Belize’s Economy Today
The economy of Belize continues to revolve around a number of key sectors, and GDP growth in the country is affected significantly by output in these areas, most notably agriculture. This makes the country’s economic performance particularly vulnerable to fluctuations in world commodity markets. Tourism, crude oil exports and International Business are also major contributors to the Belize economy, with tourists coming to Belize being the country’s main foreign exchange earner.
The immediate economic forecasts for Belize are relatively healthy, with growth for 2018 estimated at 2.1%. with agricultural output expected to rise alongside a growth in inbound tourism.
It is estimated that agriculture accounts for just under 10% of Belize’s GDP, and the country has a number of significant exports. Sugar and timber have always been staples, but the agriculture sector has undergone diversification and now bananas, citrus fruits and fish products are also important export products.
Agricultural exports do, however, tend to be subject to fluctuations in global commodity markets, a problem that Belize has been subject to even before independence and as far back as the 18th century (when it was still known as British Honduras) when the mahogany trade was already one of Belize’s primary exports. Forestry continues to this day to be a strong economic performer, although predominantly in the realm of preserving the country’s many forest reserves as eco-tourism destinations.
Since 1990 and the enactment of the International Business Companies Act, Belize has become a center for international financial transactions and offshore investment and banking. A Belize International Business Company is able to be organised in a more flexible way than is permitted in most other jurisdictions, and provides more privacy for shareholders and directors, who cannot be identified from public records. In addition, offshore companies registered in Belize are exempt from paying income tax.
Another way in which Belize has carved out a niche for itself in the global economy is in the e-gaming licensing industry (visit top5casinosites.co.uk to see major online casinos that are operating under a Belize e-gaming license). The Computer Wagering Licensing Act (1995), which was introduced in May 1996, enables gambling companies licensed in Belize to provide casino games and sports betting services for players who are based outside of the country. A number of major international gambling brands are therefore licensed to operate from Belize and this function continues to make an important contribution to the services economy.
Online gambling regulation has, however, become a much more competitive industry, particularly as a number of major countries, most notably the UK, have now introduced their own online gambling licensing and regulatory authorities. Nevertheless, the industry is still strong on Belize and there is potential for it to diversify and remain a key player by becoming a licensing authority for crypto-currency casino and sports betting based on blockchain technology.
Crude oils sales also play a role in the economy of Belize and, although prices are subject to great worldwide volatility, it has been an area in which there has been recent growth, with exports up $1.9 million in January 2018 compared with the same time in 2017, despite no change in production levels.
However, the exploration and development of oil fields is not straightforward in Belize, and so there would need to be a significant uptick in the price of crude for it to be worthwhile for oil companies to make further major investments in the country in the immediate future.
Tourism currently makes a direct contribution of just under 20% to Belize’s GDP, while the total contribution is over 45%. Around 13% of the country’s population is directly employed in the tourism industry and so its importance cannot be overstated. It is also shown that tourism has a positive effect on a number of other key economic sectors, notably the agricultural, international business and construction industries.
Ecotourism in particular is a growing sector, with the authorities increasing the number and range of protected natural and historical attractions in a bid to capture an ever-greater share of this burgeoning international market.
Places like the Great Blue Hole, Thousand Foot Falls, Caye Caulker, the Belize Barrier Reef and countless other natural and archaeological sites attract visitors from around the world, and numbers are only likely to increase as the economy becomes more tourism driven and the government and authorities become more proactive in promoting this specific sector of the tourist industry.