World Bank DocumentFOR OFFICIAL USE ONLY
Document of the World Bank
This document has a restricted distribution and may be used by
recipients only in the performance of their official duties. Its
contents may n otherwise be disclosed without World Bank
authorization.
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CURRENCY EQUIVALENTS
Currency Unit Belize dollar
Since its creation, the Belize dollar (formerly the British
Honduras dollar) was tied to sterling at the rate of £1-B7$4.00. In
May 1976, this link was broken and the Belize dollar was aligned
with the US dollar at the rate of US$1.00 - BZ$2.00.
Since May 1976:
GLOSSARY OF ABBREVIATIONS
ACP African, Caribbean and Pacific BSI Belize Sugar Industries BTL
Belizean Telecommunications Limited CARICOM Caribbean Community CBI
Caribbean Basin Initiative EEC European Economic Community GDP
Gross Domestic Product HHL Hershey Hummingbird Limited IBRD
International Bank for Reconstruction and Development IMF
International Monetary Fund MFA Multi-Fiber Agreement MUV
Manufacturing Unit Value PSIP Public Sector Investment Program UK
United Kingdom USA United States of America
FISCAL YEAR
April 1 - March 31
FOR OMCAL USE ONLY
This report is based on the work of a World Bank Economic Mission
to Belize in April-May 1989. The Mission comprised Mr. Alberto
Herrou- Aragon, Chief of Mission, Mr. Herman Von-Gersdorff
(Industry and Tourisvi), Mr. Macdonald Benjamin (Agriculture
Consultant), Mr. Nigel Baptiste (Caribbean Development Bank
Investment Specialist) and Ms. Barbara Ossowicka (Research
Assistant).
This document has a restricted distribution and may be used by
recipients- only in the performance of their official duties. Its
contents may not otherwise be disclosed without World Bank
authorization.
TITLE: : Belize - Economic Memorandum
SECTOR s Country Economic
PUBDATE
ABSTRACT : The Belizian economy has expanded sharply in recent
years, with real GDP growfth of 4.52 in 1988. This growth has been
led by exports, particularly citrus and bananas. The current
account of the balance of payments registered a deficit of only 2Z
of GDP. Public sector savings reached about 142 of GDP. The
monetary and fiscal authorities continue to stress fiscal
responsibility in the public enterprises and the Central Goverment.
Although the economy, particularly the export sector, is likely to
continue its rapid expansion through the early 1990s, a number of
challenges confront the authorities. In particular, demand
pressures on the labor market are having an adverse effect on
manufacturing and agriculture. Tke coming on stream of a single EEC
market by 1992 might have an adverse impact on the preferential
treatment for Bananas enjoyed by Belize. The absence of adequate
transport and '-her infrastruci-tre has constrained the production
potential of bananas in the country's southern districts. A well
focused Public Sector Investment Program of some BZ$326 million
(US$163 million) is projected for FY89/90-FY92(93. Transport,
agriculture and health represent 57Z of the program. The other
sectors account for the rest. Given the continuation of good
economic management, the relatively good prospects for exports, and
Belize's continued ability to attracc and utilize external
assistance successfully, the country will remain creditworthy for
modest amounts of medium- and long-term foreign borrowing, mainly
from official sources.
BELIZE
I. MACROECONOMIC DEVELOPMENTS . ..................................
1
A. Background .............................................. 1 B.
Recent Economic Developments ............................ 1 C.
Savings and Investment .................................. 2 D.
Public Sector Finances .................................. 4 E.
Money and Credit ........................................ 5 F.
Prices and Wages ........................................ 7 G.
Balance of Payments ..................................... 7
II. DEVELOPMENT ISSUES .........................................
8
A. Introduction ......................................... 8 B.
Agricultural Sector ......... ........................... 8 C.
Manufacturing Sector .................................... 15 D.
Tourism ........................................ 16
III. PUBLIC SECTOR INVESTMENT PROGRAM
.............................. 17
IV. ECONOMIC ISSUES AND PROSPECTS .................................
20
ANNEX I. GOVERNMENTS PROJECT LIST
STATISTICAL APPENDIX
AREA POPULATION DENSITY 22,000 KM2 179.8 (1966) 8.2 per km2
Rate of Growth: 2.3 (1970-63) 16.1 per k-2 of aurble land
POPULATION CHARACTERISTICS (19Z7) HEALTH (1937) Crude Birth Rate
(per 1,000) U.? Population per Physeilon 2,068.0 Crude D-eth Rate
(p.r 1,000) a.0 Population per Hospital SWd 300.6 Infant Mortality
(per 1,000 livo
births) 20.1
INCOME DISTRIBUTION DISTRIBUTION OF LAND OliERSHIP % of National
Income, Highest quintile % owned by top 10% of Owners
Lowest quinttl- X owned by Smallest 10X of Owners
ACCESS TO SAFE WATER (1980) ACCESS TO ELECTRICITY (1980) % of
Population - Urban 67.6 N of Population - Urbon 72.0
- Rural 29.6 - Rural 65.0
NUTRITION (1977) EDUCATION (1960) Caloric intake as % of
Requlrwente 126.0 Adult Literacy Rate X 92.0 Per capita Protein
intake 69.3 Primary School Enrol lent X p5.0
OW PER CAPITA IN 1908: Us51,460
GROSS NATIONAL FRODUCT IN 1987 OUTPUT IN 1967
Value Added USS Million X US# Million %
GNP of Market Prices 244.3 100.0 Cross Domestic Investment 60.9
24.9 Agr culture 47.6 22.0 Gross Domestic Savings 54.5 22.8
Industry and Mining 47.4 21.9 Current Account Balance 0.7 0.$
Servicee 121.7 56.2 Exports of Goods, NFS 14.1 560.6 Total 216.7
100.0 Imports of Goods, NFS 149.4 61.2
GOVERNMENT FINANCES Consolidated Public Sector Central
Government
BZe Million (X) of GOP BZ8 Million (%) of GDP 1966/87 197/668
1966/67 1967/86 1939/87 1987/66 1966/67 197/88
Current Revenue 139.4 164.6 83.0 82.7 111.7 184.2 26.4 26.6 Current
Expenditure 108.2 112.1 24.4 22.a 102.3 110.6 24.8 22.0 Current
Account Belince 88.2 62.7 8.6 10.6 8.9 28.4 2.1 4.6 Capital
Expenditure 42.4 41.0 10.0 6.1 88.6 26.6 8.0 5.7 External
Assistance (net) 19.6 27.5 4.7 5.6 14.9 9.7 8.5 1.9
not applicable not available
Page 2 of 2
COUNTRY DATA - OELIZE
MONEY. CREDIT AND PRICES 198113 1964 1oss 1916 197 1908 --------
BZS Million-Outstanding End Period--------
Monoy *nd Quesi Money 141.8 161.8 160.6 179.4 214.6 238.2 eank
Credit to The Centrol Covernment 63.1 79.7 90.4 94.6 62.7 28.6 Bonk
Credit to Privote Sector 124.1 136.6 127.0 126.6 166.2 212.5
----------- Percontdgo or Index Numbors----------- Money and quosi
Money as W of WDP 39.0 38.9 40.6 42.5 42.6 43.6 Annual percentage
changes in: General Price Index 2.6 6.3 -0.6 2.4 2.0 0.9 Bank
Credit to Public Sector 49.7 17.0 18.4 4.6 -12.6 -65.2 Bank Credit
to Private Sector 6.6 9.4 -6.5 -0.4 23.6 86.0
BALANCE OF PAYMENTS (USS Million) MERCHANDISE EXPORTS (AVERAGE
1964-86) */
1984 196 1936 1967 1968 use Million (O
Export of Goods, NFS 112.2 '04.4 122.? 148.1 167.9 Sugar and
Molasses 30.6 36.8 Import of Goods, NS 126.8 118.8 120.7 149.4
179.6 aonanas 5.4 6.9
Resources Gap (deficit a-) -14.6 -14.4 2.0 -6.8 -11.7 Citrus
Products 13.3 16.9 Fish Products 7.2 9.1
Factor Service (Not) -10.6 -11.8 -9.6 -7.5 -9.0 All Other
Comaodties 22.3 26.8 Not Transfors 12.5 19.0 11.4 14.5 16.0 Total
78.8 100.0 Current Account Balance -12.7 -6.7 8.6 0.7 -6.7
Public Capital 11.1 18.6 18.1 6.7 16.4 Gross Disbursements 4.1 17.0
8.1 7.7 14.7 Afortization -1.7 -7.6 -5.7 -6.5 -5.6 EXTERNAL DEST,
DECE*uR 31, 1966 Capital Cronts 8.7 9.4 9.7 6.6 7:6
US$ Million
Other Capital (0et) -6.9 -6.6 -6.1 0.8 8.0 Public Debt, Incl.
Guaranteed 116.1 Non-Guaranteed Private Debt ..
Change in Reserves 7.6 -8.8 -10.8 -9.0 -19.7 Total Outstanding A
Disbursed (-=Increase)
RATE OF EXCHANGE DEBT SERVICE RATIO FOR 1988 b/
Since May 1976 US91.00 a BZS2.00 Public Debt, Incl.Quaranteed 6.4
BZ21.00 = USSO.60 Non-Ouaranteed Privete Debt ..
Total Outstanding A Disbursed
IBRD/IDA LENDINO (DECEMBER 81, 1988 - MILLIONS USI)
IilR IDA Outstanding A Disbursed 7.2 0.0 Undi*buroed 19.0 0.0
Outstanding Incl. Undiebursed 26.2 0.0
*/ Ratio of debt servico to exports of goods and non-fact,
services, excluding re-exports.
b/ Includes financial capital, errors and omisslons, and changes In
orrears. c/ Excludes r.-exports.
not applicable not avallabl
SUMMARY AND CONCLUSIONS
i. The Bel4zean economy has been experiencing a period of rapid
structural change and vigorous growth thanks mainly to the
successful implementation of the Government's development strategy.
