools and universities dispensing not only traditional soft drinks, but also fruit juices. The new vending machines are tied to central computers worldwide and each time a customer buys a coconut water, or mango juice, or any other kind of the newer vending machine beverages, the statistics are shot each night back to sophisticated computers telling the International corporate world headquarters, what exactly are the most popular new drinks in the world and local regional markets. Coca Cola is on a buying spree, they are worldwide, have the money and well placed. Their growth has been stagnant, but they are intent on staying ahead in the beverage retail field. Undoubtedly one day they, or some other competitor will gobble up the shares of our very small juice factory. In the new marketing studies, strangely enough, coconut water is coming out very high in the popular ratings. Belize cannot stay out of this world village and competition. We are tiny in production, but with the new juice factory everything we can produce, can be exported and sold.
It behooves the UDP Cabinet to stay out of the struggle for ownership of the new juice factory. Indeed, the only role the government really has, is to enable expansion of alternate crops, like pineapples and other fruits to be made into juice for exports. The recent grants and loans given to the CGA are only delaying a modernization and restructuring process that needs to find it´s own conclusion, based on good management, dividends and profits.


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