Social Protection in the Caribbean || Social Protection in Belize: Planning for a 'Rainy Age'

Social Protection in Belize: Planning for a 'Rainy Age'Author(s): Ralph HenrySource: Social and Economic Studies, Vol. 59, No. 1/2, Social Protection in the Caribbean(March/June 2010), pp. 31-60Published by: Sir Arthur Lewis Institute of Social and Economic Studies, University of the WestIndiesStable URL: http://www.jstor.org/stable/27866611 .

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Social and Economie Studies 59: 7 & 2 (2010): 31-60 ISSN: 0037-7651

Social Protection in Belize: Planning for a

'Rainy Age'

Ralph Henry*

ABSTRACT

This paper seeks to summarize research that was conducted in 2004 in Belize as part of a project on Social Protection sponsored by the Caribbean

Development Bank, the European Union and Department for Internation al Development (DFID) in three countries in the Caribbean - St. Lucia, Belize and Grenada. The paper revisits the concept of social protection, using Belize as an example of a Caribbean-type small economy, and posits the view that while there is much value in the use of the social protection

framework in approaching the challenges faced by Caribbean countries in

the present conjuncture in the world economy, the fundamentals dictate that Caribbean Governments focus on the essential challenges of economic

and social transformation. Besides dealing with such hurdles as human

capital, environmental risks, and the HIV/AIDS pandemic ? all major

problems in the Caribbean ? Belize has to cope with the emergence of an

underground economy, with crime and violence, and with inter-group

equity in a very plural society. Thus, social protection has to be seen as a

proximate objective, ensuring efficiency of social and other services, but all in the context of quickening the pace of economic and social

transformation. The ultimate objective is to direct energy at the essential

development paradigm. Social protection normally treats with protection

of the vulnerable in facing a 'rainy day': Belize, like the rest of the

Caribbean, faces a 'rainy age' in the early 21st century.

This paper draws from a study of social protection in Belize that was sponsored by the Caribbean Development Bank and other

development partners in 2004. The Caribbean Development Bank

has had a long history of promoting interventions that target the

poor and the vulnerable in the Commonwealth Caribbean. One of

its longest established programmes is the Basic Needs Trust Fund

through which infrastructure in poor communities has been

financed in the Caribbean since the 1970s.

* This paper is based on the following study: Henry, Ralph. 2004. Final report: Social protection and poverty reduction in the Caribbean - Belize. Sponsored by Caribbean Development Bank. The other sponsors of the study were the

European Union, and the Department for International Development.



32 SOCIAL AND ECONOMIC STUDIES

In this regard, the Bank had developed a strategy long before

the World Bank sought to display a human face in treating with the

fall-out effects of poverty from its structural adjustment measures

recommended for indebted countries in the 1980s. The Caribbean

Development Bank was also in the lead in developing approaches to poverty analysis in the Caribbean in the 1990s, which sought to

take account of its multi-dimensional character. A similar concern is

evident as the Bank seeks to address the problem of social pro tection in the economic conjuncture faced by Caribbean states in the

face of the forces of globalization. A rich literature has been spawned in recent years on social

protection. While the term may still be relatively new, the issues

that are covered are not. The Asian Development Bank defines

social protection as:

policies and programmes designed to reduce poverty and

vulnerability by promoting efficient labour markets,

diminishing people's exposure to risks, enhancing their

capacity to protect themselves against hazards and

interruption or loss of income.

In that regard, the Asian Development Bank sees social

protection as comprising five elements:

Labour markets

Social insurance

Social assistance

Micro- and area-based schemes

Child protection. Some definitions focus on the intent, and encompass all

interventions, whether undertaken by the public sector or by NGOs

and private sector agencies, which seek to support communities,

households, and individuals in the management of risks and

vulnerabilities. Key risks that need to be confronted include:

Economic risks

Life cycle risks

Social/governance risks

Environmental risks.

It could be argued that the more recent focus on the

Millennium Development Goals has a similar intent to the

management of risks. Indeed, the development literature is littered with catch words that are modified, from time to time, to refresh the



Social Protection in Belize 33

rallying call to the international community in addressing the

structural realities of poverty and inequality that have remained

intractable as major challenges in the development agenda.

Fundamentally, the capacity to manage risks is essentially a

function of resources. The availability and discretion over the

distribution of resources mobilized for social protection are

determined by socio-political factors. More particularly, 'distribu

tive polities' tends to dictate the quantum of resources and the

programmatic interventions that may be made by the state (Alesina and Rodrik 1994).

In the Caribbean context, the first attempt at a coherent

framework for social protection dates back to the recommendations

of the Moyne Commission, which formed the basis for social service

intervention in the immediate post-World War II period. As these

countries embarked on their independence, starting in the 1960s,

they sought to upgrade their legislative arrangements for the social

security and social services, including in particular, the introduction

of such programmes as national insurance, workmen's compensa

tion, public assistance to the needy and old age pensions.

By and large, Caribbean countries have attempted and

succeeded in observing the main tenets set by international society in respect of minimum human and basic rights. Universal primary education has long been achieved and universal secondary enrolment has become a primary goal. There is general primary health care available to the vast majority of the population. All of

the countries score in the middle range or higher on such indices

like the Human Development Index. By any measure, their

expenditures on education, health, and a range of social services,

would seldom put them among the lagging countries, having

regard to their overall expenditures. The level of expenditures on social services is an outward

visible sign of the commitment of governments. However, the mere

size of the expenditure says nothing of the quality and quantity of

the benefits that are derived by definable groups within the

population. There is nothing inherent in the distribution of social

and related services that guarantees efficiency. Ravallion (2005) has

argued that while, conceptually, it is possible to think in terms of a

production function in which the outcome can be measured by social indicators like life expectancy, infant mortality and literacy rates, the microeconomic foundations of these indicators are ill




defined:

'While there are production functions under the surface

somewhere, there is clearly a lot more going on in determining the aggregate relationship between measured social outcomes

and social spending and/or national income' (Ravallion 2005:

278).

