Foreign Direct Investment In Belize Presented by: Karima A. Morris
Belize is located in Central America, to the south of Mexico and to the north and west of Guatemala Belize is the only Latin American country where English is the official language Belize has a bilateral relationship (both Central American and Caribbean) because of its strategic geographical location Introduction
Statistics collected from www.cso.gov.bz Belize’s Major Socio Economic Statistics
Standard of Living • Differences in quality of life reflects and shaped patterns of social inequality in Belize. • Access to food, housing, health care, and other necessary or desired goods and services varied most markedly between rural and urban areas, as well as by socioeconomic status. • In 1984 the average salary of an employee was Bz$6,000. • By 2002, the population below the poverty line was 33.5%. • Almost two-thirds of the working population earned between Bz$3,000 and Bz$9,000, while 20 percent earned less than Bz$3,000(www.country-studies.com).
Investment Sectors • Tourism • Agriculture • International Financial Services • Furniture Manufacturing
FDI by Sector 2004 • Graph collected from Beltraide, belizeinvest.org.bz
Tourism • Belize tourism industry is the primary industry that has demonstrated the most success, mainly because of its diverse and high quality attractions. • Belize’s success in tourism is due in part to special branches of tourism: eco, adventure, cultural, and archeological tourism.
The agricultural industry which consists of citrus, citrus production, bananas, sugar, and beans, provides 71% of the country’s foreign exchange earnings. Maries Sharp’s – Belize's recognized exporter of hot pepper sauce Green and Black’s is a foreign investment company based in Belize, and is a top notch specialty food manufacturer Agricultural Industry
The majority of investments in Belize aquaculture is in shrimp farming. Bluecadia is a U.S. aqua cultural company that specializes in shrimp farming Aqua cultural Industry
International Financial Services Offshore Banking • Offshore banking was introduced in the Caribbean by the British. It offers millionaires and international business investors to set up business accounts away from their parent countries so that they can conduct business transactions globally. For American investors, this offers them a safe zone where their money is not taxed by the Federal government. • In Belize, the largest offshore banking company is called Providential Trust Bank. • Offshore banking offers IBC - International Business Company, which is an account where the money is managed by offshore banks in Belize and the Cayman Islands . Billions of dollars are transacted on a daily basis through these banks. This is the main service provided by offshore banking. • Money Transfer is a form of banking that brings into Belize a large amount of foreign exchange. Western Union, a huge banking conglomerate, provided money transfer services to Belizeans abroad, and started operations in Belize in 1993. • There are about 100 thousand Belizeans in the US, almost half the population of Belize. Belizean - Americans send home about $60million in remittances each year, which is a chief sou0 ce of foreign exchange.
Attracting Investors • In order to attract more foreign investors such as Chinese and Taiwanese entrepreneurs , Belize has an economic citizenship program where foreign investors are given instant Belizean Citizenship through the purchase of a Belizean passports costing (U.S.)40,000 dollars.
Furniture Manufacturing • Belize attracts many foreign investors from Malaysia, the U.S., and Britain, who invest in the country’s forestry industry. Investors come to Belize to benefit from country’s large forest reserves, to cut wood through huge logging concessions offered by the Belizean government. • Pharmaceutical companies also come to extract medicine from plants in the rainforest of Belize. • Belize has one of the few remaining rainforests in the world, and there are limitations on how much resources companies can take from the rainforest.
Oil! • In 2005, Belize found oil was found in the Western District of Cayo, in Belize. • A company from Ireland was the first to drill and find oil in Belize. The company exports about 1000 barrels a day. • This new investment sector has lead to more revenue for the Belizean government. • The government gets 60% of all oil revenues with additional taxes it levied on the oil reserves.
Other Investments • Belize has privatized its water, electricity, and telecommunication services. • The Canadians own 80% of the shares of the only electricity company. The British multinational Michael Ashcroft owns about 75% of the shares in the country’s only telecommunication company. • A south African investment group controls 60% of Belize’s only water service company.
Effects of Foreign Investment • Foreign Investment has both good and bad impacts on Belize. • Good • Foreign investment has created jobs for local Belizeans • Foreign investment has also helped developed the country. • Bad • One negative effect that foreign investment has had on Belize is capital flight - where most of the money made by foreign investors leaves the Belize economy to foreign banks abroad. Very little is invested back into the country and its people. • Parasitic Wages - where the people of Belize are not paid affordable wages.
References • www.belizeinvest.org.bz. Beltraide. 2005 • www.country-studies.com. Belize Country Studies. • www.cso.gov.bz. Central Statistical Office-Belize. Belize Central Statistical Office. 2003.