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Travel & Tourism . Tourist Guide to the Country

Belize Economy



ECONOMY OF BELIZE

Forestry was the only economic activity of any consequence in Belize until well into the 20th century when the supply of accessible timber began to dwindle. Cane sugar then became the principal export and recently has been augmented by expanded production of citrus, bananas, seafood, and apparel. The country has about 809,000 hectares of arable land, only a small fraction of which is under cultivation. To curb land speculation the government enacted legislation in 1973 that requires non-Belizeans to complete a development plan on land they purchase before obtaining title to plots of more than 10 acres of rural land or more than one-half acre of urban land.

Domestic industry is limited, constrained by relatively high-cost labor and energy and a small domestic market. The U.S. Embassy in Belize City knows of some 185 U.S. companies that have operations in Belize, including MCI, Duke Energy International, Archer Daniels Midland, Texaco, and Esso. Tourism attracts the most foreign direct investment although significant U.S. investment also is found in the energy, telecommunications, and agricultural sectors.

A combination of natural factors--climate, the longest barrier reef in the Western Hemisphere, numerous islands, excellent fishing, safe waters for boating, jungle wildlife, and Mayan ruins--support the thriving tourist industry. Development costs are high, but the Government of Belize has designated tourism as its second development priority after agriculture. In 2000, tourist arrivals totaled 189,634 (more than 110,000 from the U.S.) and tourist receipts amounted to $113.3 million.

Belize's investment policy is codified in the Belize Investment Guide, which sets out the development priorities for the country. The "Country Commercial Guide" for Belize is available from the U.S. Embassy's Economic/Commercial section and on the Web at http://www.state.gov/www/about_state/business/com_guides/2001/wha/index.html

Infrastructure
A major constraint on the economic development of Belize continues to be the scarcity of infrastructure investments. Although electricity, telephone, and water utilities are all relatively good, Belize has the most expensive electricity in the region. Large tracts of land which would be suitable for development are inaccessible due to lack of roads. Some roads, including sections of major highways, are subject to damage or closure during the rainy season. Ports in Belize City, Dangriga, and Big Creek handle regularly scheduled shipping from the U.S. and the U.K. although draft is limited to a maximum of 10 feet in Belize City and 15 feet in southern ports. International air service is provided by American Airlines, Continental Airlines, and TACA to gateways in Dallas, Houston, Miami, and San Salvador.

Several capital projects are either currently underway or are programmed to start in fiscal year 2001/2002. The largest of these is a $15 million rural electrification program to be jointly implemented by the government and Belize Electricity Limited (BEL). In addition, the government will continue to implement an Inter-American Development Bank Emergency Reconstruction Fund of $20 million aimed at restoring essential services such as health and education facilities and transportation networks to communities which were severely damaged by Hurricane Keith. The government will also invest close to $4.2 million in projects targeted at poverty alleviation across Belize.

Initiated in 1999, the Ministry of Agriculture and Fisheries, through the Belize Agricultural Health Authority, will continue to implement the IDB-funded "Modernization of Agricultural Health Project." This $2.5 million project seeks to improve the competitiveness of Belize's agricultural products and thus enhance the ability of Belizean farmers and processors to maintain and expand the sale of their high-quality products to foreign markets. A $5 million soybean project, funded by the Brazilian Government, is scheduled to begin in 2001 and is intended to assist northern Belize farmers to diversify away from sugarcane cultivation.

The government also plans to invest $9.85 million to complete the rehabilitation of the Hummingbird Highway, as well as investing $9.5 million in its health-sector reform program. Another $9 million will be invested under the IDB-funded "Land Management Project" over the next 2 years. The Ministry of Tourism is confident that another IDB-funded project, the "Tourism Development Project," will make Belize the Mundo Maya centerpiece for travelers to Central America. The government will spend close to $1.4 million in improving access to archaeological sites in Belize, especially "Caracol." Using a generous soft loan from Taiwan, the government is funneling $50 million toward the construction of low-cost housing.

