SIB reports on Belize’s economic performance in Dec. 2019, and Jan.-Dec. 2019
SIB (Statistical Institute of Belize) data for imports for December 2019 show that Belize imported $162.5 million worth of goods for the month, 6.4% or $9.7 million more than the $152.8 million worth of goods we imported in December of 2018.
The most significant growth in imports was of “Manufactured Goods”, which increased 40%, from $17.3 million in December 2018 to $24.2 million in December 2019, because of more imports of metal structures and galvanized steel coils.
Imports of “‘Machinery and Transport Equipment’ grew from $27.5 million to $32.1 million, as a result of greater purchases of water pumps, portable agricultural sprayers and conveyor belts; goods destined for the ‘Commercial Free Zones’ went up from $26.8 million in December 2018 to $29.7 million in December 2019, due to bigger imports of cigarettes and clothing; boosted imports of rice seeds, infant formulas and soybean meal led to an increase in the ‘Food and Live Animals’ category, from $17.6 million to $19.9 million; the ‘Beverages and Tobacco’ category, with heightened imports of beer, hard liquor and cigarettes grew from $3.6 million to $4.9 million; and larger purchases of medicines, fertilizers and vaccines led to the ‘Chemical Products’ going up by $1.1 million, from $12.3 million to $13.4 million.”
The amount of money spent to import items in the ‘Mineral Fuels and Lubricants’ category decreased “by more than $6 million, from $27.4 to $21.3 million, mainly on account of smaller imports of diesel fuel; imports for the ‘Designated Processing Areas’ went down from almost $3 million to $1.4 million, due to reduced purchases of various types of containers and video game consoles, while diminished imports of fruit and vegetable seeds and used clothing, led to a decline in the ‘Crude Materials’ category, from $3.4 million to $2.3 million.”
Belize imported $1.97 billion worth of goods in 2019. “‘Manufactured Goods’ recorded the largest growth, with an increase of over $23 million, from $244.4 million in 2018 to $267.5 million in 2019, due to greater imports of metal structures, gas tanks and tires; ‘Mineral Fuels and Lubricants’ increased from $282.9 million in 2018 to $295.1 million in 2019, as the country imported larger quantities of diesel and regular fuels, as well as kerosene and bunker C fuels in 2019.
There was a rise in food imports, the “‘Food and Live Animals’ category increasing from $219.7 million to $230.2 million because of greater imports of lard (shortening), milk and cream, and margarine; the ‘Machinery and Transport Equipment’ category went up from $390.9 million in 2018 to $397.6 million in 2019, as the country saw higher purchases of vehicles, computers and dielectric transformers; the ‘Crude Materials’ category saw larger imports of treated pine lumber, fruit seeds and calcium sulphates and went from $30.1 million to $36.7 million; goods meant for the ‘Commercial Free Zones’ went up from $324 million in 2018 to $329.9 million in 2019, because of bigger purchases of men’s clothing and sweaters .
“Increased imports of cooking oils, such as soybean oils, pushed the ‘Oils and Fats’ category, from $16.8 million to $19.6 million, and boosted imports of alcoholic beverages and supplemental nutrition drinks led to a growth in the ‘Beverages and Tobacco’ category, from $37.9 million in 2018 to almost $40 million in 2019.
“There was a decrease in imports in some categories, ‘Designated Processing Areas’ falling from $38.8 million in 2018 to $31.9 million in 2019, due to decreased purchases of parts for food processing machinery, filtering equipment and fruit concentrates, while lowered imports of surveying equipment, lamps and lighting fixtures caused the ‘Other Manufactures’ category to decline from $150.9 million to $144.6 million.”Domestic exports in December 2019 up 18.9% over December exports for 2018
Belize exported $25.9 million worth of goods in December 2019, $4.1 million more than the $21.8 million recorded for December of 2018. The big jump is credited to crude petroleum, with exports of that commodity valuing $7.4 million in December 2019. Belize exported no crude petroleum in December last year.
“Exports of sugar increased by $0.8 million, from $1.3 million in December 2018 to $2.1 million in December 2019, and marine exports, with improved sales of shrimp, went up by $0.3 million, from $4.9 million to $5.2 million.
“Earnings from bananas dropped from $7.3 million in December 2018 to $5.1 million in December 2019, while sales of citrus products diminished from $3.4 million to $2.6 million, owing to decreased exports of both orange and grapefruit concentrate.”Total merchandize exports for 2019 was $411.8 million, up 4.6 percent
Belize’s total merchandize exports for 2019 went up $17.9 million over 2018, from $393.9 million to $411.8 million. Sugar was Belize’s top earner again, increasing significantly from $112.8 million in 2018 to $136.4 million in 2019, and “marine exports went up from $42.4 million to $48.8 million, due to improved sales of lobster tails and conch, while earnings from bananas grew from $74.3 million to $77.4 million during the year.”
“Earnings from molasses rose from $6.3 million in 2018 to $10.1 million in 2019; revenues from red kidney beans went up by one-third, from $9.4 million to $12.6 million; and exports of black-eyed peas grew from $4.2 million in 2018 to $5.5 million in 2019.
“Citrus exports dropped by more than $17 million, from $73.7 million in 2018 to $56.3 million in 2019; despite a 5.6 percent increase in exported quantities of crude petroleum, earnings from that commodity fell from $24.6 million to $20.3 million, as a result of diminished world market prices; and sales of animal feed dropped by almost one-fourth, from just above $15 million to $11.4 million, during the year.”