In effect then, the identification of social protection measures

is one task, in and of itself: the determination of the efficiency and

equitability of social protection is fraught with considerable

challenges. In the final analysis, the instruments and the targeting of social protection will have to be decided through the political process since there are many more areas deserving of expenditures and allocations under the rubric of social protection than Govern

ments in the Caribbean have the resources to undertake and

manage in a sustainable fashion. There is need for hard choices,

essentially effected in the political process. The main thesis of the present paper that derives from work

conducted in Belize in 2004, is that this country, and the rest of the

English-speaking Caribbean, are in a similar conjuncture as they were following the Great Depression to the mid 20th century. The

required restructuring of their economies will create major difficulties for poorer sections of the population.

In the midst of these changes, the entire country has to

accommodate to the impact of global warming and to a change in

weather patterns, which have increased the environmental risks faced by the Caribbean. Effective social protection has to be

anchored in development policy, ultimately.

COMPONENTS OF RISK

This section reviews some of the risks faced by Belize, following which an attempt will be made to measure the vulnerability of the

population.

Macro-economic Risks

Belize has been heavily reliant on primary products for export

earnings: sugar, citrus, bananas, and fish account for over 80

percent of its visible exports, with preferential arrangements being critical to the market penetration of some of these exports. The

fisheries subsector has displayed moderate performance but faces




the risk of over-fishing of stocks, especially in respect of its highly

prized lobster fisheries. More recently, it has entered the area of fish

farming which seems to be relatively successful.

Light manufacturing oriented to exports, though modest, was

making a useful contribution to its earnings in the 1980s and early 1990s, under the Caribbean Basin Initiative. In the area of garment

production, Belize attracted operators from the Far East, seeking to

exploit its quota under the Multi-fibre Agreement. The advent of the WTO, and with that, the move to the freeing

up of trade through the erosion and elimination of preferences, have created instability in the foreign exchange earnings which

have impacted the macroeconomy. In the context of the spatial distribution of economic activity, five of the six districts of Belize

which are reliant on agriculture, face the threat of a regime of freer

trade. This has implications too, for particular ethnic groups whose

livelihoods are dependent on these sectors, given the segmentation of economic participation.

Tourism has been the bright spot in the economic performance of the country. However, this industry is fickle and is highly

responsive to international political factors (such as September 11,

2001) and to the impact of weather. There have been consequential

impacts on fiscal operations, deriving from the volatility in foreign

exchange earnings, which have been exacerbated by exuberance on

the part of the authorities in their efforts in the late 1990s to

stimulate economic activity by an expansion of public investment.

Public debt and public guaranteed debt were almost equal to Gross

Domestic Product (GDP). The potential for crowding out of private sector development, and the forced reduction of public expenditure

by way of correction of the fiscal imbalance, have heightened macro-economic vulnerability, which, in the final analysis, reduces

livelihoods and quality of life of a large number of households.

Natural Hazards and Environmental Risks

There is still debate as to whether the greater intensity and

frequency of hurricanes in the Caribbean are due to global climate

change or to larger weather cycles that repeat themselves over very

long periods. There is general agreement that there has been global

warming, much of it occurring since the 1990s, but there is

disagreement as to whether this has contributed to an increase in




weather events in the Caribbean. Whatever the scientific evidence, Belize experienced four major storms in a three-year period, 2001

2003, the most severe of which was Iris, a category four hurricane

that inflicted considerable damage, requiring the government to

spend heavily on rebuilding of infrastructure. At least one in three

households, in the poorest district of the country, Toledo, suffered

losses. Belize seems destined to suffer buffeting from severe storms

and hurricanes and, at the very least, it should anticipate such an

eventuality.

Another major problem with environmental impact is the use

of chemicals in Belizean agriculture, and the effluent from some of

its agro-processing activity. The seepage of chemicals into water

courses affects the supply of potable water. The spraying of

chemicals in banana-growing areas affects workers resident in the

precincts of banana plantations. There is no effective regulatory

regime for the management of waste, and citrus-processing opera tions have contributed to fish kills. Accountability and the

application of penalties seem to be grey areas.

The major thrust to exploit the tourism industry by expanding facilities for cruise ships has started to create negatives. The influx

of visitors threatens to destroy delicate eco-systems. In the absence

of a close monitoring regime, coral reefs are being destroyed by the

excessive number of visitors to some sites, threatening sustainable

income growth from the tourism sector.

By and large then, Belize has experienced an increase in

natural hazards and in environmental risks over the last five years, based on the evidence at hand. Again, it is at the mercy of sea rise

and storms and hurricane episodes, some of which may be

precipitated by global warming, over which it has no control, and

by environmental hazards that stem from the weak institutional

infrastructure in place to manage such problems as pesticide use in

its agriculture and in the control on visitor use of eco-touristic sites.

Labour Market Risks

The labour market provides the wherewithal for the majority of

households to secure their upkeep. But the labour market functions

in keeping with the dictates of institutional arrangements, both

formal and informal, that influence the demand and supply of labour. There are four areas with specific risks to labour market




operations in Belize that merit attention:

International division of labour and the export sector

Labour-displacing technological change Cross-border migration Ethnie segmentation of the labour market.

Globalization has transformed the nature of the international

division. The surge in exports of garments from China in the first half of 2005 and since the end of the Multi-fibre Agreement has dramatized the impact of competitive wage scales in distributing work across the world. With globalization, Belizean workers are now pitted directly against the workforce of the rest of the world and they may not be the most competitive, relative to the price of labour and their skills and knowledge base. Likewise, an

environment where technological change puts a premium on skills and knowledge will place Belize at a disadvantage in securing or

retaining jobs; as technology leads to the up-skilling of work, and a

decline in the demand for elementary workers, the relative lack of

advance in human resource development puts the Belizean worker at a disadvantage in attracting and keeping higher quality

employment. Cross-border migration has transformed the labour market of

Belize and, as well, its demography. Earlier internal political

problems in neighbouring countries led to an influx of refugees, many of whom have stayed following the pacification of internal

conflicts in Central America. The more recent inflows are economic

migrants, for whom Belize, in spite of its difficulties, offers an

improvement in opportunity and life chances. Guatemala,

Nicaragua and El Salvador continue to be the sources of such

inflows. The incoming migrants provide much of the labour

required by the citrus and banana industries. Native Belizeans are

invariably unavailable to these industries. There is no viable wage in the banana industry that would attract youth from Belize City; their reserve price is much higher than would allow for their

absorption in these subsectors.

