REPORT #216 April 2000

Produced by the Belize Development Trust

In reponse to the cry for bullets and guns to change Belizean government, from students of the University of Belize system! You guys sound like our current Prime Minister Said Musa in his youth and his buddy Shoman, now an Ambassador or something overseas.

'Belizean Economic Studies are rife with incomprehension of the real world.'
Don't mix up economic theories with the real world. Belize is full of local investors. They are mostly small, 98% of them. Look for the reasons why they are small?

In your area, tradition says land is communal. But investment requires ownership of property(land). How can you protect your buildings, machinery, etc., from thieves if you cannot charge them with trespassing? Communal land ownership systems only work with communal, credit union, or cooperative systems. These take leadership. Why would anyone take all the strain, and pain, if they don't get more for their effort? Hence, why bother? Your traditions hold back investment on a local scale. Even so group village businesses could be made. Tilapia fish farming is one suggestion.

Also consider you have no District government, and no guaranteed slice of the pie, of national revenue to disburse locally according to local priorities. There is no GRANT system of funding from National Revenues in Belize to District, Town and Village governments. Without this you are at the mercy of the port town cliques of pseudo intellectuals who want to dictate to you what you should do in your area, according to their far away ideas and academic nonsense. Absentee, paternalistic, patronage government never works well. It is always mediocre at the best and at it's worst creates civil war and corruption on large scales.

Likewise, the predatory state government of empire building we use, leaves any investor, local or foreign at the mercy of the latest "rulers" which are nearly always from the port town. In the USA where you have been, the democracy is built on law. You can prosecute the President of the USA. In Belize, fat chance you would have prosecuting any cabinet minister and the laws you are investing by are changeable at his, or her whim. Why invest big time? ( Minister's discretion, or Cabinet discretion).

Look at the causes. There are plenty of investors, both local and foreign wanting to invest in Belize, but if you are at a five year cycle of political party changeover when the rules and laws get changed, why bother? This just introduces you to the subject of how government and it's political organization effects the economic results.

In Ecuador, the recent bank crash was started by the government. The banks had been ripping off, with political connivance the country reserves through various misdeeds. But the show could have continued even so. But the government passed a 1% tax on withdrawals from a bank. There was a rush to take out money and stick it under the mattress, or in a tin can in a hole in the ground. The banks didn't have the money, and like our own Reserve Bank, or whatever they call it( I forget), lax oversight of the banks involved. Bit like our cooperatives, when one got in trouble a year or two back, it turned out the Director of Cooperatives wasn't even doing his job, he had been bored and just riding around, collecting a salary. The 1% tax was to appease the IMF loan enforcers in Ecuador, when the borrowing of future oil earnings did not show due to dropping prices. Now the country went bankrupt, guess what? The oil prices are now back up. There are investors with more money than Ecuador who can manipulate markets. They make a run on it, by selling short the local currency and buying it back cheaper. Fortunes were made on Ecuador's currency. It was running around 3000 to the dollar and ended up at 25,000 to the dollar. You figure if you sold it short, how much money you could have made in 18 months? That is 800% in profit in 1 1/2 years for somebody.

There is plenty of investment for Belize, both from locals and foreigners, but as long as you have elected dictatorship, patronage style government, you will never realize it. LOOK FOR THE CAUSES WHY PEOPLE REFUSE TO INVEST MORE IN BELIZE! Ask somebody, find out why they will stay as they are, small and inconspicuous. Find out why a foreign investor will check out Belize and then decide against it? There is more to economics as taught in the University of Belize system. That stuff is academic. Economics is about profit. You take away the profit, whether it be in cash, or tax breaks, or some other way, you eliminate the investment.

As an economics student you need to identify the causes in the real world and then change them. In Belize, this has already been done and identified as the way we govern ourselves in a plantation model of governing. Start a political party and promise change in the way we govern, there are more than 50% of the population willing to vote for you.

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