The major thrust of the strategy has 'jeen to promote export-led
growth by diversifying agricultural production and exports away
from the excessive dominance of sugar into producticn of bananas,
citrus, cocoa and fisheries, while simultaneously developing
manufacturing--mainly garments--and tourism. The creditable
performanice of the agricultural sector from the mid-eighties to
date, and the gradual emergence of manufacturing and tourism as
increasingly important activities, reflect the impact of both
government policies and of changes in the country's terms of
trade.
ii Economic performance during the early to mid-1980s was affected
by the sharp deterioration of the country's terms of trade and an
inadequate domestic policy response; economic growth averaged only
1.2X per year during that period. In 1985, economic growth slowed
down to 2Z as sugar prices and exports fell to their lowest level
in six years. The Government responded to the deteriorating
economic conditions by introducing tight demand management policies
designed to eliminate domestic and external imbalances. In 1986,
the economy recovered as real GDP rose by 5% reflecting the
expansion in construction and services. Substantial increases in
the production of bananas, oranges and grapefruit were achieved. In
1987, real GDP expanded by almost 14Z. This spectacular growth
reflected sharp increases in practically all economic activities
and was fueled by rapidly expanding exports of bananas, citrus
concentrates, garments and tourism. Preliminary estimates for 1988
indicate that real GDP growth slowed down to a more normal rate of
4.5% following a contraction in agriculture production and a
decline in the growth of manufacturing and of services.
iii. Belize has demonstrated a strong commitment to domestic
resource mobilization and to stepping up its investment effort to
sustain rapid growth. Gross national savings increased steadily
during 1986-88. In 1986, gross national savings represented about
21Z of GDP compared to 16% in 1985. Private savings increased from
about 122 of GDP in 1985 to 13.5% in 1986, despite a pronounced
reduction in private transfers from abroad. Public sector savings
increased from 5% of GDP in 1985 to about 8% in 1986. In 1987,
gross national savings reached 24.5% of GDP. Private and public
sector savings represented 15.5% and 9% of GDP, respectively. In
1988, gross national savings increased by about one percentage
point of GDP. However, private savings fell to 12.4% of GDP while
public sector savings increased to 13.4% of GDP.
iv. Although public finances have improved markedly, the Central
Government still faces problems recruiting skilled staff. At their
present levels, central government wages for skilled workers are
too low to compete with those of the non-financial public
enterprises and the private sector. As a further round of wage
increases wilL most likely decrease central government savings, the
Government should consider restraining other current expenditures
so as to ensure that sufficient savings remain to undertake the
level of needed investments in support of its development
strategy.
- ii -
v. After incurring deficits averaging 7.7% of GDP during 1984-85.
the resource balance registered a surplus of about 1Z of GDP in
1986. This turnaround reflected a decrease in private consumption.
However, in 1987 the resource balance deteriorated to a deficit
equivalent to about 3Z of GDP because of increases in gross private
investnient. Preliminary 1988 estimates indicate that the resource
gap has widened to about 4Z of GDP as a result of increases in
fixed investment equivalent to almost four percentage points of
GDP. The 1987-88 resource gaps essentially differ from those of
1984-85. The 1984-85 deficits resulted from fiscal deficits which
were financed by capital inflows. On the other hand, the 1987-88
resource gaps were incurred with a surplus in the public sector's
operations. In those two years, the country's resource gaps were
caused by increases in private investment expenditure which
reflected buoyant private activity and highly favorable
expectations on the economy's long-term prospects.
vi. The primary economic masiagement and development challenge for
the Government of Belize is to both maintain, over the short term,
prudent macroeconomic management and, over the medium-term, the
momentum achieved in economic growth and diversification of the
economy. The public sector's role in this effort centers on two
broad policy fronts. First, to continue to improve public
investment performance with regard to the economic and social
Jnfrastructure, particularly eliminating critical bottlenecks, and
to ensure that the overall incentive structure is conducive to
efficient resource allocation. The latter requires that demand
pressures on the labor market be alleviated by loosening
restrictions on immigrant labor work permits. Second,
diversification of agriculture should continue to minimize any
adverse effects on banana production and exports which could emerge
by the coming on stteam of the single EEC market by 1992.
vii. With regard to markets and market prospects, while favorable
factors dominate Belize's relationships with its main trading
partners, some uncertainties currently exist on the future status
of some of its agricultural exports. First, Belize enjoys
privileged access in three distinct markets. It is a beneficiary
under the Caribbean Basin -nitiative in the United States market.
This has provided a powerful stimulus to growth of the citrus
industry in particular. Belize enjoys, through its membership in
the ACP countries (Africa, Caribbean and Pacific), a preferential
position in EEC markets under the Lome Convention. This provides
strong support for both the sugar and banana industries. With
regard to market prospects for specific commodities, there are two
major areas of concern. The first relates to the possible adverse
impact on the sugar industry if Belize's quota in the US market
were to be phased out. The second relates to the formation of a
single EEC market by 1992 and its possible adverse impact on the
preferential treatment now enjoyed by ACP banana producers
vis-a-vis bananas from non-ACP countries. Lastly, the small size of
the domestic market suggests high costs for required support
services and distribution affecting competitiveness within the
CARICOM market. This also poses a problem for infrastructure
development, especially roads required for perishable products such
as bananas. Over the medium-term, however, the agricultural sector
could face an increasing wage bill as both labor costs and the
strong dependence on imported labor rise.
- iii -
viii. Growth prospects for the tourism sector are provmising,
particularly because of the potential to develop archaeological
sites in addition to the rapidlv expanding sun and beach tourism.
However, the rate of expansion of the sector will depend on the
speed with which additions to the existing stock of hotel rooms is
increased to meet the rapidly risin- demand. However, in San
Pedro--the most important tourist destination-- possible expansions
in tourist facilities are constrained by inadequate
infrastructure.
ix. A critical issue in manufacturing is the high cost of
electricity. The larger manufacturing companies, however, have been
generating their own supply to reduce costs and improve
reliability. Although electricity tariffs for loan consumption
levels were reduced in 1988, the new rates provide monthly savings
of only US$5.9 for the industrial consumers. Over the medium-term,
electricity tariffs for industrial users (US$0.205 per kwh) could
be reduced in the area interconnected with Mexico once the
interconnection is completed.
x. At approximately BZ$69 million, public sector investment in
FY88/89 was similar to the planned level of BZ$67 million. This
improvement reflects a strengthening in project implementation.
However, there are a nuaber of areas where Government attention is
needed to sustain adequate levels of public investment over the
next four years. These relate to the staffing of planning
departments, classification between capital and recurrent
expenditures, finalization of project design. development of a
project pipeline for external financing and coordination between
the respective mintitries and the donor agencies. For the period
FY89190 to FY92/93 the public sector investment program (PSIP) has
been projected, in accordance with the country's macroeconomic
requirements for growth, at some BZ$326 million (US$163 million).
However, the country's core PSIP would total BZ$188 million, of
which about 87X is scheduled for ongoing projects. Agriculture,
manufacturing, mining and tourism, comprise 29% of the projected
PSIP, with agriculture indi-idually accounting for 24Z. Projects
designed to improve the country's infrastructure and to eliminate
constraints to diversification, i.e. transportation, water and
power facilities, correspond to 41% of the PSIP. Projects for the
social services sector, which would help to provide the tasic needs
of the population, i.e., health, housing and education, account for
24Z, while public administration and uther projects comprise the
remaining 6z.
xi. External financing requirements for the PSIP will be determined
by the level of domestic resource mobilization. The requirement for
public sector investment is estimated to be US$163 million.
Scheduled amortization requirements amount to US$32 million for the
four year petiod. Public sector savings and capital revenue are
projected to provide approximately US$159 million. Scheduled
disbursements under external conmitments for ongoing projects would
provide US$54 million. A financing gap for the four years of US$58
million would remain, of which US$48 million represents financing
for new projects for which the Government is seeking donor
assistance.
xii. The economy is projected to grow by about 4% on average in
real terms during 1989-93 as a result of the projected expansion in
tourism and agriculture. Beyond 1993, growth is expected to
slowdown to about 3Z per year because of lower projected growth of
both sectors. Although both the
- iv -
resource and current account balances are projected to be in
deficit during the projection period, capital inflows are envisaged
to be enough to cover the external financing gap and provide a
surplus in the overall balance of payments during most of the
period. This, in turn, will meet the increase in the demand for
cash balances as the economy expands. The debt ;ervice to exports
ratio is projected to decrease from 6.4Z in 1988 to 5.9Z by 1998,
while the ratio of external debt to GDP is projected to decrease
from about 422 in 1988 to 332 by 1998. As Belize continues to
borrow only for high-quality infrastructure investments and avoids
excessive credit creation, the country will remain creditworthy for
modest amounts of medium and long-term borrowing, particularly from
official sources.
I. MACROECONOMIC DEVELOPMENTS
A. BACKGROUND
1. Belize, which encompasses 23,000 sq. kilometers, is located
south of Mexico's Yucatan Peninsula on the Caribbean coast of
Central America. With a population of about 180,000 in 1988, it is
one of the least densely populated countries in the world, i.e.
eight persons per square kilometer. At the time of the 1980 census,
about one-fourth of the population lived in Belize City, the
country's largest city, and in its suburbs. Belize's population is
predominantly young (about 502 below the age of fifteen) and quite
literate (the primazy school enrollment and adult literacy rates
slightly over 90). The country is endowed with abundant and fertile
land, literate urban labor, proximity to NortU' America and a
stable currency (i.e. its exchange rate has been pegged to the US
dollar at a fixed rate since 1976), all of which make it attractive
to foreign investment.
2. The country has a small, open economy primarily based on export
agriculture but also on tourism and export manufacturing. The
economy's openness naturally results in a high ratio of imports to
GDP and in vulnerability to price changes in its principal exports.
Agriculture is an important sector of the economy, accounting for
almost a fifth of GDP in 1987. About two-fifths of agricultural
value added and over one-third of commodity exports are derived
from sugar. The rest of agriculture comprises citrus and banana
production and fishing for exports, and the production of corn,
rice, beans and livestock for lomestic consumption. Industry
(including construction and electricity) accounts for about a
quarter of GDP. The major rubrics are export oriented: sugar
refining, citrus processing and garments. The service sector,
principally commerce and public administration, accounts for over
half of ,DP.
3. In one regard, Belize's economy is more open than other small
economies in the region. It is dependent on immigrant agricultural
labor, whose relative high wage rates are needed to attract labor
from neighboring countries. In addition, wages for Belizean skilled
labor are a reflection of US labor market opportunities. High-cost
labor by world-wide developing country standards also causes Belize
to be a high cost producer. Its production base is therefore
dependent on trade preferences and high productivity.
B. RECENT ECONOMIC DEVELOPHENTS
4. Economic performance during 1980-85 was affected by thte sharp
deterioration of the country's terms of trade and an inadequate
domestic policy response. Economic growth averaged only 1.2Z per
year during that ,eriod. In 1984 real GDP growth expanded by 4.4Z
in the wake of a temporary recovery of sugar prices and increases
in public expenditure. However, that rate of growth was not
sustainable since it was achieved by means of expansionary demand
management policies that resulted in non- sustainable domestic and
externai imbalances. In 1985, economic growth slowed down to 2Z as
sugar prices and exports fell to their lowest level in six years.
