World Bank DocumentFOR OFFICIAL USE ONLY
Document of the World Bank
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may n otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
Currency Unit Belize dollar
Since its creation, the Belize dollar (formerly the British Honduras dollar) was tied to sterling at the rate of £1-B7$4.00. In May 1976, this link was broken and the Belize dollar was aligned with the US dollar at the rate of US$1.00 - BZ$2.00.
Since May 1976:
GLOSSARY OF ABBREVIATIONS
ACP African, Caribbean and Pacific BSI Belize Sugar Industries BTL Belizean Telecommunications Limited CARICOM Caribbean Community CBI Caribbean Basin Initiative EEC European Economic Community GDP Gross Domestic Product HHL Hershey Hummingbird Limited IBRD International Bank for Reconstruction and Development IMF International Monetary Fund MFA Multi-Fiber Agreement MUV Manufacturing Unit Value PSIP Public Sector Investment Program UK United Kingdom USA United States of America
FISCAL YEAR
April 1 - March 31
FOR OMCAL USE ONLY
This report is based on the work of a World Bank Economic Mission to Belize in April-May 1989. The Mission comprised Mr. Alberto Herrou- Aragon, Chief of Mission, Mr. Herman Von-Gersdorff (Industry and Tourisvi), Mr. Macdonald Benjamin (Agriculture Consultant), Mr. Nigel Baptiste (Caribbean Development Bank Investment Specialist) and Ms. Barbara Ossowicka (Research Assistant).
This document has a restricted distribution and may be used by recipients- only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
TITLE: : Belize - Economic Memorandum
SECTOR s Country Economic
PUBDATE
ABSTRACT : The Belizian economy has expanded sharply in recent years, with real GDP growfth of 4.52 in 1988. This growth has been led by exports, particularly citrus and bananas. The current account of the balance of payments registered a deficit of only 2Z of GDP. Public sector savings reached about 142 of GDP. The monetary and fiscal authorities continue to stress fiscal responsibility in the public enterprises and the Central Goverment. Although the economy, particularly the export sector, is likely to continue its rapid expansion through the early 1990s, a number of challenges confront the authorities. In particular, demand pressures on the labor market are having an adverse effect on manufacturing and agriculture. Tke coming on stream of a single EEC market by 1992 might have an adverse impact on the preferential treatment for Bananas enjoyed by Belize. The absence of adequate transport and '-her infrastruci-tre has constrained the production potential of bananas in the country's southern districts. A well focused Public Sector Investment Program of some BZ$326 million (US$163 million) is projected for FY89/90-FY92(93. Transport, agriculture and health represent 57Z of the program. The other sectors account for the rest. Given the continuation of good economic management, the relatively good prospects for exports, and Belize's continued ability to attracc and utilize external assistance successfully, the country will remain creditworthy for modest amounts of medium- and long-term foreign borrowing, mainly from official sources.