The nature of the cross-border inflows has contributed to the ethnic segmentation of the labour market and to geographic concentration of particular groups in different parts of the country. Plantation agriculture is dominated by a Central American work force. The geographic distribution of employment now coincides

with ethnic and other differences across the country. This means




that there is a differential impact on and risks to particular ethnic

groups from trade adjustment when a sector goes into decline, a

factor that has relevance to governance in the country.

Risks to Health

Belize, like the rest of the Caribbean, has experienced a change in

the health risk profile in the last three decades, from communicable

to life-style diseases. The reported cases of certain communicable

and notifiable diseases like malaria and gastro-enteritis have been

trending downward, but there has been the emergence of risks of

newer communicable diseases: HIV/AIDS has had a major impact, with the Belize District responsible for the majority of cases. The

five leading causes of death for males in 2002 were transport accidents, homicides, ischaemic heart diseases, hypertension, and

HIV/AIDS, in that order, while for women, they were hypertension, diabetes, acute respiratory infections, diseases of pulmonary circulation and heart disease. Lifestyle, including diet, is now a

leading cause of illness.

Another important area of risk relates to the services to

children in the first five years of life. In that regard, there might have been some slippage in the level of coverage among children, between 1995 and 2002. Moreover, there is evidence that children in

Toledo and thus, Mayan children in particular, have been exposed to greater health risks.

QUANTIFYING VULNERABILITY

The degree to which vulnerability can be measured varies across

the various risks. Incidence of disease, probability of Category 5

hurricane, and the risk of unemployment are not subject to the same

level of exactitude in the measurement of the vulnerability of the

respective populations. The poverty assessment of 2002 provides some useful data for measuring vulnerability in Belize. The data

provide a good classification of the population by expenditure levels, gender, age, ethnicity, geographic area, housing and social

conditions, education and health status.

The fact of poverty is one index of vulnerability. The surveys

may not be exactly comparable. However, there are social indicators

that derive from both that are indeed comparable, and in any event,




both surveys point to conditions that exist at the respective periods of time. Thus, indigence refers to the same phenomena

? not

having enough to eat to maintain bodily health. The level of poverty seemed to have remained unchanged

between 1995 and 2002 at 33 to 34 percent. There were some

changes among the districts of Belize, but Toledo remained the

poorest by far, with over twice the national average, in terms of the

percentage of poor and indigent households and individuals. The

poverty gap and severity of poverty were also much higher in

Toledo than everywhere else, but the Gini coefficient for Toledo was

much lower than for the rest of the country ? 0.2 versus 0.4 ?

suggesting that the poverty embraced the entire community. About one quarter of children, 5-17 years of age, in the

district of Toledo, were economically active, which was almost four times the national average. Most of these would have been Mayan children, which portends continuing poverty for the area in the

future, and for the Maya, in particular. The Maya population and

Toledo, generally, are trapped in intergenerational poverty. Tables 1, 2 and 3 point to geographic and ethnic factors in

poverty and vulnerability. Between 1995 and 2002, conditions

seemed to have deteriorated most for the Maya, relative to other

groups in the country. While 65.8 percent of the Maya were poor in

1995, 77.0 percent were poor in 2002; to be Maya means that there is an almost eight in ten chance of being poor. Fifty-five percent of the

Maya population was extremely poor or indigent.

Fifty-six percent of the population of Toledo was extremely

poor. Toledo is also the area of the country with the highest concentration of the Maya population. Thus, Toledo and its Maya

population have been the most vulnerable in Belize over the period 1995 to 2002.

Not unexpectedly, there was differential poverty by sector in

which people worked. Table 4 provides some comparative information. Workers in Citrus and in Bananas ? two important

exports subsectors ? were among the poorer in Belize. Nondescript

agriculture and citrus had the highest percentage of poor workers, while Government and Tourism had the lowest percentage of poor workers.

Table 5, which presents findings on the nutritional status of

children less than five years of age, shows the vulnerability in

respect of health. While there were other sections of the population



Table 1: Poverty Estimates, 1995 Orange Belize Stann All

Corozal Walk District Cayo Creek Toledo Belize

Poor Households 203 21.0 18.6 33.5 16.1 47.6 25.3 Poor Population 26.7 24.9 24.5 41.0 26.5 57.6 33.0

Indigent Households 5.9 2.9 4.9 15.9 2.2 40.2 9.0 Indigent Population 8.7 5.0 6.5 19.7 5.1 47.2 13.4

Table 2: Poverty Estimates, 2002 Orange Belize Stann All

Corozal Walk District Cayo Creek Toledo Belize

Poor Households 19.9 23.2 18.4 20.5 25.9 67.3 24.5 Poor Population 26.1 34.9 24.8 27.4 34.8 79.0 33.5

Indigent Households 5.0 4.3 3.7 3.1 4.9 45.0 7.5 Indigent Population 6.2 7.1 4.9 4.8 5.6 56.1 10.8



Table 3: Ethnie Distribution

of Poverty

Percent of Population Percent Poor Percent of Poor Percent of Population Percent Poor 1995 1995 1995 2002 2002

Garifuna 5.1 10.0 1.5 6.9 24.3

East Indian 2.0 39.8 2.5

Creole 27.1 24.8 20.4 25.3 26.5 g

Maya 11.0 65.8 22.0 10.1 77.0 .

Mestizo 47.6

34.7

50.2 53.2 30.1 Other 7.2 14.5 3.4 4.4 27.8 7 All Belize 100.0 33.0 100.0 100.0 33.5 ??