The Government responded to the deteriorating economic conditions
by introducing tight demand management policies in 1984 designed to
eliminate domestic and external imbalances.
- 2 -
5. In 1986, the economy recovered. Real GDP rose by 52 as a result
of the expansion in construction (7.7Z) and services (4.92).
Agricultural output fell by only 12 despite an 112 fall in
sugarcane production following a drop in prices, as substantial
increases in the production of bananas, oranges and grapefruit were
achieved. The increase in banana output was promoted by the
privati;ation of the industry in 1985 which enabled farmers to
respond adequately to the higher prices in the preferential UK
market. The increase in citrus production, in turn, stemmed from
the opening up of the U.S. market through the Caribbean Basin
Initiative (CBI). Manufacturing output increased by only 2Z because
of a decrease in the production of refined sugar following the drop
in sugarcane production.
6. In 1987, real GDP expanded by almost 14Z. This spectacular
growth reflected sharp increases in practically all economic
activities. The upturn in construction originated from commercial
as well as residential const.uction. In agriculture, sugarcane
production continued to decrease, but it was more than compensated
for by the expansion in the production of bananas, oranges,
grapefruit, corn and poultry. Increases in the catch of fin fish
and conch raised output in the fisheries subsector. The growth of
manufacturing production was propelled by increases in the
production of citrus concentrates, cigarettes, flour, batteries and
fertilizer. The fertilizer industry responded, in turn, to the
increased demand generated by rising banana and citrus
production.
7. Preliminary estimetes for 1988 indicate that real GDP growth
slowed down to a more normal rate of 4.52 following a contraction
in agriculture production and a decline in the growth of
manufacturing and of services. Agriculture was affected by adverse
weather conditions which reduced the production of citrus and, in
turn, of citrus concentrates. On the other hand, production of
garments increased by almost 402 as a result of new investments
coming into fruition.
C. SAVINGS AND INVESTMENT
8. Belize has demonstrated a strong commitment to domestic resource
mobilization and to stepping up its investment effort to sustain
rapid growth. Gross national savings increased steadily during
1986-88. In 1986, gross national savings represented about 212 of
GDP compared to 162 in 1985 (see Table 1 below). Private savings
increased from about 12% of GDP in 1985 to 13.52 in 1986, despite a
pronounced reduction in private transfers from abroad. Public
sector savings increased from 52 of GDP in 1985 to about 82 in
1986. In 1987, gross national savings reached 24.52 of GDP. Private
and public sector savings represented 15.5Z and 92 of GDP,
respectively. In 1988. gross national savings increased by about
one percentage point of GDP. However, private savings fell to 12.42
of GDP while public sector savings increased to 13.42 of GDP.
9. Fixed capital formation increased substantially during 1987-88.
In 1987, fixed capital formation represented 232 of GDP compared to
an average of 182 during 1985-86 in reflection of increases in
investments in machinery and equipment as well as construction and
land development originating from the expansion in private sector
investment activity.
- 3 -
Growth Rates
Gross Domestic Product a/ 4.4 2.2 5.0 13.6 4.5 Primarv Sectorb/ ci
2.3 -1.3 -4.3 16.1 -3.9 Secondary Sector -T d/ -0.7 0.2 4.0 14.4
5.9 Tertiary Sector b - 4.4 4.8 4.9 10.1 3.8
Consumer Price Index 5.8 -0.6 2.4 2.0 0.9 (end of period)
Ratios to GDPe/
Foreign Savings 6.4 3.4 -1.8 -0.3 2.0 Gross Domestic Investment
23.5 19.8 19.4 24.2 26.4 Fixed Capital Formation 20.7 17.7 18.5
23.0 25.3 Private Sector 11.6 8.4 8.8 13.8 13.7 Public Sector 9.2
9.3 9.7 9.2 11.6
Changes in Stocks 2.8 2.0 0.9 1.2 1.1 Gross National Savings 17.1
16.4 21.2 24.5 24.4
Private Sector 16.0 11.6 13.5 15.5 11.7 Public Sector 1.1 4.8 7.7
8.9 12.7
Investment-Savings 6.4 3.4 -1.8 -0.3 2.0
Memorandum Item Share of Gross Domestic 27.2 17.2 -9.3 -1.2
7.2
Investment Financed by Foreign Savings
a/ In real terms at market prices. UT In real terms at factor cost.
ET Includes agriculture, forestry, fishing and mining. 3T Includes
manufacturing, electricity and water, and construction. eT Current
prices.
Source: Statistical Appendix Tables 2.2, 2.3, 3.1 and 8.1.
Private investment almost doubled, from an average of 8.5Z of GDP
during 1985-86 to about 14? in 1987. Public sector investment
remained almost constant throughout 1985-87. In 1988, fixed capital
formaticn reached 25Z of GDP, as public sector investment climbed
more than two percentage points of GDP over its 1987 level.
- 4 -
D. PUBLIC SECTOR FINANCES
10. After incurring a deficit of 1Z of GDP in FY86/87 (excluding
grants), the consolidated non-financial public sector was in
surplus by 3Z of GDP in FY87/88 (see Table 2 below). This
turnaround was achieved through an improvement in the finances of
the central government. which turned from a deficit of 4Z of GDP in
wY86/87 into a surplus equivalent to 1.22 of GDP in FY87/88.
Current expenditures were cut and tax revenue increased by an
equivalent of 22 and 12 of GDP, respectively--the reduction in
current expenditures was achieved notwithstanding wage increases
granted to permanent workers. This remarkable management of central
government finances contributed to an increase in public sector
savings equivalent to 10.52 of GDP in FY87/88.
Table 2: PUBLIC SECTOR FINANCES, FY19P4/85-FY1988/89
(Z of GDP)
1984/85 1985t86 1986/87 1987/88 -988/89
Public Savings 2.3 4.7 8.5 10.5 13.6 Central Government -0.5 0.1
2.1 4.7 5.7 Public Enterprises 0.6 2.4 4.3 4.0 6.1 Social Security
Board 2.2 2.2 2.1 1.8 1.8
Capital Revenue 0.4 0.0 0.4 0.8 6.2
Capital Expenditure 9.0 9.7 10.0 8.1 12.7 Central Government 6.9
7.2 6.5 4.2 5.6 Public Enterprises 2.0 2.5 3.5 3.9 6.9 Social
Security Board 0.1 0.0 0.0 0.0 0.2
Overall Surplus Deficit -6.3 -5.0 -1.1 3.2 8.3 Changes in arrears
-0.1 1.1 0.0 0.0 0.0
Financing 6.4 3.9 1.1 -3.2 -8.3 External (net) a/ 5.4 6.1 5.4 6.2
n.a. Domestic (net) 1.0 -2.2 -4.3 -9.4 n.a.
a/ Includes grants. n.a. Not available.
Source: Statistical Appendix, Table 5.3.
11. Preliminary FY88/89 estimates indicate that the public sector
achieved an overall surplus equivalent to 82 of GDP in FY88/89 as a
result of the sale of the Government's shares in the country's
telecommunications company, and an increase of public sector
savings to 142 of GDP stemming from further improvements in the
savings performance of the Central Government and the non-financial
public enterprises.
-5-
12. Although public finances have improved markedly, the Central
Government still faces problems recruiting skilled staff. At their
present levels, central government wages are too low to compete
with the non- financial public enterprises and the private sector.
As a further round of wage increases will most likely decrease
central government savings, the Government should consider
restraining other current expenditures so as to ensure that
sufficient savings remain to undertake the level of needed
investments in support of its development strategy.
13. In FY89/90, an income tax reform is to be implemented. The
reform follows the IMF recommendations on reducing the number of
tax brackets from twelve to four. The tax threshold and personal
allowances are to be increased f,om BZ$5,000 to BZS7,000 and from
BZ$1,400 to BZ$3,000, respectively. Dependency exemptions also are
to be increased. This reform, designed to benefit low income
groups, is estimated to reduce revenues by about 0.72 of GDP.
E. MONEY AND CPEDIT
14. Since Belize's currency is linked to the US dollar, the
quantity of money is demand determined and this constrains the
policy instruments availeble to the Government. In particular,
domestic credit policy has no effect on changes in the money supply
but only on its composition as between domestic and net foreign
assets.
15. Domestic credit expanded at an average annual rate of 152
during 1981-84, fueled by increasing fiscal deficits, and was the
main czuse of a systematic fall in net international reserves (frcm
US$1.1 million in 1981 to a negative US$13.6 million at the end of
1984). In December 1984, the country entered into a Stand-by
Arrangement with the IMF. As part of the agreement, the Government
introduced a tight credit policy implemented through increases in
reserve requirements and interest rates. At the end of 1986,
domestic credit had fallen by 92 compared to 1984 while net
international reserves increased to US$8.8 million. The increase in
net international reserves was equivalent to almost 202 of the
quantity of money broadly defined originating from the decreases in
domestic credit and expansion in economic activity (see Table 3
below).1
16. In 1987 credit became loose as domestic credit was expanded by
an amount equivalent to about 10% of the quantity of money.
Nevertheless, net international reserves continued to increase,
fueled by the increased demand for real cash balances originating
from the rapidly expanding economic activity. The increase in
international reserves represented 112 of the quantity of money,
which in turn, increased by 202 during 1987.
1/ An increase in real GDP increases ths public's demand for real
cash balances. In the absence of an increase in domestic credit,
the increase in the demand for real cash balances generates a
corresponding increase in net international reserves. Conversely, a
decrease in domestic credit would result in an increase in net
international reserves.
-6-
(in rercent)
1984 1985 1986 1987 1988
Net Domestic Credit a/ 13.5 -2.7 -7.7 10.0 -2.1 Credit to the
Public Sector a/ 5.7 -1.6 -4.9 -8.1 -26.3
Central Government 8.2 7.0 2.6 -6.6 -25.1 Rest of Public Sector
-2.5 -8.6 -7.5 -1.5 -1.2
Credit to the Private Sector a/ 8.3 -5.8 -0.3 16.6 26.2 Net
International Reserves b/ 0.6 8.8 19.6 11.1 16.0 Money 18.8 0.0
10.7 22.5 16.4 Money Plus Quasi-Money 7.1 5.7 11.8 19.6 11.0
a/ Changes in the stock of domestic assets as a percentage of the
stock of money and quasi-money at the beginning of the
period.
b/ Changes in the stock of net international reserves as a
percentage of the stock of money and quasi-money at the beginning
of the period.
Source: Statistical Appendix Table 6.1.
