Dr. Victor Bulmer-Thomas, an economist from London University who has written a number of books in that field, and co-authored the book, The Economic History of Belize From the 17th Century to Post-Independence, said in a presentation entitled “The Belizean Economy In The 21st Century: When and Why Belize Fell Behind and What to do About It”, at the University of Belize’s Policy Research Institute that, based on data on real earnings, Belize’s economy has stagnated since 2007. Recently, the IMF said some nice things about our economy, but our standard of living hasn’t improved; we have fallen behind many of our neighbors. That’s our reality since 2007, the economics expert from London University said.
But, while our economy has been lethargic since 2007, the professor observed that “imports per head have actually risen, and the share of imports in GDP has also risen”, which he said should not have happened in an economy that wasn’t performing. Professor Bulmer-Thomas said he had “no definite proof”, but his hunch was that what has happened in Belize is that there has been a “shift in income distribution … wealth inequality towards the richest people in the country.” And, the professor explained, richer households import more.
The professor might not have any studies at hand to support his hunch, but every day we see the stark reality in the streets. There is opulence—the Belize of mansions, SUVs, and vacations in Miami and Europe. And there is the Belize where thousands live in cramped spaces, hitchhike to their destinations, and can’t afford to take their families to visit any of the hundreds of stunning places between the Rio Hondo and the Sarstoon.
The rich own big stores and law firms, and control the illegal drug trade. The upper class are from double-income homes where both earners are in the income tax bracket. There is a rather large class with an assured paycheck which disappears as fast as they receive it to pay utility bills and buy food. The many poor live hand to mouth, their desperation sometimes exploding in acts of violence and other criminalities.
It cannot be passed over, Bulmer-Thomas referencing 2007 as a time when our economy was looking up in the region. The year 2007, and the years immediately preceding it, were extremely eventful in the economic life of Belize. In 1998, there was a change of government in a landslide election; and in the 10 years that followed, our public external debt about quadrupled, from $513 million to $1.9 billion. In that ten-year period, we sold off almost all of our public assets, including BTL, BEL, PBL, and BWSL, which had to be bought back because the buyers were dissatisfied with our rate structure. Additionally, we expanded our interests in offshore banking and increased the number of ships that flew our flag for convenience, and we made substantial investments in citrus and farmed shrimp production, and oil exploration.
But in 2007 Belize was having difficulty paying its debts, and had entered a period of austerity. In 2007, two of the country’s largest employers were about to close down.
In January 2007, the management of Belize’s largest shrimp farm, Nova Companies Belize Limited, with investments in the north, south, and Ladyville in the Belize District, was placed in the hands of a receiver, as operations were abruptly halted and over a thousand Belizeans lost their jobs in the highest-paying primary industry in the country.
In January 2008, Williamson Industries, the manufacturer of Dickies clothing, which had been operating in Belize for decades, closed its doors, leaving 700 Belizeans, many of them single mothers, jobless. The simple story behind Williamson leaving is that there had been agitation in the industry, charges that the salaries were too low, and there were countries that were ready to give the company a better deal.
Our economy has taken other licks since 2007. We had substantial revenues coming in from the petroleum industry, but our wells weren’t very productive beyond a decade. The US didn’t like the Petro Caribe program, a gift to the region from the Bolivarian Republic, Venezuela, under its leader Hugo Chavez, and it was closed down. Citrus began a downward slide around 2009 when the industry was hit by citrus greening. In 2008, Belize produced around 8,000,000 boxes of citrus fruits, after adding thousands of acres of groves. In 2024 Belize produced around 500,000 boxes of citrus fruits, 1/16th of what the industry produced in its heyday. Thousands of acres of groves, and the millions of dollars invested therein, have been abandoned. Around 2015, the rest of our farmed shrimp industry entered a state of collapse.
The IMF has praised our present economy, but the professor said that what we see is a recovery (post- pandemic), not real growth, and the projections for the future don’t look so promising. When asked for his comments on the professor’s observations, the lead author of Plan Belize, the Prime Minister, referred to the IMF’s glowing report, and said that under the UDP (2008-2020) the country had regressed, and it is a PUP government that has made us catch up to where we were in 2007, when we were under another PUP government.
Drawing from transcripts from 7News, Dr. Bulmer-Thomas said, “Belize has effectively been falling in relative terms … both within the Caribbean and within Central America [Belize’s economy] has deteriorated quite seriously.” Our “impressive performance since 2020, while very welcome, has only brought GDP per head of population in 2024 (after adjusting for inflation) back to where it was in 2007 … in the case of every single country in Central America, Belize’s position has deteriorated in terms of GDP per head at constant prices,” he further said.
While the PM boasts that foreign direct investment has been over $1 billion in 4 years, an unprecedented amount, the professor noted that the GDP per employed person is on a “downward trend”, which “suggests that’s something’s gone wrong with the investment process because you should really be getting more GDP per employed person if the investment process is working well.” The professor said Belize can “extract more revenue without doing serious damage to the economy”, without increasing taxes (which he considered high), if we cut back on the “many exceptions and exemptions and avoidance and evasion and in some cases … corruption.” He said that with increased revenue “government spending would be higher” and that that would lead to “an uplift in GDP per head if it was handled correctly.”
Professor Bulmer-Thomas said that to get over its sluggishness Belize needs to invest its resources in areas of the economy where it is more productive. To this end, he said our economics experts need to include the “input-output analysis” in their tool kit. This tool shows how the sectors of an economy impact each other, and the real contributions of the different sectors in respect to production and employment.
The UB team is to be congratulated for sponsoring and sharing this provocative discourse.
While there’s a lot to draw from Professor Bulmer-Thomas’s presentation, and we should be able to extract more when we access the script (today we are limited to the oral presentation and clips from 7News), it is important to note that the professor confined his observations to our present economic model, which is a copy of the US’s capitalist model, which “thrives” on income inequality.
The present government is in office on a promise that all of us will win. In respect to small countries, the US model is a proven vehicle for those that are floating on petroleum, or serve as shady tax havens. For the rest of small countries, the US model is a disaster for the majority. But, being fair to the government, we would have been doing better if the cruel inflation fallout from a world in turmoil hadn’t beset us.