Trade
Belize's economic performance is highly susceptible to external market changes. Although moderate growth has been achieved in recent years, the achievements are vulnerable to world commodity price fluctuations and continuation of preferential trading agreements, especially with the U.S. (cane sugar) and U.K. (bananas).

Belize continues to rely heavily on foreign trade with the United States as its number one trading partner. Total imports in 2000 totaled $446 million while total exports were only $228.6 million. In 2000, the U.S. accounted for 48.5% of Belize's total exports and provided 49.7% of all Belizean imports. Other major trading partners include the U.K., European Union, Canada, Mexico, and Caribbean Common Market (CARICOM) member states.

Belize aims to stimulate the growth of commercial agriculture through CARICOM. However, Belizean trade with the rest of the Caribbean is small compared to that with the United States and Europe. The country is a beneficiary of the Caribbean Basin Initiative (CBI), a U.S. Government program to stimulate investment in Caribbean nations by providing duty-free access to the U.S. market for most Caribbean products. Significant U.S. private investments in citrus and shrimp farms have been made in Belize under CBI. U.S. trade preferences allowing for duty-free re-import of finished apparel cut from U.S. textiles have significantly expanded the apparel industry. EU and U.K. preferences also have been vital for the expansion and prosperity of the sugar and banana industries.


Belize    Economy Top of Page
Economy - overview: The small, essentially private enterprise economy is based primarily on agriculture, agro-based industry, and merchandising, with tourism and construction assuming greater importance. Sugar, the chief crop, accounts for nearly half of exports, while the banana industry is the country's largest employer. The government's tough austerity program in 1997 resulted in an economic slowdown that continued in 1998. The trade deficit has been growing, mostly as a result of low export prices for sugar and bananas. The tourist and construction sectors strengthened in early 1999, supporting growth of 6% in 1999 and 4% in 2000. Aided by international donors, the government's key short-term objective remains the reduction of poverty.
GDP: purchasing power parity - $790 million (2000 est.)
GDP - real growth rate: 4% (2000 est.)
GDP - per capita: purchasing power parity - $3,200 (2000 est.)
GDP - composition by sector: agriculture:  18%

industry:  24%

services:  58% (2000 est.)
Population below poverty line: 33% (1999 est.)
Household income or consumption by percentage share: lowest 10%:  NA%

highest 10%:  NA%
Inflation rate (consumer prices): 2% (2000 est.)
Labor force: 71,000

note:  shortage of skilled labor and all types of technical personnel (1997 est.)
Labor force - by occupation: agriculture 38%, industry 32%, services 30% (1994)
Unemployment rate: 12.8% (1999)
Budget: revenues:  $157 million

expenditures:  $279 million, including capital expenditures of $NA (1999 est.)
Industries: garment production, food processing, tourism, construction
Industrial production growth rate: 4.6% (1999)
Electricity - production: 185 million kWh (1999)
Electricity - production by source: fossil fuel:  56.76%

hydro:  43.24%

nuclear:  0%

other:  0% (1999)
Electricity - consumption: 172.1 million kWh (1999)
Electricity - exports: 0 kWh (1999)
Electricity - imports: 0 kWh (1999)
Agriculture - products: bananas, coca, citrus, sugarcane; lumber; fish, cultured shrimp
Exports: $235.7 million (f.o.b., 2000 est.)
Exports - commodities: sugar, bananas, citrus, clothing, fish products, molasses, wood
Exports - partners: US 42%, UK 33%, EU 12%, Caricom 4.8%, Canada 2%, Mexico 1% (1999)
Imports: $413 million (c.i.f., 2000 est.)
Imports - commodities: machinery and transportation equipment, manufactured goods; food, beverages, tobacco; fuels, chemicals, pharmaceuticals
Imports - partners: US 58%, Mexico 12%, UK 5% EU 5%, Central America 5%, Caricom 4% (1998)
Debt - external: $338 million (1998)
Economic aid - recipient: $NA
Currency: Belizean dollar (BZD)
Currency code: BZD
Exchange rates: Belizean dollars per US dollar - 2.0000 (fixed rate pegged to the US dollar)
Fiscal year: 1 April - 31 March

 

Countryfacts Information Courtesy: CIA Worldbook








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