-

zt 6 D 5" CD




Table 4: Percentage of Workers-Poor

Industry Poor

Sugar 30.8

Citrus 47.7

Bananas 34.3

Agriculture nec 57.4

Construction 31.7

Wholesale/retail 20.4

Tourism 15.7

Government 15.5

Social 32.6

Other 19.5

that seemed at risk, children in Toledo, children in rural areas,

Mayan children and children in the lowest quintile generally tended

to be the ones at greatest risk.

Using the poverty line as the marker, and estimating

vulnerability at the poverty level, at 10,15 and 25 percent above the

line, the percentage of the population that is at risk is seen in Table

5.

The data show that over 42 percent of the population was still

using unventilated pit latrines or less, and over 14 percent had un

safe water sources. Other tabulations demonstrate that vulner

ability tends to fall with age and there is little difference in

vulnerability between the sexes on the basis of the data generated from the last Poverty Assessment exercise.

Estimates of changes in vulnerability were derived with the

use of a probit model, with 1.0,1.10,1.15 and 1.25 times the poverty line. Using the partial derivatives of the probit model on the data, and using 1.0, 1.10, 1.15 and 1.25 times the poverty line, as

vulnerable, estimates of changes in vulnerability for persons in

certain categories were derived and are presented in Table 6. There

are a number of interesting results which have implications for

social protection in Belize at the present time.

Firstly, family size and composition impact on vulnerability: a

growth in the number of persons under 14 years of age, in the size

of the household and in the number of dependants increases

vulnerability. This suggests that family planning programmes and

support to the family can enhance social protection; 26 percent of

households in rural areas of Belize consisted of seven or more

persons.



Table 5; Vulnerability at 110,115 and 125 Percent

Indicator of Vulnerability

Percentage of Persons below Poverty Line

Percentage of Persons below 110% Poverty Line

Percentage of Persons below 115% Poverty Line

Percentage

of Persons below 125%

Poverty

Line

Adult equivalent household expenditure (households) 248% Adult equivalent household expenditure (persons) 34.0%

Educational attainment: those not having passed any

examination 42*1%

No. of days missed school in last 4 weeks 0.61

Employed Persons 26,7% Unemployed Persons 9,9%

No. Adult Employed in Household 1.70

Share of Adults employed in Household at or below 0.5 (i.e. one person of

working

age for every two not of

working age) 0.30

Dependency

ratio 49,7%

No Access to Safe water (households) 14.1%

Housing quality: if outer walls of plywood or if using

unventilated

pit latrine or less 42,0%

Average Number of Durables 4.73

Percent with less than four of nine possible durables {phone, TV, video, radio, gas/electric stove, fridge/freezer, washing machine, motor vehicle, sewing machine) households 52.6%

26.8% 36.8% 44.7% 0.61

26.6% 9.8% 170

0.29 49.3%

13.9% 43.4% 4.81

54.4%

28.9% 39.2% 46.3% 0.59 27,0%

9.5% 171

0,30 49.0%

16.1%

46.2% 4,96

55.2%

34.0% 44.3% 51.6% 0.59

27.5% 97% 171 0,30 491%

18.8%

52.9%

5,08 61.5%

co ? " ?f.

m ?r *

*



Table 6: Estimates of the Vulnerability Impact of Selected Characteristics on Individuals at the Poverty Line, and at 1.10,1.15 and 1.25 times the Poverty Line*

Change in Probability of

Individual

Vulnerability at the

Poverty

Line

Change in Change in

Probability of Probability of

Individual Individual at 1.10

Vulnerability at times the Poverty

the Poverty Line Line

Change in

Probability of

Individual

Vulnerability at 1.10 times the Poverty Line

Change in Probability

of

Individual


Change in

Probability of Individual


Change in

Probability of

Individual

Vulnerability

Change in Probability of

Individual

Vulnerability

at 1.25 times the at 1.25 times the

PovertyLine Poverty Line

> ? > m CZ

All Persons

All persons

Aged 14 - 60

All Persons

Aged 14 - 60

All persons

Aged 14 - 60

Older by one year -0.04% Being under 14 years -3.93%

Being Female -2.22% An extra person in the

household 13.99%

Primary Level Schooling or less 15.96% Having an extra durable -19.52% An extra person unemployed 21.91% An extra person employed -0.91%

More dependants per employed adult 4.37%

An extra dependent person 6.58% Being an Own Account Worker -5.27%

Household receives support for children from parents

elsewhere -8.84%

Household receives support from other relatives in Belize 25.80%

Household receives support from friends and relatives

abroad -32.54%

0.10% -11.08% -6.38%

12.51% 22.20%

-19.45%

23.91% 2.99% 6.31% 12.36% -5.30% -6.99%

16.86%

-36.63%

-0.05% -0.38% 0.81% 20.82% 17.01%

-21.42% 17.02% -2.47% 8.13% -5.90% -3.82% 4.44%

11.92% -11.91%

0.22% -8.45% -1.49% 22.14%

28.99% -21.41%

17.79% -0.38% 10.86% -2.88% -2.02% 17.36% 1.56%

-20.80%

-0.07%

3.62% -0.04% 18.55% 18.61% -20.30%

15.41% 0.88% 9.06% -8.48% -7.86%

3.72% 17.74%

-13.60%

0.19% -5.46% -4.15% 19.64% 27.89% -20.34%

16.38% 2.78% 12.24% -3.85% -6.35% 15.82%

8.64% -20.49%

-0.07%

1.12% -3.05%

17.13% 16.26% -21.26% 23.12% 5.17% 8.23% -1.69% 0.12%

14.07%

23.46% -4.02%

0.14% -4.97% -4.99% 17.39% 24.97%

-21.18%

24.82% 6.32% 9.12% 3.60% -0.29% 18.84%

17.68% -9.80%




Secondly, education and, by implication, the level of training contribute to reducing vulnerability of the household and its

members. In the current context of Belize, the successful completion of a secondary programme is critical as the foundation for much of

the employment that the country needs to create. By extension,

programmes of educational and training upgrading for the more

mature members of the population are likely to be important as a

form of social protection.

