Foreign Direct Investment In Belize

1
Foreign Direct Investment In Belize

• Presented by Karima A. Morris

2
Introduction

• 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

3
Belizes Major Socio Economic Statistics
2003 2004 2005
Unemployment Rate () 12.9 11.6 11
Inflation Rate() 2.6 3.1 3.7
GDP Growth Rate () 9.2 4.6 3.1
Gross Imports (BZ million) 1,104.2 1,028.2 1.185.8
Domestic Imports (BZ millions) 381.4 410.1 413.3
Mid Year Population (thousand) 273.7 282.6 291.8

• Statistics collected from www.cso.gov.bz

4
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
  Bz6,000.
• By 2002, the population below the poverty line
  was 33.5.
• Almost two-thirds of the working population
  earned between Bz3,000 and Bz9,000, while 20
  percent earned less than Bz3,000(www.country-stud
  ies.com).

5
Belize A Multiethnic and Multicultural Society
6
Investment Sectors

• Tourism
• Agriculture
• International Financial Services
• Furniture Manufacturing

7
FDI by Sector 2004

• Graph collected from Beltraide,
  belizeinvest.org.bz

8
Tourism

• Belize tourism industry is the primary industry
  that has demonstrated the most success, mainly
  because of its diverse and high quality
  attractions.
• Belizes success in tourism is due in part to
  special branches of tourism eco, adventure,
  cultural, and archeological tourism.

9
Agricultural Industry

• The agricultural industry which consists of
  citrus, citrus production, bananas, sugar, and
  beans, provides 71 of the countrys foreign
  exchange earnings.
• Maries Sharps Belize's recognized exporter of
  hot pepper sauce
• Green and Blacks is a foreign investment company
  based in Belize, and is a top notch specialty
  food manufacturer

10
Aqua cultural 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

11
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.

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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.

13
Furniture Manufacturing

• Belize attracts many foreign investors from
  Malaysia, the U.S., and Britain, who invest in
  the countrys forestry industry. Investors come
  to Belize to benefit from countrys 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.

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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.

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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 countrys only telecommunication company.
• A south African investment group controls 60 of
  Belizes only water service company.

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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.

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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.