17. In 1988, the stock of net dimestic assets of the banking system
remained virtually constant because credit to the public sector was
reduced by 26% of the quantity of money and was offset by an
equivalent increase in credit to the private sector. The decrease
in public sector credit originated from a rise in central
government deposits in the Central Bank, particularly ftids
corresponding to the sale of its shares in the Belizean
Telecommunications Limited (BTL). In turn, a 26% increase in credit
to the private sector originated both from increases in deposits of
non-financial public enterprises in commercial banks, and in the
demand for interest bearing deposits by moneyholders as well as
from increased loan demand. As a result, lending interest rates
decreased from an annual average of 14.72 in 1986 to 14% in 1987
and 13.6Z in 1988. Time deposit rates (as well as other interest
bearing deposit rates) also fell from an annual average of 11.92 in
1986 to 9.62 in 1987 and 8.4% in 1988. These developments increased
the spread between average lending and deposit ratas to 7.2
percentage points in 1988 from 5.8 percentage points in 186. Since
total net domestic credit did not change, the increased demand for
money generated an increase in net international reserves.
F. PRICES AND WAGES
18. As Belize's exchange rate is pegged to the US dollar, its
inflation tends to reflect that of its major trade partners,
particularly the U.S.. Between 1980 and 1983, prices increased by
about 252 in Belize, while in the U.S. they increased by 212. After
1983, the decline in US inflation contributed to bring down
inflation in Belize. Between 1983 and 1988, domestic prices in
Belize increased at an annual average of 2.22 while those in the US
rose at an annual average of 3.42.
19. Belize does not report data on labor market conditions.
However, there is evidence of shortages of labor in the country,
particularly in construction and manufacturing activities. These
shortages are one of the major constraints limiting Belize's
development prospects.
G. BALANCE OF PAYMENTS
20. After incurring deficits averaging 7.72 of GDP during 1984-85,
the resource balance registered a surplus of about 12 of GDP in
1986. The value of exports increased by about 182 and that of
imports by about 22 compared to their 1985 levels. This turnaround
reflected a decrease in private consumption. However, in 1987 the
resource balance deteriorated to a deficit equivalent to about 32
of GDP. While total exports increased by almost 172, total imports
increased about 242 because of increases in private investment.
Preliminary 1988 estimates indicate that the resource gap has
widened to about 42 of GDP as a result of increases in fixed
investment equivalent to almost four percentage points of
GDP.
21. The 1987-88 resource gaps are essentially different from those
of 1984-85. The 1984-85 deficits resulted from fiscal deficits
which were financed by capital inflows. On the other hand, the
1987-88 resource gaps were incurred with a surplus in the public
sector's fiscal operations. In those two years, the country's
resource gaps were caused by increases in private investment
expenditure which reflected buoyant private activity and highly
favorable expectations on the economy's long-term prospects.
22. Both export and imports expanded vigorously following the
implementation of the country'a adjustment program. Exports of
goods increased by 482 in value from 1985 to 1988 mostly because of
rising exports of citrus concentrates, bananas and garments. During
most of the 1985-88 period, sugar exports remained near their 1984
levels after recovering from the drop in prices in 1985. The volume
of exports of banana increased 130Z during 1985-88. In value terms,
banana exports increased 1772 during the same period. Exports of
citrus concentrates increased by almost 72Z in volume and 632 in
value between 1985 and 1987. Exports of garments increased by
almost 902 in volume and 312 in value between 1985 and 1988. The
value of imports increased at about the same pace as exports from
1985 to 1988, primarily because of the import cf investment
goods.
II. DEVELOPMENT ISSUES
A. INTRODUCTION
23. The Belizean economy has been experiencing a period of rapid
structural change and vigorous growth thanks mainly to the
successful implementation of the Government's development strategy.
The major thrust of the strategy has been to promote export-led
growth by diversifying agricultural production and exports away
from the excessive dominance of sugar into production of bananas,
citrus, cocoa and fisheries, while simultaneously developing
manufacturing--mainly garments--and tourism. The creditable
performance of the agricultural sector from the mid-eighties to
date, and the gradual emergence of manufacturing and tourism as
increasingly important activities, reflect the impact of both
government policies and of changes in the country's terms of
trade.
24. Despite the recent successful performance of the economy,
Belize's longer-term growth prospects will be constrained unless
the following key issues are addressed: (i) demand pressures on the
labor market are having an adverse effect on manufacturing because
of the increased demand for labor by construction and tourism
activities; and (ii) the coming on stream of a single EEC market by
1992 might have an adverse impact on the preferential treatment
enjoyed by Belize.
(i) Labor Demand Pressures. As a result of increases in
construction and tourisn activities during 1987-88, there have been
demand pressures on the labor market. These pressures have resulted
in increasing real wages, affecting the competitiveness of
manufacturing exports, particularly to the US market. This could be
alleviated by loosening restrictions on immigrant labor. However,
the Government has increased the work permit fees for workers in
manufacturing from US$2.5 to US$250. Moreover, hiring costs are
being further escalated since the permits are not transferable and
many firms absorb their cost. These new regulations are also
affecting agriculture.
(ii) EEC Trade Preferences. The largest single issue facing the
banana industry is how the creation of a single EEC market will
impact on the preferential market arrangements now enjoyed by
Belize under the Lome Convention. Presently, Belize exports all its
bananas to the protected U.K. market. Bananas from ACP countries
(Africa, Caribbean and Pacific) enter the UK free of duty and
license restrictions in contrast to bananas from non-ACP countries,
which requ're licenses issued after ACP bananas are absorbed. The
banana protocol under the current Lome Convention expires in 1992.
The ACP countries fear that the free circulation of bananas from
non-ACP countries within the EEC market would threaten their
industries, since they would not be in a position to compete either
in terms of price or quality.
B. AGRICULTURAL SECTOR
25. The Government's 1985-89 Macroeconomic Plan targeted identified
specific commodities for development, i.e., bananas, citrus, cocoa
and shrimp. To this end, the Government undertook the following
measures: it privatized the banana industry and activelv pursued
external funding to
- 9 -
finance the expansion of the above commodities. These actions,
complemented by private sector initiatives, have begun to bear the
desired results.
26. The plan set targets of growth for total exports during 1985-89
between 10.82 and 16.62 per year. All the agricultural export
commodities except cocoa had exceeded the minimum rates targeted by
the plan's third year. Bananas in particular showed strong growth.
Shrimp mariculture suffered from problems of a technical,
managerial and financial nature, while overfishing has been a
problem. The domestic food crops sub-sector has shown blixed
performance. While maize and red kidney beans showed increases of
92 and 14? respectively on an annual basis, rice production
declined by 9Z per year, although in 1988, production registered a
strong recovery. Whereas production of poultry has been very
buoyant, the beef industry suffers from overextraction, which will
necessitate imports of breeding stock. The 1988 beef output of two
million pounds was the lowest in the past eight years. Pork
production, however, shows continued growth. Feed supply at
competitive prices poses a constraint to growth not only for pork
but also for dairy products production. Despite this, in 1988 milk
production increased almost 20? above its 1987 level and more than
doubled production in 1984 and 1985. Until recently, the forestry
subsector had stagnated but recent investments have provided a
boost to prc uction and exports: the operation of one large modern
sawmill contributed to a growth of erports from 1.6 million to 4.9
million board feet between 1986 and 1987. Two veneer mills under
construction should soon begin operating. In 1988, exports of
forestry products exceeded US$2.7 million.
27. With regard to markets and market prospects, while favorable
factors dominate Belize's relationships with its main trading
partners, some uncertainties currently exist on the future status
of some of its agricultural exports. First, Belize enjoys
privileged access in three distinct markets. It is a beneficiary
under the Caribbean Basin Initiative (CBI) in the United States
market. This has provided a powerful stimulus to growth of the
citrus industry in particular. Belize enjoys, through its
membership in the ACP countries, a preferential position in EEC
market, under the Lome Convention. This provides strong support for
both the sugar and banana industries.
28. With regard to market prospects for specific commodities, there
are two major areas of concern. The first relates to the possible
adverse impact on the sugar industry if Belize's quota in the Uc
.narket were to be phased out. The second relates to the formation
of a .ngle EEC market by 1992 and its possible adverse impact on
the preferential treatment now enjoyed by ACP banana producers
vis-a-vis bananas from non-ACP sources.
29. Lastly, as a member of CARICOM, the small size of the domestic
market suggests high costs for required support services and
distribution. This also poses a problem for infrastructure
development, especially roads required for products such as
bananas. Over the medium-term, however, the agricultural sector
could face an increasing wage bill as both labor costs and the
strong dependence on imported labor rise.
- 10 -
Sugar
30. The sugar industry experienced strong declines in output during
the 19808. While it remains thp country's most important foreign
exchange earner, its predominant role in the economy has diminished
considerably. In 1988 sugarcane production fell to 0.8 million
tons, contrasting sharply with the average production of 1.0
million tons for the period 1980-85. However, productivity
increased. Declines in acreage also occurred, from an average of
60,000 acres in 1980-1982 to 56,000 acres in 1988. These trends
reflect two basic factors: the declines in world market prices and
the severe cutbacks in the quoca for Belize in the US market. It
appears that this declining trend has been temporarily detained,
though production is not expected to reach the levels of the early
1980s. These trends also had an effect on the implicit subsidy
received by Belize's sugar exports from the US and EEC markets. The
subsidy dropped from about 9% of GDP per year on average during
1982-84 to about 7Z during 1985-88 (see Table 4 below). Changes in
prices and import quotas, together with the depreciation of the
U.S. dollar against the major European currencies, affected the
level of the subsidy. In the U.S. market, for example, the subsidy
dropped from about 42 of GDP per year on average during 1982-84 to
about 1Z of GDP during 1985-88. On the other hand, in the EEC
market, the subsidy increased from about 42 of GDP per year on
average during 1982-84 to about 62 of GDP during 1985-88.
Table 4: IMPLICIT SUBSIDY TO BELIZE'S SUGAR EXPORTS FROM
PREFERENTIAL MARKETS, 1982-88
(Z of GDP)
US EEC Total
1982 4.2 4.9 9.1 1983 4.2 4.3 8.5 1984 4.4 3.7 8.1 1985 2.2 4.5 6.7
1986 .9 5.2 6.1 1987 .9 6.6 7.5 1988 1.4 6.1 7.5
Source: Bank staff estimates; Statistical Appendix, Table
7.4.
31. The value of exports of sugar and molasses reached US$35.5
million in 1988, as compared to a yearly average of US$ 31 million
for 1986-87. In 1988 the ratio of sugar came to sugar produced was
about 9.5. The current yields of sugarcane to sugar have gone down
and the output ratio is currently estimated at 8.65. Nevertheless,
this year's sugarcane production is likely to increase reflecting
an active program by The Belize Sugar Industries. Ltd. (BSI)
whereby farmers have been given financial and organizational
support to enable them to carry out substantial replanting and
rehabilitation work.