Thirdly, employment growth is an intervening variable and

impacts on vulnerability. While Belize has had reasonable

employment growth, according to the official data, there is

considerable segmentation of the labour market. With its porous borders, some share of employment growth might have been due to

the absorption of immigrants in low-level occupations and to their

entering into own account work where this is not possible. The

foreign-born are significant among the poor, according to the

poverty assessment data.

On the other hand, own account work, especially at the lower

levels, seems to contribute to a reduction in vulnerability. From this

follows a fourth implication from the results ? the supply of credit

to Small and Medium-sized Enterprises (SMEs) could be highly effective in correcting vulnerability in so far as it opens up oppor

tunity, including those identified by the poor and vulnerable

themselves, that can work to their salvation.

MANAGING RISKS THROUGH SOCIAL PROTECTION

It has been demonstrated in the data above, that, in the best of

circumstances, at least 34.0 percent of the population is in need of

social protection. If resources permitted, the Government would

need to cater for up to 44 percent of the population that are

potentially vulnerable in one way or another. Clearly, social

protection could not be conceived in terms of transfers to such a

large percentage of the population. On the other hand, Belize boasts a range of non-governmental

organization (NGOs), and Community-based organizations (CBOs), in addition to government agencies that are engaged in

formal social protection. Some target particular vulnerable groups. There is nothing to suggest, however, that in their geographic distribution and in their reach, they provide universal coverage to




the vulnerable, nor is there anything in place to push the delivery of

services in that direction. There will be need for radical approaches that treat with the very foundations of the economy if the

vulnerability of almost half of the population of Belize is to be

addressed effectively. The capacity to manage certain risks is now

explored.

Macro-economic Risks

In the final analysis, it is the restructuring of the economy that

would reduce the vulnerability of the population to macro

economic shocks. The recent efforts to prime economic activity by

expansion in Government expenditure has backfired with an

increase in the debt profile of the country and in fiscal imbalances

with revenue shortfalls. Trade and structural adjustment involve a

considerable timeframe with a coherent strategy geared to elicit and

support new economic activity that is capable of measuring up to

international competition. The Government has attempted to enlist the participation of

stakeholders in the agricultural sub-sectors, by creating a forum in

which the problems of bananas, citrus and sugar can be discussed

within the same framework. While this is an important first step, it

is a moot point how efficacious the effort is to date. Stakeholders are

seldom likely to accept the demise of a sector in which they have

operated for years. As experience with sugar elsewhere in the

Caribbean has demonstrated, governments are usually loath to

admit to the need for a country to take exit from a long-established sector. However, protecting the population from macroeconomic

fall-out may require exactly such an initiative.

Belize lacks the institutions for the orderly trade adjustment that would allow producers and workers to accommodate to new

and painful realities. Nor are there the resources that would permit

large numbers in sugar, citrus and banana production to

contemplate transfer to alternative activities.

Labour Market Risks

The main problems in the labour market relate to the high level of

segmentation, the lack of institutions to promote adaptation to

technological change and changes in the nature of the demand for

different types of labour, and the fact of child labour in the economy




of Belize. The labour market consists of large islands of non

competing groups, differentiated in some cases by ethnicity. Creole

workers seldom seek employment in the banana or citrus

industries; they may be unemployed in respect of the public service

and the tourism sector, but are unavailable for export agriculture.

Hispanic migrants are heavily represented among workers in

citrus and bananas and are not covered by industrial agreements. While there is legislation that allows for the compulsory recognition of trade unions by employers, the trade unions have not been

successful to date in organizing agricultural workers; as migrants, most are reluctant to risk any retaliation from employers in joining trade unions. There is also Minimum Wage Legislation, which covers manual and agricultural workers, but the Labour Depart

ment is not well-equipped to ensure universal compliance. Child labour is rampant, especially in the District of Toledo

and among the Maya, among whom it is well institutionalized and

has been the mechanism through which households have coped with income generation. Participation of children in formal

education has a high opportunity cost among the Maya, in the short

to medium terms, but the reverse from the perspective of social

costs.

There is a lack of capacity in the labour market institutions to

correct these problems, with serious implications for the quality of

social protection. More particularly, as the labour market becomes

more directly disciplined by international competition, current

employment activities will come under pressure. There are a few programmes to prepare young people for

labour market entry, but their focus is mainly on youth in the more

urban areas of the country. As important as Youth for the Future is

in stemming the slide into delinquency of youth in such locations as

Belize City, there are few opportunities for correcting the educa

tional deficiencies of Maya youth and young people born of Central

American parents but who are now nationals of Belize.

Nor is there much available to retrain mature workers under

the pressure of trade adjustment and technological displacement. The major programme for micro-enterprise development and for

self-employment administered by the State ? the Small Farmers

and Business Bank ? is not properly articulated with other

agencies, including NGOs that have a better reach to marginal communities, and groups.




Social Risks

Belize spends about seven percent of GDP on social services with

about 35 percent of total revenue allocated to the sector. This

compares well with some of its neighbours. Guatemala spends 1.8

percent, Mexico, 1.1 percent, and Nicaragua, 1.1 percent, respective

ly, on social protection. An important arm of the social protection

machinery is the official charities which receive most of their

funding from the Government. Most are urban-based, but there are

some significant NGOs operating in rural communities that ensure

some reach of state-funded social protection to remote communities in the country, BEST and Help for Progress being two of the more

outstanding of these.

Official social insurance is provided by the Social Security Board which has a standard package of provisions

- sickness,

maternity, retirement, invalidity, and disability. Social Security has

been a high profile area in Belize, partly because the Government

has widened the benefits and increased the quantum under existing

provisions over the last five years.1 In so doing, however, the

Government has created at least one case of inequitable treatment.

All women are entitled to a pension at age 65, whether or not they had participated in the labour force. Eligibility rules exclude men

who might have worked in lower level occupations where

employers escaped their social obligations by not enrolling them

and maintaining contributions to Social Security. The use by the Government of funds of the Social Security in

support of a high profile private venture has called into question the

administration of the programme in the minds of major sections of

the Belizean public and has not contributed to the purposes of good governance nor provided a sense, among some of the vulnerable, that the risks that they face are properly covered. Effective social

security requires social trust to be sustainable.

