How Belize’s Economy Has Been Shaped Over The Centuries

January 8, 2023
by Larry Waight +

Belize’s economy has gone through several changes throughout the centuries, reflecting the larger shifts the country has undergone at various points in its history. The story of Belize’s economic development has had many twists and turns, shaped by influences both within and without. The following will go over a brief history of the Belize economy so it can be understood within the relevant historical context.

The Early Days

The area now known as Belize was once part of the Maya civilization and the ruins of their great cities and ceremonial sites can still be seen in Belize today. This was a vast civilization of interconnected groups who participated in economic activity with one another.

Belize’s recorded economic history begins with the arrival of Europeans, who were interested in claiming the area for its natural resources. The Spanish had little interest in Belize because of its rugged terrain, remote location, hostile natives, and lack of gold and silver, but the British were very interested in its forestry resources. Spain willingly allowed the British to settle in Belize and begin harvesting timber as long as they helped the Spanish combat piracy, which had become very common in the waters off Belize’s coast.

Although the British did not take full control of the country until the end of the 18th century due to disputes with and within neighboring Mexico regarding the northern region of Belize, their presence stretched back to 1716 with the establishment of their first permanent settlement. Over the course of the following century, Britain brought enslaved Africans to Belize to put in place a systemic harvesting operation.

The first main export the British were interested in was logwood, which was used to make valuable dye. Supply proved greater than demand eventually as people in Europe developed artificial dyes that were less expensive, so mahogany became the main driver of the region’s economy after that. It was highly prized for furniture making, shipbuilding, and woodworking.

Mahogany trees were found abundantly in Belize’s forests, and many traders and merchants made good money from the exports. Unfortunately, the mahogany industry as a whole did not partake in good forestry practices. New trees were not planted, and mahogany trees are slow-growing. Loggers were forced to go farther and farther inland for trees, destroying much of Belize’s forests and getting into conflicts with natives in the process. The mahogany industry was also somewhat volatile and would have its ups and downs, which had major impacts on Belize’s economy as it fluctuated.

For decades, Belize was part of the British Empire as British Honduras, so its overall economy was connected to and part of the larger British Empire. As the 20th century dawned, better technology made it easier to get timber from areas that had been previously inaccessible and transport them large distances, so production went way up.

Changes In The Mid-20th Century

The logging industry had formed the backbone of Belize’s economy for decades, but with increasing deforestation, sweeping social movements within Belize that demanded better conditions for workers, and export price fluctuations, Belize began shifting and diversifying its economy by the mid-20th century.

The Great Depression, though felt around the world, was especially cataclysmic for Belize’s economy because it caused Britain’s demand for timber to evaporate. This led to major social movements within Belize as laborers began making serious demands for better conditions, rights, and wages. This was exacerbated by the government’s response to the economic downturn being viewed as inadequate.

Things improved during World War II as many of Belize’s men went to fight for Britain in the war. Once the war ended, however, Belize’s economy stagnated again, and in 1949 Britain decided to devalue the British Honduras dollar. With an independence movement now gaining steam and forming a major political party in the country, things would begin changing yet again. Britain granted Belize home rule in 1964, giving the people and local government more control over their own economic interests.

Manufacturing and agricultural products, in particular, gained in importance and cane sugar became Belize’s most prominent export. Other agricultural products the country began to produce in greater volume included citrus, seafood, and bananas. Others, like corn/maize, soy, rice, and papaya followed. The manufacturing of apparel was also expanded.

In 1973, fearing massive land speculation over the large amounts of Belize’s arable land not already under cultivation, the government put in place a law that required non-citizens to present a development plan for land over 10 acres that they hoped to purchase.

Belize finally gained full independence from the United Kingdom in 1981.

The Growth Of Tourism

Since achieving independence, the Belizean government has focused on growing the tourism sector as a way to boost the economy and provide livelihoods for the country’s people. This has been done in an effort to capitalize on Belize’s abundant natural resources, including its vibrant wildlife, tropical beaches, and unique marine environments. Other countries in the region, especially Costa Rica and Mexico, have seen great success marketing themselves as top destinations for both eco-tourism and as tropical getaways, so Belize saw no reason not to do the same.

The Present And The Future

Belize continues to have what is classified as a developing economy to this day. Agriculture remains the dominant industry in the country and employs over one-fifth of the population, although only a small amount of the land in Belize is actively cultivated. Sugar, citrus, and bananas remain the top agricultural exports.

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Tourism is the second largest segment of the country’s economy and it continues to expand. Most foreign investment in Belize is in the tourism industry but is also substantial in the agricultural, energy, and telecommunications sectors. The government actively promotes tourism growth as part of its long-term economic plan.

Challenges the Belizean economy faces going forward are a small domestic market, high cost of labor and energy, and low export prices of some of its primary export items. The country’s economy continues to be highly vulnerable to external market changes.

As a small country with limited natural resources, Belize has needed to get creative with what it has. Throughout the years its economic sector has been through many changes and faced a variety of challenges to get where it is today.