Economy

Overview


In the 1990s, the economy in Belize historically dependant on sugar, citrus and banana exports began to diversify into the tourism and shrimp farming industries. Also during the last decade, the tourism sector grew rapidly, becoming the country’s main foreign exchange earner. In 1999, the construction sector began to expand as a result of the new government’s initiative to fulfill its campaign promise of financing the construction of 10,000 new homes. The new administration, headed by the Peoples United Party, has embarked on a series of programs aimed at improving revenue collection, expenditure controls and budgeting and planning processes.

One of the first outcomes of these reform programs was the enactment of a new business tax code replacing the 35 percent across the board corporate income tax. The IMF has been concerned that the initial cost of the government’s simultaneous efforts to reduce corporate taxes, increase public spending on infrastructure and promote tourism and foreign investment would lead to very high fiscal deficits. To prevent increases in the fiscal deficit, Belize needs to create an economic environment that will further promote the taxable economic activities in the traditional and non-traditional industries.

According to the government of Belize, many international agencies have helped Belize in its development. These include multilateral agencies such as the International Bank of Reconstruction and Development (IBRD), Caribbean Development Bank (CDB), the European Economic Community (EEC), the United Nations Development Programme (UNDP) and the Inter-American Development Bank (IDB) as well as bilateral agencies such as the United Kingdom government, Canadian International Development Agency (CIDA), and the Taiwan and Mexican governments.

The Economic Cooperation Programme, which complements and forms an integral part of Belize’s National Development Plan, assists in guiding Belize’s development efforts from year to year. The economy of Belize traditionally was based on forestry, mainly the export of logwood, mahogany and chicle. The country’s economy is now based on agricultural development. But in recent years there has been a resurgence in forestry. The main exports are sugar, citrus, bananas, fish products (mainly lobster), timber and garments.

Several oil companies hold exploration or prospecting licenses. Oil was discovered in the north of the country in 1981, but not in commercial quantities. Tax concessions and other incentives encourage the development and diversification of manufacturing industries which include clothing and textiles for export, plywood and veneer manufacturing, matches, beer, rum, soft drinks, furniture, boat building and battery assembly.

Written by CountryWatch.com. Sources: The CIA Fact book and the Inter-American Development Bank. For additional sources please see Appendix B of this review.

Economic Performance



In 2000, Belize registered a growth rate of 4.5 percent due to increased activity in most sectors as compared to six percent in 1999. The agriculture sector, particularly citrus production, continued to perform well. The manufacturing sector expanded by five percent, led by increased production of sugar and citrus products. The international community reaffirmed its strong support for Belize’s Recovery Strategy and Reconstruction Programme following the devastation caused by Hurricane Keith in October 2000.

The disaster directly affected one-quarter of the Belizean population and caused nearly $280 million in damages and economic losses, according to an assessment by the U.N.’s Economic Commission on Latin America and the Caribbean (ECLAC). The government of Belize estimated that the damages were mainly done to the infrastructure, agriculture, fisheries and tourism sectors.

Written by CountryWatch.com. Sources: The CIA Fact book and the Inter-American Development Bank. For additional sources please see Appendix B of this review.

Balance of Payments



According to the latest data available, the current account deficit increased from 6.2 percent of the GDP in 1998 to 8.2 percent in 1999, as a result of a rise in imported goods in that year. With the intention of strengthening the Belize dollar, the government has increased the country’s international reserves to US$75 million or 1.9 percent of GDP. The improving foreign reserves level has been accompanied by a slower expansion of the external debt, which had increased sharply between 1995 and 1997. Latest 2000 figures show an increase in the international reserves from US$122.832 million compared to US$71.30 million in 1999.

Written by CountryWatch.com. Sources: The CIA Fact book and the Inter-American Development Bank. For additional sources please see Appendix B of this review.

Regional Situation:



With respect to regional economic developments, Belize should benefit from the continued efforts to increase trade within the region.. However, the slowing down of the U.S. economy could affect its economic performance adversely. (See Appendix B to Chapter III for the current Global Economic Snapshot.)

Belize
Macroeconomic Activity
Real GDP Per Capita

 

1996

1997

1998

1999

2000

Real GDP
(Millions of 1995$US)

617

640

663

693

734

Total Population
(Millions-Mid Year Average)

0.223

0.230

0.236

0.242

0.249

Real GDP Per Capita
(1995$US Per Capita)

2,762

2,786

2,810

2,858

2,946

Sources:

US CIA World Factbook, IMF World Outlook,
US Census Bureau International Data Base,
UN Statistical Yearbook, CountryWatch.com Calculations

Global Ranking

Gross Domestic Product
(Millions of 1995$)

Population
(Millions)

GDP Per Capita
(1995$)

Country

Rank

2000
GDP

Rank

2000
Population

Rank

2000 GDP
Per Capita

Belize

167

734

169

0.249

102

2,946

 

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