Natural Hazards and Environmental Risks:

The National Emergency Management Organisation (NEMO) was

established in 2000, and is entrusted with the task of the

1 There has also been a far more negative factor in the profile of the Board. It has been embroiled in the alleged use of funds to support an investment by an

entrepreneur with links to the party in power.




management of disaster and with disaster preparedness. While it

has succeeded in inculcating a greater appreciation of the enormity of the problem that confronts Belize from hurricanes and other

natural episodes, there remains the challenge of divergent cultural attitudes among the population to the specifics of risk and danger. This is demonstrated in stark relief with regard to the application of a building code. The planning authorities have a natural concern

with regard to the upgrading of the building codes consistent with

the risks that the country faces. Across the Caribbean region, there

is now a consensus on the application of the Caribbean Uniform

Building Code (CUBiC). This is likely to be entirely unenforceable

in Toledo and among the Maya whose poverty prevents their

adoption of such building standards. However, they can be quickly re-housed after the passage of a hurricane because of the nature of

their dwellings, with self-help and other cooperative measures

being quickly applied in such situations.

The effective management of risks may have to rely mainly on

the provision of appropriate public shelters to provide protection when a hurricane approaches, with the understanding that after its

passage, structures can be quickly restored for normal accommo

dation. In other words, the application of the building code may be a case of misplaced concreteness.

Among the environmental risks that are not well catered for are degradation of lands in commercial agriculture, fish kills in

areas of citrus production, the destruction of coral on the cays from

unregulated tourism, and the reduction of forests through indiscriminate logging. There is the institutional structure in place for the establishment of protected areas, but limited resources exist

for their management, let alone in the settling of disputes between

the Maya who have traditional rights to some forested areas, and

commercial interests seeking to exploit the forests for logging and

tourism.

There exists a limited number of NGOs that work in the field

of environmental preservation and conservation, which therefore

contributes to the reduction of environmental risks. El Pilar Forest

Garden Network promoted by Help for Progress is a significant

example, which involves traditional Maya practices of forest

gardening and has the added benefit of opening an opportunity to

the Maya to participate in the ecotourism industry.




Risk to Participatory Governance

Local government is still in an incipient stage of development. The

lack of resources and the limited degree of devolution of authority and power limit the extent to which local government agencies can

effect change consistent with the views of the burgesses. There is a

high risk, therefore, of local government agencies remaining under

the dictate of the central government. However, there exists a num

ber of NGOs and CBOs that are not dependent on the government as official charities. They provide a base for independent review of

government action and of advocacy among the people, including at

the local level. The most marginalized ethnic group in Belize is no

longer voiceless; their respective organizations comment on policy and undertake action that prevents the rest of the society from

riding roughshod over their wishes.

MEASURING IMPACT OF SOCIAL PROTECTION

Figures 1 to 6 that follow show a number of impacts on the indigent, the poor, the vulnerable households at 10 percent and the

vulnerable at 25 percent above the poverty line, along with the non

poor and non-vulnerable. Figure I shows that a larger percentage of

Figure 1: Destruction by Vulnerability Status

Home Destroyed Crop Destroyed Livestock Destroyed

I ?hdigert Iftor ?Vul?t2S% ?Non-Fbof ?WVul25% |

the poor, indigent and other vulnerable households lost homes, and

suffered destruction of their crops and livestock in the passage of

Hurricane Iris. The indigent, in particular, and the poor, generally, were more seriously affected by disaster.




Given that the country was struck by three hurricane/storm

episodes in the space of less than two years, groups of indigent and

poorer people in Belize must have experienced considerable

hardship. It is likely that some of the internal migration, especially the influx into Cayo and Belmopan, in particular, that has taken

place more recently, can be attributed directly to this factor.2

On the issue of access to training for Craft Tourism and

Agriculture, Micro-enterprise Training, and to other kinds of

training, as can be seen in Figure 2, a smaller percentage among the

Figure 2: Training received by Vulnerability Status

Training in Graf t Training in Mcro-enterprise Other Training Tourism Agriculture Training

Indigent aPoor Vulat25% Non-Poor NVuI25%]

poor and indigent benefited, than the non-poor and those who had

escaped vulnerability. In other words, the non-poor, and those who

were not vulnerable were more likely to be beneficiaries of

programmes of training in Craft Tourism and in Agriculture than

the poor and the vulnerable. On the other hand, it could be argued that these are the people who would employ the less fortunate as

their businesses grow.

Similarly, smaller percentages from among the indigent and

the poor households benefited from land distribution programmes, and agricultural loans, than was the case among the non-poor and

non-vulnerable. This can be seen in Figure 3.

2 The large influx of Maya prompted the Mayor of Belmopan to suggest, on an

occasion in 2004, that Maya, who had migrated to and settled in squatter communities in Belmopan, should be forcibly removed. This raised the ire of a

Q'eqchi' Organisation and sparked some discussion in the public media.




Figure 3

However, in respect of employment generation programmes, the percentage of the indigent and poor households benefiting was

above those who were vulnerable at 10 and 25 percent above the

poverty line. On the other hand, the non-poor and the non

vulnerable at over 25 percent of the poverty line seemed to benefit in equal measure as the indigent and the poor.

Figure 4 focuses on the issue of transfers more directly. The

indigent households were less likely to receive support than the

poor and vulnerable at 10 and 25 percent above the poverty line, from parents, siblings, and friends and relatives living elsewhere in

Figure 4: Support by Source Vulnerability Status




Belize. Interestingly, a higher percentage of the non-poor and the

non-vulnerable at over 25 percent above the poverty line, seemed to

have relatives abroad who could send remittances. This suggests that the poorer the household, the more limited the possibilities for

migration of members and relatives, and thus the lower the

probability of deriving remittance income from abroad.