BELIZE
I. MACROECONOMIC DEVELOPMENTS . .................................. 1
A. Background .............................................. 1 B. Recent Economic Developments ............................ 1 C. Savings and Investment .................................. 2 D. Public Sector Finances .................................. 4 E. Money and Credit ........................................ 5 F. Prices and Wages ........................................ 7 G. Balance of Payments ..................................... 7
II. DEVELOPMENT ISSUES ......................................... 8
A. Introduction ......................................... 8 B. Agricultural Sector ......... ........................... 8 C. Manufacturing Sector .................................... 15 D. Tourism ........................................ 16
III. PUBLIC SECTOR INVESTMENT PROGRAM .............................. 17
IV. ECONOMIC ISSUES AND PROSPECTS ................................. 20
ANNEX I. GOVERNMENTS PROJECT LIST
STATISTICAL APPENDIX
AREA POPULATION DENSITY 22,000 KM2 179.8 (1966) 8.2 per km2
Rate of Growth: 2.3 (1970-63) 16.1 per k-2 of aurble land
POPULATION CHARACTERISTICS (19Z7) HEALTH (1937) Crude Birth Rate (per 1,000) U.? Population per Physeilon 2,068.0 Crude D-eth Rate (p.r 1,000) a.0 Population per Hospital SWd 300.6 Infant Mortality (per 1,000 livo
births) 20.1
INCOME DISTRIBUTION DISTRIBUTION OF LAND OliERSHIP % of National Income, Highest quintile % owned by top 10% of Owners
Lowest quinttl- X owned by Smallest 10X of Owners
ACCESS TO SAFE WATER (1980) ACCESS TO ELECTRICITY (1980) % of Population - Urban 67.6 N of Population - Urbon 72.0
- Rural 29.6 - Rural 65.0
NUTRITION (1977) EDUCATION (1960) Caloric intake as % of Requlrwente 126.0 Adult Literacy Rate X 92.0 Per capita Protein intake 69.3 Primary School Enrol lent X p5.0
OW PER CAPITA IN 1908: Us51,460
GROSS NATIONAL FRODUCT IN 1987 OUTPUT IN 1967
Value Added USS Million X US# Million %
GNP of Market Prices 244.3 100.0 Cross Domestic Investment 60.9 24.9 Agr culture 47.6 22.0 Gross Domestic Savings 54.5 22.8 Industry and Mining 47.4 21.9 Current Account Balance 0.7 0.$ Servicee 121.7 56.2 Exports of Goods, NFS 14.1 560.6 Total 216.7 100.0 Imports of Goods, NFS 149.4 61.2
GOVERNMENT FINANCES Consolidated Public Sector Central Government
BZe Million (X) of GOP BZ8 Million (%) of GDP 1966/87 197/668 1966/67 1967/86 1939/87 1987/66 1966/67 197/88
Current Revenue 139.4 164.6 83.0 82.7 111.7 184.2 26.4 26.6 Current Expenditure 108.2 112.1 24.4 22.a 102.3 110.6 24.8 22.0 Current Account Belince 88.2 62.7 8.6 10.6 8.9 28.4 2.1 4.6 Capital Expenditure 42.4 41.0 10.0 6.1 88.6 26.6 8.0 5.7 External Assistance (net) 19.6 27.5 4.7 5.6 14.9 9.7 8.5 1.9
not applicable not available
Page 2 of 2
COUNTRY DATA - OELIZE
MONEY. CREDIT AND PRICES 198113 1964 1oss 1916 197 1908 -------- BZS Million-Outstanding End Period--------
Monoy *nd Quesi Money 141.8 161.8 160.6 179.4 214.6 238.2 eank Credit to The Centrol Covernment 63.1 79.7 90.4 94.6 62.7 28.6 Bonk Credit to Privote Sector 124.1 136.6 127.0 126.6 166.2 212.5
----------- Percontdgo or Index Numbors----------- Money and quosi Money as W of WDP 39.0 38.9 40.6 42.5 42.6 43.6 Annual percentage changes in: General Price Index 2.6 6.3 -0.6 2.4 2.0 0.9 Bank Credit to Public Sector 49.7 17.0 18.4 4.6 -12.6 -65.2 Bank Credit to Private Sector 6.6 9.4 -6.5 -0.4 23.6 86.0
BALANCE OF PAYMENTS (USS Million) MERCHANDISE EXPORTS (AVERAGE 1964-86) */
1984 196 1936 1967 1968 use Million (O
Export of Goods, NFS 112.2 '04.4 122.? 148.1 167.9 Sugar and Molasses 30.6 36.8 Import of Goods, NS 126.8 118.8 120.7 149.4 179.6 aonanas 5.4 6.9
Resources Gap (deficit a-) -14.6 -14.4 2.0 -6.8 -11.7 Citrus Products 13.3 16.9 Fish Products 7.2 9.1
Factor Service (Not) -10.6 -11.8 -9.6 -7.5 -9.0 All Other Comaodties 22.3 26.8 Not Transfors 12.5 19.0 11.4 14.5 16.0 Total 78.8 100.0 Current Account Balance -12.7 -6.7 8.6 0.7 -6.7
Public Capital 11.1 18.6 18.1 6.7 16.4 Gross Disbursements 4.1 17.0 8.1 7.7 14.7 Afortization -1.7 -7.6 -5.7 -6.5 -5.6 EXTERNAL DEST, DECE*uR 31, 1966 Capital Cronts 8.7 9.4 9.7 6.6 7:6
US$ Million
Other Capital (0et) -6.9 -6.6 -6.1 0.8 8.0 Public Debt, Incl. Guaranteed 116.1 Non-Guaranteed Private Debt ..
