1. NS4540 Winter Term 2018 Belize Overview

2. Overview I
The former colony of British Honduras gained independence in 1981 and is a parliamentary democracy.
Prime Minister Dean Barrow of the United Democratic Party (center left) was elected to his third and final consecutive five-year term in 2015.
He is in ill health and may step down early
The economy relies primarily on
tourism and exports of
marine products,
citrus,
sugar, and bananas.
The economy’s vulnerability to fluctuating agricultural commodity prices complicates policymaking.

3. Overview II
Heightened scrutiny of international financial intermediation in Belize has resulted in actions to tighten controls against
money-laundering and
the financing of terrorism
Foreign reserves could be under pressure in 2018 as the government draws on U.S. dollars to make payments to shareholders of Belize Telemedia
Payments are part of the settlement of a dispute arising from the firm’s 2009 nationalization.

4. Belize Governance Trends

5. Recent Macroeconomic Trends

6. Policy Dilemmas
Major economic problem currently unsustainable levels of public debt
Fiscal adjustments necessary, but in context of
Weak budgetary controls,
Pressing social needs,
Low growth and
overstretched government capacity in many areas.
Process has begun with
Higher tax revenue and
Sharp cuts in capital spending
Government rejected IMF’s recommendation to set a target for a primary fiscal surplus of 4-5% of GDP
Instead opted for 2% for next two fiscal years

7. Economic Freedom I
Belize’s economic freedom score is 57.1, making its economy the 116th freest in the 2018 Index.
Its overall score has decreased by 1.5 points, with declines in the scores for
fiscal health,
labor freedom,
government spending,
trade freedom, and
property rights
These overwhelmed an improvement in judicial effectiveness.
Belize is ranked 23rd among 32 countries in the Americas region, and its overall score is below the regional and world averages.

8. Overall Economic Freedom

9. Trade Freedom

10. Business Freedom

11. Economic Freedom II Economic reform in Belize
Has been uneven, and
More dynamic growth is constrained by lingering policy and institutional weaknesses in many parts of the economy.
Entrepreneurial activity remains limited
Recent growth has been narrowly based.
Private sector activity and diversification has been limited by
Burdensome tariff and nontariff barriers
The high cost of domestic financing and
The inefficient regulatory infrastructure .
The judicial system remains vulnerable to political interference,
Corruption is common.

12. Economic Freedom III
Bureaucratic delays can make it difficult to do business in Belize.
In general, employers are free to adjust their workforce in response to fluctuating market conditions.
Due to a recent influx into the labor market, the unemployment and underemployment rates have risen by 1 percent and 3 percent, respectively.
The government subsidizes electricity and maintains price controls on various products such as rice, sugar, and flour.

13. Economic Freedom IV
Unreliable land title certificates have led to numerous property disputes involving foreign investors and landowners.
The nominally independent judiciary is often influenced by the executive.
In 2016, Belize finally bowed to pressure from public, private-sector, and civil society groups and acceded to the U.N. Convention Against Corruption.

14. Economic Freedom V
Trade is extremely important to Belize’s economy; the combined value of exports and imports equals 125 percent of GDP. However trade restrictions
The average applied tariff rate is 10.0%.
Many nontariff barriers further impede trade.
Government openness to foreign investment is below average.
The revised Domestic Banking and Financial Institutions Act has significantly expanded the role of the central bank.
Credit allocation is influenced by the government.
Overall country needs reforms to strengthen economic freedom if the economy is to recover, and sustain rates of growth capable of improving budget and debt situation.

15. Refugee Problems I
In addition to increasing fiscal instability and unsustainable debt levels, the country is facing
A refugee crisis
High levels of gang-related violence
Tougher approach to migration in the U.S.
Has sparked a surge in refugees seeking to enter Belize from the Northern Triangle countries
However Belizean authorities are reluctant to receive more refugees
Concerns over the potential for increased gang activity in Belize

16. Refugee Problems II
Belize with a population of only 360,000 has long welcomed migrants from neighboring countries, particularly to work in its agricultural sector
In the past Belize has taken in many refugees
30,000 refugees during the Central American civil wars of the 1980s and 1990s.
However a cash-for-visas scandal in 2015 has seen work permits come under much closer scrutiny, making them more difficult to obtain
No applicant has been granted asylum since the former program of the 1980s and 1990s was reintroduced
Situation has led to the claims that the government is failing to meet its obligations under international refugee law.

17. Refugee Problems III
The government claims the UNHCR (UN High Commissioner for Refugees) is putting unfair pressure on Belize and that it does not have the resources to meet them.
Security concerns are a major factor contributing to the problem
The government wants to prevent Central American gangs from expanding their presence
However they contend they do not yet have the mechanisms in place to screen asylum seekers properly to ensure they are not gang members.
There is evidence that Central American gangs have increased their presence in Belize.

18. Refugee Problems IV
In addition Belize is coping with its own domestic gang problems
In recent years they have been involved in drug trafficking along the Atlantic coast
Has driven related violence.
With U.S. crackdown on undocumented migration
More refugees likely to be attracted to relatively stable Central American countries such as Belize and Costa Rica
Should increased deportations from U.S. to Central America and
Reduced US aid exacerbate criminal violence in the Northern Triangle --- numbers of refugees attempting to enter Belize may increase even further.