- 11 -
32. A major restructuring of the industry in 1986 contributed to
its improved performance when BSI closed the inefficient Libertad
Sugar Mill in Corozal and undertook efficiency reforms at the
modern Tower Hill Factory in Orange Walk. The purchase of the
Libertad Factory by Petrojam Ltd, the Jamaica State Oil Company,
has injected a new dimension into the industry. The sugarcane
requirements of about 300,000 tons annually for the manufacture of
wet alcohol for shipment to Jamaica for production of ethanol to be
marketed in the US, will provide a powerful boost to the industry.
The goal continues to be that Petrojam would grow about 170,000
tons of sugarcane to meet its own requirements with the remainder
being purchased from sugarcane growers. However, it is highly
uncertain about whether the supply requirements will be
forthcomlng.
33. The unification ot the EEC market by i992 will lot prejudice
the operation of the Sugar Protocol, which is expected to continue
indefinitely. Efforts to reduce prices paid to European best sugar
growers will, however, impact adversely on the prices that
sugarcane growers receive. There are concerns, however, on the
possible phasing-out of the US quota unless preferential treatment
is granted to CBI countries. In light of the above developments,
the prospects for strong growth of the industry remain rather
weak.
Bananas
34. The industry has experienced strong growth since 1985, when
exports of 555.000 boxes with a value of about US$3 million were
realized. The corresponding 1988 figures were 1.394,000 boxes and
US$8 million. The planted acreage more than doubled in the same
period. Two major factors accounted for this growth performance:
(i) the Banana Control Board was divested of its commercial
holdings which were taken over by private enterprise, which
invested heavily in the expansion of the planted area including the
development of irrigation; and (ii) higher prices resulting from
renegotiation of the pricing formula between the Board and its sole
UK purchaser. As a consequence of both factors, the implicit
subsidy to Belizean banana exports in the preferential U.K. market
increased from 0.42 of GDP in 1984 to 1.22 of GDP in 1987 (see
Table 5 below).
Table 5: IMPLICIT SUBSIDY TO BELIZE'S BANANA EXPORTS FROM THE U.K.
MARKETS, 1983-87
(2 of GDP)
1983 0.3 (26.9) a/ 1984 0.4 (37.0) a/ 1985 0.7 (65.6) a/ 1986 0.6
(40.5) a/ 1987 1.2 (69.5) a/
a/ Price differentials between Belizean export unit values and
banana export prices in developing countries, in percent.
Source: Bank staff estimates; Price Prospects for Major Primary
Commodities, The World Bank, Vol. II, 1988.
- 12 -
35. After a chequered history, it appears that the industry is
poised for a more even growth pattern. Yield in boxes have risen by
almost 70Z since 1985. In terms of productivity, however, Belize
with an average yield of 10.7 tons per acre, still ranks far behind
Honduras' yield of 17.7 tons and Costa Rica's 14.2 tons. However,
it leads Ecuador (7.5 tons) and the Windward Islands (4.3 tons).
The latter two countries are the main suppliers of bananas to the
UK market. Belize has the potential to further increase yields to
higher levels with a more intensive use of modern inputs. This
would enable the industry to compete favorably with t.he more
efficient banana producing countries in the event that the creation
of a single EEC market impacts on the preferential market
arrangement enjoyed by Belize under the Lome Convention. The
industry is largely dependent on immigrant labor from Honduras,
Guatemala and Salvador which accounts for half of its work force.
Labor costs have been increased by the increase in fees being
charged for work permits (US$2.5 to US$50). Such fees should be
reduced to take into the account the need to increase the
industry's competitiveness. Another important development that
could improve considerably the industry's competitiveness is the
planned port facility at Big Creek which would permit direct
shipment of fruit to the UK and result in transhipment savings.
Further benefits wou.d be derived from improved quality in the
handing of the fruit.
36. The coming on stream of a single EEC market might have adverse
effects on the banana industry. World Bank estimates 'iave shown
that a drop in the international price of bananas may have cevere
adverse effects on banana production and on the economies of the
banana producing Windward Islands. Banana supply price elasticities
for those countries have been estimated to be in the range of
1.5-2.5. In the case ot Belize, its much flatter topography,
together with a larger average size of farm, makes banana
production more dependent on mode m inputs and, hence, for the
banana supply price elasticity to be higher than for the Windward
Islands. Moreover, alternative crops such as citrus would tend to
make the supply response to a change in re],tive prices in Belize
much more elastic and cause a larger reduction in banana
production. As citrus's gestation period is much longer than that
of bananas, non-sugar agriculture might face adverse shocks over
the medium-term in the absence of yield increases and cost
reductions.
Citrus
37. The industry has shown buoyant growth in the past five years.
Industry sources estimate that the 1983 acreage of citrus, oranges
and grapefruit, was about 12,000 acres, of which 3,000 acres were
in bad condition. By 1988, the latter had been rehabilitated and
6,000 new acres established. The industry estimates that planted
acreage could reach 30,000 acres over the next five years.
Meanwhile, yields have climbed from 150 boxes per acre in 1983 to
some 275 boxes in the 1988-89 season. The value of exports (mainly
frozen orange juice concentrate to the US and CARICOM, particularly
Trinidad and Tobago) has doubled to about US$18 million during
1984-88. A significant factor in boosting the growth of the
industry has been the beneficial treatment awarded under the CBI by
which it obtains duty free access to the US market.
- 13 -
38. The industry is located almost entirely in the Stann Creek
Valley which facilitates transportation and supervision. The Citrus
Growers Association, funded by a cess on produce, provides the
required extension services. The citrus processing industry
comprises two firms located close to each other in the Stann Creek
Valley. Since the utilization rate for both factories is about 45?,
the industry could cope with increases in output in the foreseeable
future. There are two constraints, however, to the industry's
prospects. The first relates to the incidence of the Med- fly in
the Stann Creek Valley which would entail ,-ruit losses to growers,
and warrants close monitoring. The second relates to labor
availability. About two to three weeks are required to secure a
work permit while its costs have increased dramatically.
Cocoa
39. The planted acreage includes about 1,180 acres at varying
stages of production, with the 1988 level of output being 126,000
pounds dry beans with an export value of about US$0.1 million.
Until the late 1970s, the growing of cocoa was practiced by native
Indians. The entry of Hershey Hummingbird Limited (HHL), a
subsidiary of Hershey Foods Corp. of the U.S., injected a strong
commercial dimension in the production of cocoa. This determined
effort to expand cocoa production is occurring despite unfavorable
world market trends. Cocoa bean prices are at their lowest level
since 1975 and are projected to remain low because of high global
stocks and the large number of plantings still to reach full
bearing age.
40. Two important factors favor the industry's growth prospects.
First, the role of HHL spans several activities, including
production and processing, marketing research and development, and
procurement. Second, the quality dimension is a major factor in the
ability of Belize to carve cut for itself a niche in the world
market. The cocoa is of the Criollo variety, which produces a high
quality cocoa and accounts for about 3? of world production in
contrast to the lower quality Forastero grown in the large
producing countries. Belize cocoa is used for blending purposes and
commands a significant premium over quoted market prices.
41. The constraints that in the past inhibited growth of the
industry have now largelv been removed. Inadequate infrastructure,
however, still remains a serious problem, as do two other
constraints which are basically technical in nature. The first
relates to the large degree of variation resulting from the hybrid
seed lines being used by farmers. Performance becomes difficult to
predict. Farmers still have to employ sound cultural practices such
as shade management, weed control, use of inputs, especially
fertilizers, and pruning. Lastly, post-harvest technologies require
greater attention. Fermentation of small lots of wet beans by
individual farmers results in a highly variable product which is
detrimental to obtaining a premier quality cocoa.
Fisheries
42. Both the public and private sectors have focused their
attention on the expansion to the sector. This is further being
reinforced by the efforts of foreign firms to develop shrimp
acquaculture. While supplying
- 14 -
the requirements of the domestic market, the sector also has had a
strong export orientation. Exports of fishery products rose from
about US$7 million in 1985 to US$8.5 million in 1987, with 1988
exports at about the latter level. Lobster tails account for about
two-thirds of the value of exports. While exports of conch rose by
over a fifth in 1988, the volume of exports of crustaceans has
declined notably from 1983-85 to 1986-87 while domestic consumption
has been increasing. It appears that excessive exploitation of both
lobster and conch has been taking place. In the case of lobsters
this is reflected by the decreasing average size catch per unit of
fishing effort. The depletion of these resources has been taking
place despite the existence of an annual quota and a ban on fishing
during part of the year. In the shrimp industry, the number of
trawlers is excessive.
43. Performance of the industry to date has been mixed. Before it
is able to attain adequatp levels of profitability, technical,
managerial and financial problems need to be resolved. In the
immediate future, however, only modest growth in output should be
expected. The fact that fishery products represent few of the
commodities with strong prospects of demand growth, suggests that
Belize should do its utmost to increase its exports. As a first
step, the Government would need to strengthen the Fisheries Unit of
the Ministry of Agriculture, which is seriously understaffed and
underequipped. In particular, the Unit has to develop the capacity
to support private sector efforts in shrimp mariculture and play a
more active role in enforcing regulations designed to ensure the
rational exploitation of fishing resources.
Forestry
44. This sector, which dominated the economy of Belize for several
centuries, has declined considerably in importance. As late as
1967, forest products accounted for 10 of export value. In 1985
they only accounted for 1? of export value (i.e., one million board
feet valued at less than US$1 million). By 1987 exports had
rebounded to US$26 million and have continued to increase in 1989.
To some degree, diversification of exports is occurring as wood
manufactures and furniture have tripled their export levels over
the past four years to close to US$ 0.2 million in 1987. Forest
products exports are dominated by sawnwood. Of this, rough sawn
mahogany is the most important, with some dressed mahogany and
rough sawnwood of other hardwoods. Mahogany and cedar account for
more than 90? of the value of log and lumber exports. On the
marketing side, some problems have arisen regarding quality and
quantity commitments. Shipping problems also exist, since the only
container port is in Belize City, involving high transport costs
for the more distantly located mills. The domestic market provides
a substantial outlet for the industry's output. Price controls have
been in existence for several years and have constrained the
expansion of the sector.
45. In recognition of the multiple uses that forestry resources
must play, such as conservation, wild life protection and tourism
development, together with the lack of expertise in multiple forest
management, the Government has decided to establish a Conservation
Division within the Forestry Department. It would be responsible
for the management of national parks, wildlife management and
conservation matters, and would coordinate the work program of the
different organizations working in these areas.
