REPORT #348 July 2000

Produced by the Belize Development Trust

Recent articles on the Belize Culture List and in the general media on the Rise and Fall of the Corozal Free Trade Zone might leave one in government in Belize, with a wrong impression and idea of the purposes of a Free Trade Zone.

The Corozal Free Trade Zone was a correct idea, misapplied by those intellectuals in government from the port town working as bureaucrats and politicians, self appointed leaders in Belmopan. They took a good working idea that has been successful around the world and simply misapplied it in Belize based on their own limitations. One shouldn't thus discard for the future, the use of one or two more Free Trade Zones in the country of Belize.

This experience has been a useful one, wasteful, but useful. The biggest problem with the original establishment of the Corozal Free Trade Zone, was it was designed to be convenient to Belmopan and Belize City bureaucrats and politicians. They had some vague ideas of what, I do not know?

The town of Chetumal was a sleepy little backwater Mexican town the size of Orange Walk about 27 years ago. And only about the same size. Then the government of Mexico made the State of Quintana Roo a FREE TRADE ZONE. We saw the subsequent development of Chetumal and the rise in immigration from other parts of Mexico. A destitute poor State of Mexico was transformed and supplies now a much larger portion of taxes than it did several decades ago.

The same can be said of the Islands of San Andres and Providencia of Colombia, a hundred and fifty miles East of Nicaragua and several hundreds of miles north of the Colombian coast. It was made a Free Trade Zone in 1957. There is now a population of 80,000 people and a thriving tourist industry, with more big airplanes per day, than we get at our own Belizean International Airport.

Essentially, to apply the concept of a Free Trade Zone, you want a part of your country that is undeveloped, contributes little to the general tax base and is of low population. The idea of the FREE TRADE ZONE is to encourage immigration from other parts of the country to that scarcely populated area and give it a boost in economic activity, which in turn will turn it from a drain on the government tax treasury and become a net contributor, or self supporting.

In Belize, we pointed this out more than a dozen years ago, but those that implemented the Corozal Free Trade Zone took the basic idea, and ignored the fundamental economic theories that underly the use of such ideas.

In Belize, we should legislate that the Toledo District become a FREE TRADE ZONE. A Customs post would be built on the Southern Highway at the border of the Stann Creek District, another Customs officer established at the Punta Gorda airport and one for the dock at the port. Legislate that the Toledo District would be a FREE TRADE ZONE for 25 years and also that any Belizeans that enter the Toledo District and stay for 72 hours, can import back into Belize as part of their personal carrying baggage, up to $400 USA in duty free goods. A card would be issued at all the check points, entering and leaving the rest of Belize. This to establish the length of stay in the ZONE of the Toledo District.

What would happen is a boost in economic activity in the Toledo District. The government would find itself forced to plan and build much larger electrical generating capacity, build more roads and streets, more schools, larger airport, bigger dock and protecting basin, to satisfy the ensuing growth and economic activity becoming established in the Toledo District. Just study Chetumal and the State of Quintana Roo, also the Island of San Andres and Providencia for examples.

A FREE TRADE ZONE is used to distribute population and make a debit scarcely populated area of a country, into a self supporting district, or state, and hopefully a contributing tax source for general funds. The length of time under such things is roughly 25 years.

The RISE AND FALL OF THE COROZAL FREE TRADE ZONE should NOT be taken as a lesson on Free Trade Zones. It is nothing more than an example of mismanagement by intellectuals working in national government from the Port Town. They took a good idea and spoiled it!

Back to Main Belize Development Trust Page

Maintained by Ray Auxillou, Silvia Pinzon, MLS, and Marty Casado. Please email with suggestions or additions for this Electronic Library of Belize.