Change in Reserves 7.6 -8.8 -10.8 -9.0 -19.7 Total Outstanding A Disbursed (-=Increase)
RATE OF EXCHANGE DEBT SERVICE RATIO FOR 1988 b/
Since May 1976 US91.00 a BZS2.00 Public Debt, Incl.Quaranteed 6.4 BZ21.00 = USSO.60 Non-Ouaranteed Privete Debt ..
Total Outstanding A Disbursed
IBRD/IDA LENDINO (DECEMBER 81, 1988 - MILLIONS USI)
IilR IDA Outstanding A Disbursed 7.2 0.0 Undi*buroed 19.0 0.0 Outstanding Incl. Undiebursed 26.2 0.0
*/ Ratio of debt servico to exports of goods and non-fact, services, excluding re-exports.
b/ Includes financial capital, errors and omisslons, and changes In orrears. c/ Excludes r.-exports.
not applicable not avallabl
SUMMARY AND CONCLUSIONS
i. The Bel4zean economy has been experiencing a period of rapid structural change and vigorous growth thanks mainly to the successful implementation of the Government's development strategy. The major thrust of the strategy has 'jeen to promote export-led growth by diversifying agricultural production and exports away from the excessive dominance of sugar into producticn of bananas, citrus, cocoa and fisheries, while simultaneously developing manufacturing--mainly garments--and tourism. The creditable performanice of the agricultural sector from the mid-eighties to date, and the gradual emergence of manufacturing and tourism as increasingly important activities, reflect the impact of both government policies and of changes in the country's terms of trade.
ii Economic performance during the early to mid-1980s was affected by the sharp deterioration of the country's terms of trade and an inadequate domestic policy response; economic growth averaged only 1.2X per year during that period. In 1985, economic growth slowed down to 2Z as sugar prices and exports fell to their lowest level in six years. The Government responded to the deteriorating economic conditions by introducing tight demand management policies designed to eliminate domestic and external imbalances. In 1986, the economy recovered as real GDP rose by 5% reflecting the expansion in construction and services. Substantial increases in the production of bananas, oranges and grapefruit were achieved. In 1987, real GDP expanded by almost 14Z. This spectacular growth reflected sharp increases in practically all economic activities and was fueled by rapidly expanding exports of bananas, citrus concentrates, garments and tourism. Preliminary estimates for 1988 indicate that real GDP growth slowed down to a more normal rate of 4.5% following a contraction in agriculture production and a decline in the growth of manufacturing and of services.
iii. Belize has demonstrated a strong commitment to domestic resource mobilization and to stepping up its investment effort to sustain rapid growth. Gross national savings increased steadily during 1986-88. In 1986, gross national savings represented about 21Z of GDP compared to 16% in 1985. Private savings increased from about 122 of GDP in 1985 to 13.5% in 1986, despite a pronounced reduction in private transfers from abroad. Public sector savings increased from 5% of GDP in 1985 to about 8% in 1986. In 1987, gross national savings reached 24.5% of GDP. Private and public sector savings represented 15.5% and 9% of GDP, respectively. In 1988, gross national savings increased by about one percentage point of GDP. However, private savings fell to 12.4% of GDP while public sector savings increased to 13.4% of GDP.
iv. Although public finances have improved markedly, the Central Government still faces problems recruiting skilled staff. At their present levels, central government wages for skilled workers are too low to compete with those of the non-financial public enterprises and the private sector. As a further round of wage increases wilL most likely decrease central government savings, the Government should consider restraining other current expenditures so as to ensure that sufficient savings remain to undertake the level of needed investments in support of its development strategy.
