Monday, July 17, 2023
Because our school textbooks have been changed over the years, some younger readers might not be very familiar with the story of the goose that laid the golden egg; but our elders all know about that story, and should share it with the young ones, who are the ones that will inherit what the elders leave behind of this Jewel we call home, Belize.
We all want development, and we all need jobs. The massive exodus of Belizeans north following Hurricane Hattie had as much to do with harsh living conditions – poor housing and lack of utilities like running water, sewage disposal, etc. – as it did with a shortage of meaningful employment opportunities. So, yes; bring on the development and the jobs.
So, our government, always about the people, is looking wherever they can find an investor, someone or some company with access to big money, who can start some project or new industry that will provide jobs for Belizeans and foreign exchange to help meet the cost of the many imported items that we don’t make here in Belize. Foreign direct investment (FDI) is the buzz phrase, like the holy grail, for our politicians, blue and red; and they have some justification, because there is definitely benefit for the country when a rich foreigner brings in big amounts of US dollars and starts employing Belizeans, and also paying their bills of all sorts in the day-to-day operation of whatever venture they are into.
Take the shrimp farms, for example. When the new shrimp industry took off in the mid-1980s, it was driven by FDI, because the nature of the shrimp industry is that it demands large amounts of money to run it; it is a very capital-intensive industry, they say. That is because it takes an average of at least four months before harvest, during which there are labor costs to be met weekly, fuel and energy costs in pumping water, and most of all, feed costs, with the target of successful production from stocking to harvest being in the region of 2.5 lbs of feed to 1 lb of harvested shrimp. (And then there were the investment costs for land and pond construction to begin with.) Only a few Belizean businessmen were in that category where they could access the millions required to sustain a shrimp operation from stocking to harvest, when returns could be seen from the sale of the shrimp. Unfortunately, none of them wanted to take that risk, not when they were all in the safe “buy and sell” business of groceries, dry goods, hardware, etc. So, it took foreigners, mostly American millionaires, to take up investment in shrimp farms in Belize.
Before we go further, it must be noted, again with some justification for our local business class, that there was significant risk in the then lucrative shrimp business. Bad management or bad luck could result in a lot of water and very few shrimps at harvest time when the pond was drained and it was then discovered that the vast majority of shrimp had been lost, either through disease or broken screens, through which they could escape unnoticed, especially at night during water exchanges, or through pilfering by thieves at night with their cast nets.
Like with citrus, and bananas, over time and the proliferation of shrimp farms worldwide and in Belize, diseases eventually developed due to the abundance in enclosed spaces and stressful conditions resulting from huge numbers of a single species, whereas the densities of the animals in the wild are much less. Also, in natural environments, there are predators that cull the weak or sick individuals from a population of animals; it happens in the oceans with sharks that keep the mass of surviving fish in a healthy state. The weak and the sick are food for the predator. In the jungle, it is the same with tigers and lions and other predator species. In an enclosed, man-made environment with micro-screens to keep out any predator, extremely high densities of shrimp are kept in a pond; but from time to time, a new disease develops and spreads to the whole population, because the sick individuals are not quickly removed by the absent predators. So, the business is still lucrative in periods when there are no disease outbreaks; but it seems to be cyclical, and investors/farmers try to make the best of the good periods when diseases are not killing off their animals and leaving them with debts to pay when the return from harvest is way below the investment made.
Such are the ups and downs of the agriculture/aquaculture industry; there are inherent risks involved. And it takes courage, high technical and managerial skills, and perhaps most importantly, lots of cash to weather the storms of production setbacks that will come from time to time. In the gambling world, it is often said that the “dor” or the “house” never loses, because their cash flow is always replenished with their “cuts” from the other participants, who, when they go broke must drop out of the game, while the “dor” keeps playing until his luck comes good, as it surely will in time.
Unless there is strategic state input and protection built into the system, certain industries like shrimp farming will therefore remain a rich man’s venture.
And so it seems with this cruise port industry. As clearly visible to all with eyes to see, many millions have already been spent in construction by the investors in the Port Coral (Stake Bank) cruise project, but the earnings will not begin to compensate for the investment until the cruise port begins operation, and then we will see how profitable it can become, and for how long.
Coincidentally, in the Belize City environs, there are also two other proposed cruise port projects still being considered – Port of Belize Limited’s Waterloo (twice rejected by NEAC) and Port of Magical Belize’s Portico (which has reportedly received EIA clearance from the DOE). Government, after consultations with its technical team at the DOE, will consider the social and economical aspects long term and short term before giving final approval.
Of concern to the Stake Bank investors, naturally, is the potential negative economic impact on their operation if one or two other cruise ports begin operation in such close proximity. And the environmental community is equally concerned about the potentially intense traffic and contamination of the environment as a result of the massive dredging associated with all three projects. So far, the tone of government seems to be, as long as they can get past the environmental hurdle of the NEAC and the DOE, it is gung ho with the next cruise port. The more, the merrier; more jobs for Belizeans and more revenues for government to be able to provide the goods and services for our people!
One drawback to this open-armed approach, is that more might not be merrier after all. Already the litigation war has begun among the three proposed cruise port projects, with government in the middle, and standing to expend precious financial resources in mounting a legal defense against the deep-pocketed attacks of the Ashcroft Alliance.
As the battle of the cruise ports intensifies, and the litigation costs mount for our government, we are tempted to ponder the wisdom of government trying to embrace the idea of three big investors constructing cruise ports in this small area. Will they all get the cruise ship visits they need to be viable enterprises, or will the traffic lead to contentious problems where people are fighting for their share of the pie, and the one with the deepest pocket survives? Are we going for overkill with this cruise port business, like killing the goose?