-condensed from the SIB report-Amandala
=============================Falling merchandise exports, increasing dependence on services
It’s not the prettiest picture that’s seen when we take a first glance at the latest data from the Statistical Institute of Belize (SIB) on our exports and imports for 2019. The SIB says that between January and December 2019 we exported $411.8 million worth of goods, and we imported $1.97 billion worth of goods. In terms of dollars, goods we imported exceeded goods we exported by $1.56 billion, and expressed as a fraction, our imports exceeded goods we exported by almost five times.
The picture is not as bleak as it looks at first glance. A sizable chunk of our imports are destined for the Commercial Free Zones, so our import bill is not as large as we see in the report. The SIB says that the cost of goods imported into the free zones went up from $324 million in 2018 to $329.9 million in 2019.
The disparity between our exports and imports is large — year in, year out. The SIB files show that our gross imports for 2012 was $1.68 billion and the value of our major domestic exports for that year was $678.6 million, and in the subsequent years the figures were as follows: 2013: imports $1.81 billion, exports $668.3 million; 2014: imports $1.92 billion, exports $614.4 million; 2015: imports $1.99 billion, exports $536.6 million; 2016: imports $1.9 billion, exports $401.93 million; 2017: imports $1.8 billion, exports $445.6 million; 2018: imports $1.9 billion, exports $393.9 million; and 2019: imports $1.97 billion, and exports $411.8 million.
As we see here, our merchandize exports are doing poorly. If we compare our exports for 2019 with exports for 2012, our output has fallen by $266.8 million, about 40%.
World Integrated Trade Solution (WITS), at the website wits.worldbank.org, shows the countries we imported the most goods from in 2018. We imported $814 million worth of goods from the USA, $230 million from China, $206 million from Mexico, $142 million from Guatemala, and $60 million worth of goods from Panama.
On the export side, WITS says the top five countries that bought our goods are the USA ($150 million), the UK ($144 million), Jamaica ($30 million), Ireland ($26 million), and Barbados ($20 million).
Belize, like all other countries, buys goods and services from abroad, and sells goods and services to pay for what it imports. Every year we run a trade deficit, and the amount is added on to what we owed before, so our international debt keeps growing.
A lot of countries around the world run trade deficits, some big ones too. The mighty United States has been racking up trade deficits for a number of years with China, and now they are extremely worried about their huge debt, which they say has come about because China keeps violating global trade rules.
If we depended only on the export of goods, our annual trade deficit would be huge, but we do have other sources of earnings to narrow the gap.
Belize, like the great USA, borrows to pay for some of the goods we import. Belize also gets remittances from abroad. Trading Economics at the website tradingeconomics.com, says, ”Belize averaged 63.95 USD million (in remittances) from 2001 until 2018, reaching an all-time high of 90.20 USD million in 2018 and a record low of 24.30 USD million in 2002.”
The service industries contribute the most foreign earnings to pay for our imports. Call centers (Business Process Outsourcing (BPO)) not only help provide jobs for Belizeans, but the services they sell also bring in needed cash from abroad. Call centers appear vulnerable because of machine learning; the voice assistants, like Alexa and Cortana, could possibly substitute for human beings on the phone lines in the not-too-distant future.
Offshore services (tax havens) contribute by providing employment for Belizean lawyers, accountants and secretaries, and bringing in foreign currency to pay them, but this type of business comes with issues — one of them being the dangers they present to our banking system because of their vulnerability to money laundering.
Tourism is by far our biggest service industry. Statista, at the website statista.com, says UNWTO (United Nations World Tourism Organization) reported that Belize’s “tourism revenue amounted to 427 million U.S. dollars in 2017, up from 391 million U.S. dollars in 2016.”
Belize’s Central Bank says double-digit increases in both overnight and cruise ship visitors led to increased tourism earnings in 2018.
Tourism for sure earns a lot of money, but it is not easy to find out how many of the dollars that circulate in the industry actually serve our economy. It isn’t easy to determine exactly how much tourism contributes, because there is a lot of foreign ownership of the industry, and some/much of what we earn is repatriated. We don’t have a good grasp of what is staying, but we have a good grasp of what’s coming in.
Other areas we noted (in the 2018 Central Bank report) that help us with foreign dollars to narrow the trade deficit are inflows to foreign embassies and military units stationed in Belize; foreign contributions to religious and other non-profit organizations; foreign investments in real estate, agriculture, and tourism–related construction activities; and grant assistance from the European Union for major road construction projects and to fund investments in the banana and sugar industries.
The underworld, the illegal narcotics trade, also brings in money, laundered foreign currency (we don’t know how much) that goes to buy some of the imported goods mentioned in the SIB report, but when we consider the heavy costs of illegal earnings – heavy restrictions on our banking system, violence in Belizean society, security costs — it were better that the transnational drug trade didn’t exist in Belize.
Our international debt went from $256 million in 1989 to $2.5 billion in 2017, an average increase of almost $80 million per year. In the decade between 1989 and 1998 the external debt grew a little more than $26 million per year, but in the years between 1998 and 2017 it averaged out at about $100 million per year.
Our average yearly trade deficit isn’t that large, when compared to our economy. The experts at the Global Economy Guide say that “since economies typically grow at about 2-3 percent per year, the rule is that a trade deficit is sustainable if it doesn’t exceed 3 percent of GDP (the total value of goods and services produced in a country in a year) for many years.” Belize’s average GDP for the years 2008 to 2017 was $3.18 billion, and with our average trade deficit at $100 million per year, our annual trade deficit was about 3.14% of our GDP for much of the last decade; however, our economy has made a downward turn.
At the end of the day, Belize’s economy is chugging along, but we are far too dependent on the sometimes fragile service industries, and our production of goods for export is failing. There are a couple other troubling issues on the economic front, and those are that our national pie is too small, and there is tremendous disparity in the distribution of our wealth.Amandala