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v. After incurring deficits averaging 7.7% of GDP during 1984-85. the resource balance registered a surplus of about 1Z of GDP in 1986. This turnaround reflected a decrease in private consumption. However, in 1987 the resource balance deteriorated to a deficit equivalent to about 3Z of GDP because of increases in gross private investnient. Preliminary 1988 estimates indicate that the resource gap has widened to about 4Z of GDP as a result of increases in fixed investment equivalent to almost four percentage points of GDP. The 1987-88 resource gaps essentially differ from those of 1984-85. The 1984-85 deficits resulted from fiscal deficits which were financed by capital inflows. On the other hand, the 1987-88 resource gaps were incurred with a surplus in the public sector's operations. In those two years, the country's resource gaps were caused by increases in private investment expenditure which reflected buoyant private activity and highly favorable expectations on the economy's long-term prospects.
vi. The primary economic masiagement and development challenge for the Government of Belize is to both maintain, over the short term, prudent macroeconomic management and, over the medium-term, the momentum achieved in economic growth and diversification of the economy. The public sector's role in this effort centers on two broad policy fronts. First, to continue to improve public investment performance with regard to the economic and social Jnfrastructure, particularly eliminating critical bottlenecks, and to ensure that the overall incentive structure is conducive to efficient resource allocation. The latter requires that demand pressures on the labor market be alleviated by loosening restrictions on immigrant labor work permits. Second, diversification of agriculture should continue to minimize any adverse effects on banana production and exports which could emerge by the coming on stteam of the single EEC market by 1992.
vii. With regard to markets and market prospects, while favorable factors dominate Belize's relationships with its main trading partners, some uncertainties currently exist on the future status of some of its agricultural exports. First, Belize enjoys privileged access in three distinct markets. It is a beneficiary under the Caribbean Basin -nitiative in the United States market. This has provided a powerful stimulus to growth of the citrus industry in particular. Belize enjoys, through its membership in the ACP countries (Africa, Caribbean and Pacific), a preferential position in EEC markets under the Lome Convention. This provides strong support for both the sugar and banana industries. With regard to market prospects for specific commodities, there are two major areas of concern. The first relates to the possible adverse impact on the sugar industry if Belize's quota in the US market were to be phased out. The second relates to the formation of a single EEC market by 1992 and its possible adverse impact on the preferential treatment now enjoyed by ACP banana producers vis-a-vis bananas from non-ACP countries. Lastly, the small size of the domestic market suggests high costs for required support services and distribution affecting competitiveness within the CARICOM market. This also poses a problem for infrastructure development, especially roads required for perishable products such as bananas. Over the medium-term, however, the agricultural sector could face an increasing wage bill as both labor costs and the strong dependence on imported labor rise.
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viii. Growth prospects for the tourism sector are provmising, particularly because of the potential to develop archaeological sites in addition to the rapidlv expanding sun and beach tourism. However, the rate of expansion of the sector will depend on the speed with which additions to the existing stock of hotel rooms is increased to meet the rapidly risin- demand. However, in San Pedro--the most important tourist destination-- possible expansions in tourist facilities are constrained by inadequate infrastructure.
ix. A critical issue in manufacturing is the high cost of electricity. The larger manufacturing companies, however, have been generating their own supply to reduce costs and improve reliability. Although electricity tariffs for loan consumption levels were reduced in 1988, the new rates provide monthly savings of only US$5.9 for the industrial consumers. Over the medium-term, electricity tariffs for industrial users (US$0.205 per kwh) could be reduced in the area interconnected with Mexico once the interconnection is completed.