- 15 -
C. MANUFACTURING SECTOR
46. Belize's manufacturing industr, is mostly export oriented. it
mainly comprises the production of garments, citrus concentrates
and sugar refining. There are also indlcations of some buoyancy in
small scale enterprises producing for the domestic market. Since
1985, garments' output has been growing at 192 per year an average.
Production of garments expanded by about 402 in 1988 with the
establishment of new plants. Despite favorable international
prices, sugar production has stagnated because of the reduced
availability of sugarcane; citrus coalcentrates have been afferted
by adverse weather conditions which have reduced production of
oranges and grapefruits.2
47. Prospects for manufacturing are good, mainly because of
previous investments coming Into fruition. Investments in the
citrus concentrate industry have increased processing capacity and
product quality. This, together with the increased acreage planted
and elimination of export licensing requirements for citrus
concentrates, should enable the industry to expand rapidly over the
medium-term.
48. The profitability of the sugar industry hinges on its access to
the preferential US and EEC markets. Belize's quota in the U.S.
market has been increased in 1989. However, the possibility of its
eventual phasing out is still an importanL concern for the
eWpansion of the industry. The possible decreae- in the EEC sugar
price also clouds the industry's expansion potential. However, as
the industry is already marketing a large portion of its production
competitively at world market prices and its pricing arrangement
for sugar cane takes proper account of world price changes, it
should be able to compete in world markets as long as the average
of world market and preferential market prices is equal to or
higher than its current average cost (i.e., US$0.11 per
pound).
49. The garment sector faces increasing labor demand pressures.
Currently more than 1,000 workers, most of them female, are
employed in the existing plants. Labor demand pressures are also
likely to affect the viability of an industrial park being
developed in the Belize District. The construction of factory
shells has already begun, but garment manufacturers have been
unsuccessful in recruiting additional labor. As the pool of
suitable workers has been shrinking, labor turnover has been
increasing. Another issue involves th': benefits under the CBI. Of
six firms producing garments, only two bring their pre-cut
materials from the U.S. while the others use other supply sources
to take advantage of Belize's location to produce lower priced
garments for the U.S. market to avoid quota restrictions since
Belize is not subject to a quota under the Multi-Fiber Agreement
(MFA).
50. A critical issue in manufacturing is the high cost of
electricity. The larger manufacturing companies, however, have been
generating their own supply to reduce costs and improve
reliability. Although electricity
2/ The overall growth rate for manufacturing as presented in
Belize's national accounts is estimated utilizing 1984 weights even
though the sector has, since then, undergone significant structural
changes. Since the weights of the more dynamic sectors are
underestimated, their growth rates are also understated.
- 16 -
tariffs for low consumption levels were reduced in 1988, the new
rates provide monthly savings of only US$5.9 for the industrial
consumers. Over the medium-term, electricity tariffs for industrial
users (US$0.205 per kwh) could be reduced in the area
interconnected with Mexico once the interconnection is completed.
This implies that, starting in July 1989, the St. Elena and Corazal
areas and, in May 1990, the Orange Walk area will be supplied
electricity at a cost to the power company of US$0.03 per kwh lower
than its ~.rrent generation cost of US$0.105 per kwh. As the Belize
Electricity Board has determined that rates will not be reduced,
the interconnection investment will be paid-off in two years.
D. TOURISM
51. Tourism has been evolving rapidly as a growth industry. Tourism
receipts increased by 28X in 1988 as a result of both increases in
tourist arrivals and an increase in the average length of
stay.
52. Growth prospects for the sector are promising, particularly
:.ecause of the potential to develop archaeological sites, in
addition to the rapidly expanding sun and beach tourism. However,
the rate of expansion of the sector will depend on the speed with
which additions to the existing stock of hotel rooms is increased
to meet the rapidly rising demand. In the Belize District, a total
of 280 new rooms for higher-priced tourism are expected to be
available by end 1990. However, in San Pedro- -the most important
tourist destination--possible expansions in tourist facilities are
constrained by inadequate infrastructure. Transport infrastructure
for tourism will be improved when additions to the Phillip Goldson
International Airport are completed. The airport will then be able
to receive direct flights from Europe and provide the facilities
for increased tourist arrivals.
- 17 -
Public Seztor Investment
53. At approximately BZ$69 milllon public sector investment in
FY88/89 was similar to the planned level of BZ$67 million. This
improvement reflects a strengthening in project implementation.
Hovever, there are a number of areas where Government attention is
needed to sustain adequate levels of public investment over the
next four years. These relate to the staffing of planning
departments, classification between capital and recurrent
expenditures, finalization of project design, development of a
project pipeline for external financing and coordination between
the respective ministries and the donor agencies.
Table 6: COMPOSITION OF THE PSIP, FY88/89-FY92/98 (In
percent)
FY88/89 FY89/90 FY90/91 FY91/92 FY92/98 AVERAGE
Economic Sv,rvices 68.8 70.6 67.9 76.7 72.5 69.9 Agrlculture,
Forestry 17.3 19.7 28.8 40.6 28.6 2a.6
and Fisheries
Manufacturing 9.6 6.1 4.6 0.0 0.0 4.2
Mining 0.6 0.5 0.0 0.0 0.0 0.a
Tourism 0.6 0.6 0.8 0.0 0.0 0.6 Transport and 14.4 80.5 11.7 8.9
11.1 22.4
Communications
Power Supply 7.8 8.0 13.1 0.0 0.0 8.2
Water Supply 9.8 6.8 11.8 26.2 87.6 10.6
Social Services 84.2 24.9 25.0 18.5 20.2 24.8
Education 8.2 7.2 4.7 7.2 9.1 6.8 Health and Sewerage 12.0 12.8 8.8
11.8 1.2 10.6 Housing and Community 16.0 6.4 11.5 0.0 10.0
6.9
Services
General Public Services 1.8 2.2 2.1 2.7 8.5 2.6
Administration and Planning 1.8 0.9 1.1 0.0 0.0 0.9 Public Safety
0.0 1.1 0.6 2.7 8.5 1.4 Other Fixed Investments 0.4 0.2 0.4 0.0 0.0
0.3
Financial Investments 5.2 2.8 5.0 3.1 3.8 8.2
TOTAL PROJECTS 100.0 100.0 100.0 100.0 100.0 100.0
Source: Statistical Appendix, Table 5.4.
54. For the period FY89190 to FY92/93, the public sector investment
program (PSIP) has been projected, in accordance with the country's
macroeconomic requirements for growth, at some BZ$326 million
(US$163
- 18 -
million). However, the country's core PSIP would total BZ$188
million of which about 872 is schedulled for ongoing projects.
Agriculture, manufacturing, mining and tourism comprise 29Z of the
projected PSIP, with agriculture individually accounting for 24Z.
Projects designed to improve the country's infrastructure and
eliminate constraints to diversification, i.e. transportation,
water and power facilities, correspond to 412 of the PSIP. Projects
for the social services sector, which would help to provide the
basic needs of the population, i.e. health, housing and education,
account for 242, while public administration and other projects
comprise the remaining 62.
55. The composition of the PSIP is consistent with the Government's
objectives of providing the policy framework and infrastructure in
support of private investment. The emphasis is on the upgrading of
the country's Southern and Hummingbird Highways, the constraction
and upgrading of bridges throughout the country, the maintenance of
the Northern Highway and the IBRD-funded Road Rehabilitation
Project. The PSIP also focuses on improving the productivity and
foreign exchange earning capacity of agriculture through credit
programs, a project for the eradication of the screwworm, marketing
programs (i.e., projects for the commercialization of alternative
crops); small farmer crop development, and construction of rural
access roads and bridges to facilitate efficient transportation of
agricultural produce. Projects to foster the expansion of
manufacturing and tourism include the enlargement of industrial
estates for new manufacturing industries; export and investment
promotion projects in tourism, and a line of credit to provide
working capital and equipment for industry. The country's social
services have also been targeted with educational and health
projects under the Basic Needs Trust Fund to contribute to
improvements in the q-iality of life, training programs to increase
employment and productivity, projects in health management planning
and the New Belize City Hospital to strengthen the provision of
health services, and community development programs to encourage
self-help projects.
Financing of Public Sector Investment
56. Belize'q external financing requirements are based on the
medium and long term projections discussed in Chapter IV. External
financing requirements during FY89/90-FY92/93 will be determined by
the level of domestic resource mobilization. The requirement for
public sector investment is estimated to be US$163 million.
Scheduled amortization requirements amount to US$32 million for the
four year period. Public sector savings and capital revenue are
projected to provide approximately US$159 million. Scheduled
disbursements under external commitments for ongoing projects would
provide US$ 54 million. A financing gap for the four years of US$58
million would remain, of which US$48 million represents financing
for new projects for which the Government is seeking donor
assistance.
57. Projects with unidentified sources of financing include the San
Pedro Airstrip Relocation; Bridge Replacement in Bartom Romie;
upgrading of the Belize Municipal Airport; extension of the Water
System in Belmopan; Museum Development; and Housing
Development.
- 19 -
Table 7: PUBLIC SECTOR FINANCING REQUIREMENTS, FY89/90-FY92/93 (in
millions of BZ dollars)
Total FY89/90 FY90191 FY91/92 FY92193 BZ$ US$
Requirements 121.4 86.6 87.0 95.0 390.0 195.0
Public Investmenta/ 108.8 71.2 70.2 75.8 326.0 163.0 Amortization
12.6 15.4 16.8 19.2 64.0 32.0
Sources 107.0 60.8 49.8 56.1 273.7 136.9 Public Savings 73.5 73.8
72.2 71.0 291.2 145.6 Capital Revenue 6.2 6.9 6.9 6.9 26.9 13.5
Domestic Credit -43.0 -44.1 -37.9 -27.1 -152.1 -76.1 Ongoing
External 70.3 24.2 7.9 5.3 107.7 53.9
Financing Gap 14.4 25.8 37.2 38.9 116.3 58.2 Identified External
8.0 8.3 2.3 1.2 19.8 9.9 Unidentified External 6.4 17.5 34.9 37.7
96.5 48.3
a/ Includes projection of the existing pipeline in addition to
projects not yet identified.
Source: Statistical Appendix, Tables 5.4 and 9.2.