On the other hand, there was less of a difference in respect of

support from relatives in Belize between the poor and vulnerable

households on the one hand, and the non-poor and non-vulnerable

at 25 percent above the poverty line. This hints at the high level of internal migration that has taken place, especially among the Maya and other communities based in the southern part of the country.3

As is demonstrated in Figure 5, a slightly larger percentage among the poor, indigent and vulnerable households benefited

from Social Welfare Receipts than among the non-poor and non

vulnerable. On the other hand, a larger percentage among the non

poor and non-vulnerable benefited from Social Security Receipts and Pensions than among the indigent, poor and otherwise

vulnerable. In the major programmes of public transfers ? Social

Welfare Receipts ? there was no evidence to suggest any move

ment to universal coverage of the indigent and poor. Pensions were

Figure 5

fl > -^?L^ AhhImI ftaniirii EWaa^^? **-1

tangent aPoor eVulaMO% Vii at 25% Non-Poor

3 The Maya and migrants from Central America tend to target the District of Cayo as the main destination. There are communities in Belmopan named after

locations in Central America, for example, Salvapan.




the area in which there was the widest coverage of the indigent and

the poor.

Figure 6 displays differences in coping strategies between

poor and non-poor households. The poor households are less likely to depend on prayers, to dip into savings, borrow or pawn and to

seek the help of relatives abroad, but were more likely to hustle, seek the help of politicians, stop paying bills and engage in illegal activities.

Figure 6: Type of coping strategies implemented and Poverty Status Source: 2002 LSMS

Pray Hustle Dip?nto Borrow Pawn Ask relative Seek Stop ?egei saving* abroad politicians children activities

help school

% Total % Poor % Non-Poor

While the evidence is still limited, it is well recognised that

some of the gang-related violence and crime in Belize City is linked

to the trade in narcotics. Not only is Belize a trans-shipment base, it

is also a market on its own, albeit small. There is a large group of

disaffected youth in Belize City, largely the children of Creole

parents who sought to improve their economic condition by

emigration to the US. Their children, left in the charge of their own

parents and other relatives, have been socialized on the streets of

Belize City.4

4 The gangs of New York, Los Angeles and San Fransisco provide models for those

in Belize City and firsthand information, skills and technology are shared by

deportees returned from the United States. The trade in narcotics creates a link

between the underworld in Belize City and that of cities in the United States.




ENHANCING SOCIAL PROTECTION

The economy of Belize is in a transitional mode as the country

adjusts to the impact of globalization which has brought the

removal of trade preferences that it has enjoyed for most of its

visible exports. Limited diversification of its export base and high indebtedness impose the need for austerity in the face of a decline

in competitiveness in some key sectors. There is a potential risk to

large sections of the population (over one-third) that are poor and

vulnerable, based on any assessment.

In its recent study of the Caribbean Region, the World Bank

has identified the challenge faced by Caribbean countries, and

among the five critical measures recommended are the reduction of

the dependence on preferential trade arrangements and the

aggressive development of the human resources of the region.

Altogether, the measures involve a drastic reorganization of the

economy.

There is a considerable elapsed time involved in the

restructuring of an economy, and in bringing the fruits of growth to

the mass of the population. Some of the more developed countries

have accepted the need for the institutions for trade adjustment to

afford them the orderly exit from sunset industries, while their

firms seek entree into sunrise industries. In the United States, there

has been legislation dating back to the 1970s to treat with trade

adjustment problems and institutional mechanisms have been put in place to manage the transition. Institutions for trade adjustment are, at best, incipient in the Caribbean, and Belize is no exception.

In the final analysis, social protection has to be managed in the

context of macroeconomic stabilization and the transformation of

the economy of Belize, and has to measure up to the demands of

non-marginal change in the economy and society. At the same time, there is need for recognition of the reality of climate change that has

increased the risk of disaster to the population of Belize, as well as

the HIV/AIDS Pandemic which has hurt the Caribbean very

severely, making it the area with the highest incidence after Africa, south of the Sahara. The task of social protection is to craft measures

and strategies that allow for a coherent approach to the manage ment of disparate risk and vulnerability among the population.

The following are some of the measures that follow from the

analysis conducted above, in an attempt to improve the capacity of

the country to provide social protection to the poor and vulnerable.




Community Focus in Interventions

The plural character of the country and the geographic distribution

of its population make it imperative that interventions be

conducted at the community level. The assessment of vulnerability and of poverty is normally computed for individuals and

households. However, the life chances of many households and

individuals in Belize are dictated fundamentally by village organization and community action. There is differential

interpretation on the part of the respective groups of risks and

opportunity.

This is particularly the case among the Maya in Toledo. It is not unknown for an entire village to relocate on the basis of

decisions of the elders. The cane farmers of the north of Belize need to act in concert in any reorganization of the industry and in its

downsizing, if necessary, and the measures they adopt will impact on the districts of Corozal and Orange Walk where the majority of

the population is Mestizo. Generally, then, there will be need to

recognize community organization, in any thrust, at the reduction of vulnerability.

Coordinated approaches among Agencies

While at the level of the Government there has emerged consi derable coordination in terms of perspective planning, this has not been mirrored in on-the-ground coordination. Any coordination

among the NGOs and CBOs at the local level is largely informal, or,

by agreement, not to get in the way of each other. There is need to

institutionalize coordination at the local level to improve the

delivery of services of the social protection machinery, however, it is

configured, whether through state agencies or through NGOs and

CBOs, supported with resources from the Government as official

charities. The use of geographic information systems should assist in improving equity and efficiency in social protection initiatives.

Equity There is a requirement on any system of social protection that un

equals be treated equitably. There is evidence in Belize that the resources for social protection are inadequate, and moreover, that some of the not-so-vulnerable can access benefits. The provision of




school books and school meals is not attended by any strict rules for

targeting the most deserving. Given the plural nature of the society,

equity is essential in the application of social protection measures.

Indeed, equity is an element of efficiency in such societies, and

serious departure from the equity principle may create conse

quences of immense social and political significance. In that regard, the needs of particular groups at risk have to be

addressed. These include:

Children engaged in labour: incentives to encourage attendance at school and at health clinics may have to be

instituted

Children at risk of abuse and abandonment from

dislocation to the family in the face of rapid social change Women at risk of abuse or abandonment

The elderly at risk, and vulnerable with the decline of

traditional values relating to their protection Victims of HIV/AIDS

? the supply of retroviral drugs and

the screening of expectant mothers to prevent mother-to

child transmission should receive high priority. In the final analysis, the first step in ensuring that social

protection is sensitive to equity principles is to address the needs of

those under the poverty line.