- 20 -
IV. ECONOMIC ISSUES AND PROSPECTS
58. The primary economic management and development challenge for
the Government of Belize is to both maintain, over the short term,
prudent macroeconomic management and, over the medium-term, the
momentum achieved in economic growth and diversification of the
economy. The public sector's role in this effort centera on two
broad policy fronts. First, to continue to improve public
investment performance with regard to the economic and social
infrastructure, particularly eliminating crit cal bottlenecks, and
to ensure that the overall incentive structure is coniducive to
efficient resource allocation. The latter requires that demand
pressures on the labor market should be alleviated by loosening
restrictions on immigrant labor work permits. Second,
diversification of agriculture should continue to minimize any
adverse effects on banana production and exports which could emerge
by the coming on stream of the single EEC market by 1992.
Projection Assumptions
59. The economic projections are based upon a set of assumptions
considered to be the most likely ones.
Economic Growth
60. Growth in the economy will be driven by the projected growth of
agriculture and tourism. In agriculture, citrus and bananas are the
key dynamic commodities since the medium-term growth prospects for
sugarcane production are projected to remain weak. However, banana
production is projected to remain constant beyond 1991, following
the expiration of the Lome Convention. The implicit assumption is
that a system of quotas in the EEC market may be introduced to
replace the current system. In citrus, an acreage expansion for
oranges production of about 601 is projected between 1988 and 1994
with a seven year gestation period based on existing private sector
plans. The expansion in acreage, together with the projected
increase in yields (from 128 boxes per acre in 1988 to about 250
boxes in 1994) would allow production to increase at an annual
average rate of 162 between 1988 and 1998. In grapefruits, acreage
is projected to increase by 90Z between 1988 and 1995 while yields
are projected to increase from 257 boxes per acre in 1988 to about
325 in 1991. These two factors would inc.ease grapefruit production
at an annual average rate of almost 9% between 1988 and 1998. In
bananas, acreage is projected to increase by 1152 from 1988 to
1991. Banana production is projected to increase at an annual
average rate of 32? between 1988 and 1992 including increases in
yields of about 40% between 1988 and 1992. Tourism is projected to
grow by 162 per year on average over the medium-term, predicated on
increases in the number of arrivals and length of stay of visitors.
Over the longer- term, an annual average rate of growth of 6Z is
projected. Manufacturing growth prospects are clouded by the weak
performance envisaged for sugar production. Moreover, garments
production is projected to increase by only 4% per year because of
the likely continuation of labor shortages. On the other hand,
citrus concentrates are projected to increase at an annual average
rate of 112 between 1988 and 1998 in line with the expansion of the
citrus industry.
61. The overall projected rate of economic growth has been derived
by using 1984 sectoral weights. The economy is projected to grow by
about 4? on average in real terms duringl1989-93 as a result of the
projected expansion in tourism and agriculture. Beyond 1993, this
growth is
- 21 -
projected to slow down to about 32 per year on average, because of
lower projected growth of both sectors.3
62. Exports of goods are projected to grow at an annual average
rate of about 7Z in real terms between 1988 and 1994 in reflection
of the projected expansion in the production of citrus and bananas.
During 1994-98, exports of goods are expected to grow at only 3%
per year in real terms reflecting the lack of growth in banana
output. Exports of non- factor services in real terms are projected
to grow at about 62 per year on average. Real imports of goods are
projected to grow at about 6Z until 1994 and at about 4%
thereafter.
Table 8: ACTUAL AND PROJECTED MACROECONOMIC INDICATORS,
1988-98
Actual Projected 1988 1989-93 1994-98
Real Growth Rates
Gross Domestic Product 4.5 4.1 3.2 Gross Domestic Income 3.8 4.2
2.8 Consumption 3.5 3.9 3.0
Public 2.7 3.5 2.5 Private 3.8 4.1 3.1
Fixed Domestic Investment 13.2 2.0 3.1 Exports GNFS 12.8 6.7 4.2
Imports GNFS 13.2 5.6 3.8
Shares of GDP (2)
Gross Domestic Product 100.0 100.0 100.0 Gross Domestic Income
106.4 108.0 105.5 Consumption 87.2 86.7 86.0
Public 19.2 19.0 18.2 Private 67.9 67.7 67.8
Fixed Domestic Investment 24.1 23.2 21.5 Exports GNFS 62.5 68.2
73.0 Imports GNFS 73.8 78.1 80.5
Source: Statistical Appendix, Table 2.3 and 9.1.
3/ In 1994, however, 4.6Z growth is projected on the basis of an
increase in agriculture output of almost 10 as past investments in
citrus come on stream. This also increases manufacturing outpilt by
6Z.
- 22 -
63. Private investment has been projected on the basis of
maintaining a private investment GDP ratio of 12.5Z in constant
prices. Public investment is estimated to increase from 11Z of GDP
in 1988 to about 14? by 1989. Beyond 1989, public investment is
projected to decrease to 9? of GDP. Private consumption is
projected to increase at an annual average rate of about 4? over
1989-98. Public consumption is projected to grow at an annual
average rate of 3X during 1989-98. National savings are projected
to finance between 86? and 100Z of fixed gross investment during
1989-98.
Public Finances
64. Public sector savings are projected to decline from almost 14?
of GDP in 1988 to about 102 per year on average during 1989-93 and
6? during 1994-98, as a result (f projected increases in public
consumption and of a projected slower growth in public sector
current revenues. Public sector savings are projected to finance,
on average, about 88? of public investment during 1989-93 and 67Z
during 1994-98. The public sector overall deficit is projected to
average v.4Z of GDP during 1989-93 and 2.5? during 1994-98.
Table 9: ACTUAL AND PROJECTED BALANCE OF PAYMENTS, 1988-98
(US$ million)
Actual Proiected 1988 1989-93a/ 1994-98a/
Resource Balance -11.8 -4.8 -8.9 Exports GNFS 167.9 252.4 389.9
Imports GNFS 179.8 257.2 398.8
Net Factor Payments -9.0 -15.4 -21.4 Of which: Interest on Public
Debt -4.1 -6.1 -10.6 Private Transfers 15.0 17.7 22.4 Current
Account Balance -5.8 -2.5 -7.9
Capital Account 24.5 21.2 17.6 Public Capital 12.1 16.6 13.0
Private Capital 12.4 4.6 4.6 Official Grants 7.5 6.6 3.5
Disbursements 14.7 17.6 22.7 Amortizations 5.8 8.4 13.1 Other b/
-4.3 0.8 -0.1
Changes in Reserves -18.7 -18.7 -9.7 (increase-)
a/ Average per year. b/ Includes errors and omissions.
Source: Statistical Appendix, Tables 3.1 and 9.2.
- 23 -
Prices
65. The deflator for the projections was constructed utilizing
price projections of the different GDP components. Prices for the
manufacturing, electricity and construction sectors are projected
to grow at the same rate as the World Bank's U.S. manufacturing
unit value (MUV) index. Prices of the primary sectors have
reflected the World Bank's commodity price projections. Prices of
services are projected to increase at a higher average rate than
the MUV to reflect wage pressures on the price of services.
Balance of Payments
66. Although both the resource and current account balances are
projected to be in deficit during the projection period, capital
inflows are projected to provide a surplus in the overall balance
of payments during most of the period. This, in turn, will meet the
increase in the demand for cash balances as the economy expands.
The debt service to exports ratio is projected to decrease from
6.4Z in 1988 to 5.9Z by 1998, while the ratio of external debt to
GDP is projected to decrease from about 42Z in 1988 to 33% by 1998.
As Belize continues to borrow only for high-quality infrastructure
investments and avoids excessive credit creation, the country will
remain creditworthy for modest amounts of medium and long-term
borrowing, particularly from official sources.
- 24 -
Poge 1 of 6
iEIZE: "MA 1 40N It OJOCTS AND SOURCES OP FINANCING,
FY1989/90-1992/93 (UZs 000)
Eaxtrnal Financing Tat%I LocaI External ---------------------
Project Cost Cost I Source Coat
PROJEC TOTAL 250,109 71,905 178.002
ONCOINQ 210.573 64,362 146.014
Agric., Veor.ory and Fisheries 25,662 9,875 26,277
Afri"anisad Bes Mon. & Control 578 376 202 85 CMA Agricultural
Reahrc ed Cavsiiopment 460 0 460 100 EDF Beliz- Livestock
Developmnt - Phu*. ii 7,660 1,800 5.860 77 USAID Comrcialization of
Alternativo Crop- 4.171 475 8,696 89 USAID Grouper Cage Culture
Project 293 C 298 100 LSAID Hoalchn Marina Reserve 278 C 278 100
USJWF Land Developen-Acquisition 2,800 2.800 0 0 LOCAL Mapping of
Agric. Lani/Forestry 228 50 178 78 UNDP Mountain Pine Ridge
Forestry Developxent 991 0 991 100 UK Purchase t Equipment -
Forestry 128 128 0 0 LOCAL Regource Mapping 848 0 848 100 INWP
Rural Acon Poed and Bridges 9448 1448 8,000 85 USAID Screaora
Eradication 7,999 1.000 7,000 88 USAID Sugar offset-Agric.
Diversification 1.060 1.060 0 0 LOCAL Sugar Quota Offset -
Infrastructure 1,800 1,00 0 0 LOCAL Toledo Agricultural Marketing
1,783 28 1,788 98 USAID Toledo Sell Farsrs Developsent Project
3,887 8ll 3.076 86 IFAD
Tourias 1.394 158 1,241
Caracol Excavotien/Consolidation 791 0 791 100 USAMD Touri;
Promotion 603 15 3 450 78 USAMD
Manufacturing 18.931 266 13,665
Export and Investnt PromIon 8S.81 266 8,815 98 USAIO Ladyvill
Idustria I Estates Pro!ect 6.,00 0 6,600 100 Coo Second
Consolidated Line of Credit 3,650 0 S8.S0 100 CD0
mining 595 lOS 790
Qold Prospecting Program 325 65 260 80 UNDP Petroleum Dev.lpmnt 570
40 S80 98 UWP
EOM%I=C N lllASTWJCTL 98,S40 17,821 75,819
Traneortstion 46,841 9,88 87,006
Airport Facilities 14.402 2.601 11 801 82 CD6 Airport Project -
Telecom. Eqpat 2.400 0 2,400 100 oPEC Airport Terminal 8,800 0
8,300 100 UK Bali" City Swing Bridge 2,868 0 2.,6S 100 CHINA
Coastal Road 1.000 1,000 0 0 LOCAL Hu_ingbi-d Highway 8,177 527
4,680 90 EDF "tue. Northern Highwy (10-19) 1,777 1.777 0 0 LOCAL
Road Maintenance Unit ll 7,038 1,635 6,400 77 UK Road Rehabi
ltation It 8,475 1,695 1,780 51 I8RD TDL Rural Roads 410 100 810 76
UK
Poewor 20,700 5,5C0 15,200
Water 26,299 2,686 28,612
Better Haalth - Water A Sanitation 3,274 1 169 2.105 64 USAID BSe
City Water/Sanitation 21,399 1,899 20,000 93 CIDA Village Water A
Sanitation 1,091 118 978 69 CARE Water & Sanitation uSS 0 535
100 W41CEF
- 26 -
BJIZE: MAJOR ONWoIN PROJECTS AND SOURCES OF FINANCIN,
FY1989/90-1992/93 (BZS 000)
Extarnal Financing Total Local External
------------------------
Project Coat Cost U Source Cost
|SOCAL SERVICES fi,033 27,190 27,643
Fi;uc"tion 7,571 1,06; 6,510
Central American Scholarships 4,279 0 4,279 100 USAID Education
Planning SOO 0 300 103 I1BRD Peace C&rpa Volunteer Programe 600
0 SO0 100 USAID/PEA School Health Education 1I 0 e1 100 LUICEF
Training for Employment/Productivity 1,486 236 1,250 84 USAID
University Collage of Belize 826 825 0 0 LOCAL
Health 26,807 5,473 21,133
eattor Health - Vector Control 1.882 710 972 68 USAID 8NTF - Health
2.000 0 2,000 100 CD9/USAIM Child Survival Support Prograwme 700 0
700 100 UNICEF Health Management Planning 414 183 231 56 UNDP/PAHO
Incresaad Productivity/Health 12,134 2,99S 9,139 76 USAID
Integrated Development Program 1,345 0 1,345 100 LMTCeF Maternal
& Child Health 682 136 547 88 CARE New Uze City Hoapital 6,950
750 6,200 89 EDF Rapair/14tc, of Medical Bldga 700 700 0 0
LOCAL
Housing and Counity Development 20,655 20,6b5 0
Community Developent 16,320 16,320 0 0 LOCAL Counity Servicee 1,395
1,395 0 0 LOCAL Hoaing Development and Maintenance 2,940 2,940 0 0
LO'AL
GNERAL ADINlISTRATION 9,752 9,752 0
Public Administration 1,220 1,220 0
Computerization SOO 300 0 0 LOCAL MW Equipmnt Sparee 920 920 0 0
LOCAL
Finance 8,832 8,632 0
Investment - Property Equity 3,729 3,729 0 0 LOCAL Lan- to
Statutory Bodies 2,443 2,443 0 0 LOCAL Wass Loan Fund 2.360 2,360 0
0 LOCAL
OTHER 5eo 0 b90
_ _ _ _ _ _ _ _ _ _ _ _ _ _ - -- - ------- --- - ------ ----------
---------- ---------- ---------- ----------
Page 3 of 6
BELIZE: MAJOR NE PROJCTS AND SOURCES OF FINANCING,
FY1989/90-1992/93 (BZS 000)
Extornal fi.iancing Total Loca. External
-----------------------
Proiect Coat Cost s Source cost
NEW 39,681 7,843 31,988
Agriculture, Forotry 4 Fishing 17,871 3,121 14,746 _
_______________ ------------
Agricultural Credit/Export 0ovelopment 7,189 604 6,88 92 1TRD Lin*
of Credit-Ace. Cattle Expansion 2.,24 b24 2.300 81 LlNKNOWN Surveys
- ;FAD Project 197 197 0 0 LOAL
iONOMIC INFRASTRUCTIJE 7,468 1,600 6,960
Transportation 6,SO 1,800 4,080
Airstrip Relocation - San Padro 450 0 460 100 UNM Bridg- Replacesnt
- sarton Romie/JVrris 200 0 200 100 UNOKOWN Coistruction- 4 Bridges
Southern Highway 1,500 0 1,500 100 lUK Hiwkaaorth Bridge Rehab. SOO
SOO 0 0L OCAL Reconstruction of Stann Creek Valley Rd. 1,S0 0 1,500
100 UK Southern Hgwy Mtce. Eqpat. 1.200 1,200 0 0 LOCAL Upgrading
of BSa City Hun. Airport 400 0 400 100 UNKNOWN
Water 1,918 0 1,918
Calcutta/Carolina Villages Water System 118 0 118 100 UNKNOWN
Efteneion-Belmopan Water Systea 600 0 600 100 UNKNOWN Water and
Sewerage - San Pedro 1,000 0 1.000 100 QDB/CIDA
SOCIAL SEVICfS 11.074 700 10,374
Education 8.674 400 8.274
1 Primary School/I Practice School 875 0 87S 100 UNOWN Extension
Belmopon Junior School S81 0 8S1 100 0DB Conatruction of Belmopan
Sixth Form 250 0 250 100 lt404WN Construction of Camelote Prienry
School 415 0 415 100 wNe(OWN Developmnt of Archaeological Sites
2,500 0 2,500 100 UNONaWN Extension Belize Junior Secondary #2 875
0 375 100 UNl(NOWN Extension Junior Secondary School #1 461 0 461
100 608 Extension Hopan High School 167 0 167 100 CDO Hopan Tech
High School - Eqpat 100 100 0 0 LOCAL -- seum Developoent 800 0 800
100 UNKN(WN Nso Primry School - Belam 100 100 0 0 LOCAL O.W. Tech.
Expansion 200 200 0 0 LOCAL Reconatrucxion-Senta Elena Prim. 700 0
700 100 UNKOWN Textbook Project 600 0 600 100 CDA Textbooks for
Primary School Children 600 0 800 100 DF Blis- Institute
Rehabilitation 200 0 100 100 COD/USAID
Health 1.100 0 1,100
Housing and Community Development 1,800 800 1,000
Housing Developent 1,300 300 1,000 77 UNKNOWN
GENERAL ADMINISTRATION 8,119 2,219 900 _____________________
Public Administration 769 769 0 -_-_-_--- -_-_-_- _ _ _
Construction/Office B;dg-4eol..Ptrol. 250 250 0 0 LOCoL Extension
to Ministry Building - NatRes 100 100 0 0 LOCAL Purchaae of
Phototypestter 100 100 0 0 LOCAL Purchase of Regal Offast Machine
119 119 0 0LOCAL U.D.C. Building 200 200 0 0 LOCAL
Public Safety 2.850 1,450 900
Equipment and Vehicles - Police 900 0 900 100 JIC Hurricane
Sheltere 50 SOO 0 0 LOCAL New Police Stations 600 go 0 0 LOCAL
Police Equip.(Radio Network) 150 1EO 0 0 LOCAL Replecesnt of Police
Vehicles 200 200 0 0 LOCAL
______________________________________________________________________________________
-28- ANNEX 1Page 4 of 6 pages
bmELZE: riLrc ScOR PV4MTIME PROGRAUME. FY1989/90-1992/93 (8ZS
000)
1989/90 1990/91 1901/92 1992/93
Tot Eat Loe Tot Ext Loc Tot Ext Lac Tot Ext LEo
PROJECTS TOTAL 108a.83 81,070 27,758 49,6s8 35,024 14,661 16S.34
13,129 3.255 13,040 10.440 2.600
ONGOINC 94,419 70,333 24.086 37,000 24,t89 12,811 10,042 7.911
2.131 6,950 5,250 T,ioo
ECONOMIC SSRrCES 21,956 17.437 4,520 9,219 7.351 1,888 2,992 2.411
581 1.600 1,250 350 ____________ ___
Agric., Forestry and Fashelio 15,294 21.02t 4.274 6.514 4.735 1,779
2.042 2,411 581 1,600 1,250 350
A,1nicanised Sess Msr, A Control 238 72 160 222 72 150 0 0 0 0 0
0
AgicvIlturel Research and Oevelopment 1? 152 0 153 153 0 0 0 0 0 0
0
Book, *or Agric. Lbery 0 0 0 r. 0 O 0 0 0 0 C 0
CatralFirm CnVyex 0 0 0 0 0 0 0 0 0 0 0 0
Cennarc alizaticon of Alternative Crops 1,000 750 250 1.550 1,446
11a 1,600 1.250 350 1,600 1,250 350
Comoosite Flour Devlopsent 0 0 0 0 0 0 0 0 0 0 0 0
Conch anngement 0 0 0 0 0 0 0 0 0 0 0 0
Deep Soa Fishing 0 0 0 0 0 0 0 0 0 0 0 0
Grouper Cage Culture Pro;ect 121 121 0 0 0 0 0 0 0 0 0 0
Holchan Marine Reerve 147 14? 0 91 91 0 0 0 0 0 0 0
Land Development-Acquisition 1,000 0 1,000 1.000 0 1.000 0 0 0 0 0
0
Mapping of Agric. Land/Forestry 103 78 25 0 0 0 0 0 0 0 0 0
Mountain Pine Ridge Forestry Oevelopment 366 366 0 500 500 0 0 0 0
0 0 0
Purchase of Equipment - Forestry 110 0 110 0 0 0 0 0 0 0 0 0
Resource Mapping 238 238 0 0 0 0 0 0 0 0 0 0
Rural Acceas Road* and Bridge, 4.700 4,000 700 0 0 0 0 0 0 0 0
0
Screaxore Eradication 4,180 3,839 342 1.231 1.000 231 1,192 961 231
0 0 0
Sugar offuat-Agric. Diversification 950 0 950 60 0 60 0 0 0 0 0
0
Sugar Quota Offset - Infruatructure 467 0 467 0 0 0 0 0 0 0 0
0
Toledo Agricultural Marketing 565 537 28 218 218 0 200 200 0 0 0
0
Toledo Small Farmers COvelopment Project 957 721 236 1,4d0 1.255
225 0 0 0 0 0 0
Tourism 626 532 94 409 409 0 0 0 0 0 0 0
Carecol Excavation/Consolidation 382 362 0 409 409 0 0 0 0 0 0
0
Tourism Pro n 244 150 94 0 0 0 0 0 0 0 0 0
Manufacturing 5,497 5.410 87 2,296 2,207 89 0 0 0 0 0 0
Export and Investment Promotion 1,647 1,560 87 296 207 89 0 0 0 0 0
0
Lady.ille Induatrial Estate. Pr_ject 2.000 2,000 0 2.000 2,000 0 0
0 0 0 0 0
Line of Credit 0 0 0 0 0 0 0 0 0 0 0 0
Second Consolidated Line of Credit 1,e50 1.830 0 0 0 0 0 0 0 0 0
0
Mining 539 474 65 0 0 0 0 0 0 0 0 0
Cold Prospecting Programm 161 138 25 0 0 0 0 0 0 0 0 0
Petroloue Development 378 338 40 0 0 0 0 0 0 0 0 0
ECONOMIC INMASTRuCTURE 47,178 39,964 7,2