Trade Adjustment Social Protection

The transition from one type of economic activity to another takes

time to be accomplished, and imposes social and private costs. An

important component of trade adjustment social protection involves government-supported training and upgrading pro

grammes. It applies to individuals and households, but also to

communities where the collapse of an industry means the demise of

whole communities.

The decision on the part of the European Union, announced in

June 2005, to abide by the ruling of WTO and to eliminate its

subsidy programme for sugar affects not only beet farmers in

Europe but a number of ACP countries, among which is Belize. The

decline in sugar has already impacted severely on the districts of

Corozal and Orange Walk.5 The task of managing the trade

5 A recent newspaper report in Amandala, June 16, 2005, refers to the death of a

four-year-old child in Santa Martha in Orange Walk District. A commentator

attributes the lay-off of many workers by the Belize Sugar Industry for the spread




adjustment and preparing large sections of the population for a

transition to new economic activity is made more difficult by the

fact that some of the affected include new Belizeans and their

children, who are still assimilating to life in a new country. The institutions for trade adjustment exist, at best, in embryo

and are dwarfed by the challenge of disparate clients, comprising: The large number who left the educational system with

deficiencies that need to be corrected for their effective

participation in the 21st century Cane farmers and workers in the sugar industry in northern

Belize, mainly mestizo in ethnicity Guatemalan workers no longer needed in citrus but who

are new Belizean citizens

Garifuna and Creole workers who need to be upgraded for

different kinds of employment in urban Belize

Ex-subsistence farmers and cultivators from among the

Maya in Toledo who have joined the more urban areas of

Cayo.

There is need for a considerable investment on the part of the

state in trade adjustment social protection. Important institutions in

the programme of trade adjustment are agencies involved in adult

education and training, and those engaged in the supply of credit

for SMEs.

Engendering Attitudinal Shifts

There is need to engender attitudinal shifts through public education to improve the capacity of the citizen to manage

emerging economic and social change, such that there develops a

psychological commitment on the part of the beneficiaries to equip themselves for a new dispensation. While this may not be seen as

formal social protection, it is imperative to afford the population of

a small open economy the wherewithal to adjust to the require ments of world trade. There will be need to adopt a marketing

approach, to get citizens to recognise their own responsibilities in

self-upgrading and preparing for a changing and ever competitive environment.

of poverty across the district and points to its outward visible evidence in

malnutrition among children and their attendance at schools with 'hungry

stomachs'.




International Assistance

Belize deserves assistance from international society. It provided a

safe haven for large numbers fleeing political disorder and

persecution during the internal conflicts in the neighbouring countries of Central America. Global climate change exposes it to

risks that are not of its own making. The restructuring of sugar, citrus, and banana industries at one and the same time will place a

heavy toll on employment and incomes in Belize. Social protection in Belize requires a framework that is flexible and resilient in

managing the rapid social and economic changes in the offing as its limited range of sectors face the impact of globalization. It is ill

equipped in terms of the institutional structures.

The assistance of the international community is vital to the

development of the transitional arrangements that have to be put in

place to forestall social dislocation in the society. This may take the

form of:

Technical assistance to institutionalize various components of trade adjustment Financial assistance in support of trade adjustment for a

period of at least three years to support: The retraining of workers subject to loss of employment

especially in the banana, sugar and citrus industries; The provision of funds for revolving credit to farmers

seeking to diversify agricultural production; The provision of funds for revolving credit to SMES.

Funding of a programme, over three years, to ensure

regularity in school attendance and to eliminate child

labour, modeled along the lines of Progresa in Mexico or

the Programme for Advancement through Health and

Education (PATH) in Jamaica. The international community can contribute immensely to the

efforts of the Government of Belize and its domestic partners in

improving the lot of the population and in facing major economic

and social change.

CONCLUSION

The primary objective of social protection in Belize remains the

empowerment of the poorer sections of its plural society to engage in productive and competitive activity, while protecting them and




the country against the risk of macroeconomic instability, the

travails of trade adjustment, structural transformation, and natural

disasters, as well as the fallout effects of rapid social and economic

change. The Government of Belize will be hard-pressed to increase

its expenditure on social protection, in the face of a major fiscal

crisis, when the thrust of fiscal policy is on reducing recurrent and

other expenditures. In the short term, it is necessary to ensure that

all social protection expenditure is directed at the most vulnerable

in the society. Moreover, to the extent possible, such expenditure must give priority to assisting the vulnerable to transform their

circumstances.

Initiatives, heretofore, have been undertaken largely to

provide transfer payments and by way of palliatives in what might have been deemed temporary dislocation and, thus, adjustment to

a rainy day. Belize faces a rainy age, and its social protection

machinery has to be anchored in its developmental strategy in

recognition of the painful transition which the people of Belize face

in the short to medium terms.

References

Alesina, A., and D. Rodrik (1994). "Distributive Politics and Economic

Growth," Quarterly Journal of Economics, Vol. 109, No. 2, pp 465-90.

Ravallion, Martin (2005). "On Measuring Aggregate "Social Efficiency," Economic Development and Cultural Change, Vol. 53, No.2.

Henry, Ralph, (2004). Final Report: Social Protection and Poverty Reduction in the Caribbean ? Belize'. The other sponsors of the study were the

European Union, and the Department for International Development

(DFID).

Third Assessment Report of the Intergovernmental Panel on Climate

Change, Climate Change 2001, in http://www.grida.no/climate/ ipcc tar/ http://www.adb.org/Dicuments/Policies/Social Protection/

sociallOO.asp

World Bank, (April, 2005). Time to Choose, Report No. 31725 - LAC,

http : //wblnOO 18. wor ldb ank. or g/L AC/lacinf oclient .nsf



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