x. At approximately BZ$69 million, public sector investment in FY88/89 was similar to the planned level of BZ$67 million. This improvement reflects a strengthening in project implementation. However, there are a nuaber of areas where Government attention is needed to sustain adequate levels of public investment over the next four years. These relate to the staffing of planning departments, classification between capital and recurrent expenditures, finalization of project design. development of a project pipeline for external financing and coordination between the respective mintitries and the donor agencies. For the period FY89190 to FY92/93 the public sector investment program (PSIP) has been projected, in accordance with the country's macroeconomic requirements for growth, at some BZ$326 million (US$163 million). However, the country's core PSIP would total BZ$188 million, of which about 87X is scheduled for ongoing projects. Agriculture, manufacturing, mining and tourism, comprise 29% of the projected PSIP, with agriculture indi-idually accounting for 24Z. Projects designed to improve the country's infrastructure and to eliminate constraints to diversification, i.e. transportation, water and power facilities, correspond to 41% of the PSIP. Projects for the social services sector, which would help to provide the tasic needs of the population, i.e., health, housing and education, account for 24Z, while public administration and uther projects comprise the remaining 6z.
xi. External financing requirements for the PSIP will be determined by the level of domestic resource mobilization. The requirement for public sector investment is estimated to be US$163 million. Scheduled amortization requirements amount to US$32 million for the four year petiod. Public sector savings and capital revenue are projected to provide approximately US$159 million. Scheduled disbursements under external conmitments for ongoing projects would provide US$54 million. A financing gap for the four years of US$58 million would remain, of which US$48 million represents financing for new projects for which the Government is seeking donor assistance.
xii. The economy is projected to grow by about 4% on average in real terms during 1989-93 as a result of the projected expansion in tourism and agriculture. Beyond 1993, growth is expected to slowdown to about 3Z per year because of lower projected growth of both sectors. Although both the
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resource and current account balances are projected to be in deficit during the projection period, capital inflows are envisaged to be enough to cover the external financing gap and provide a surplus in the overall balance of payments during most of the period. This, in turn, will meet the increase in the demand for cash balances as the economy expands. The debt ;ervice to exports ratio is projected to decrease from 6.4Z in 1988 to 5.9Z by 1998, while the ratio of external debt to GDP is projected to decrease from about 422 in 1988 to 332 by 1998. As Belize continues to borrow only for high-quality infrastructure investments and avoids excessive credit creation, the country will remain creditworthy for modest amounts of medium and long-term borrowing, particularly from official sources.
I. MACROECONOMIC DEVELOPMENTS
A. BACKGROUND
1. Belize, which encompasses 23,000 sq. kilometers, is located south of Mexico's Yucatan Peninsula on the Caribbean coast of Central America. With a population of about 180,000 in 1988, it is one of the least densely populated countries in the world, i.e. eight persons per square kilometer. At the time of the 1980 census, about one-fourth of the population lived in Belize City, the country's largest city, and in its suburbs. Belize's population is predominantly young (about 502 below the age of fifteen) and quite literate (the primazy school enrollment and adult literacy rates slightly over 90). The country is endowed with abundant and fertile land, literate urban labor, proximity to NortU' America and a stable currency (i.e. its exchange rate has been pegged to the US dollar at a fixed rate since 1976), all of which make it attractive to foreign investment.
2. The country has a small, open economy primarily based on export agriculture but also on tourism and export manufacturing. The economy's openness naturally results in a high ratio of imports to GDP and in vulnerability to price changes in its principal exports. Agriculture is an important sector of the economy, accounting for almost a fifth of GDP in 1987. About two-fifths of agricultural value added and over one-third of commodity exports are derived from sugar. The rest of agriculture comprises citrus and banana production and fishing for exports, and the production of corn, rice, beans and livestock for lomestic consumption. Industry (including construction and electricity) accounts for about a quarter of GDP. The major rubrics are export oriented: sugar refining, citrus processing and garments. The service sector, principally commerce and public administration, accounts for over half of ,DP.
3. In one regard, Belize's economy is more open than other small economies in the region. It is dependent on immigrant agricultural labor, whose relative high wage rates are needed to attract labor from neighboring countries. In addition, wages for Belizean skilled labor are a reflection of US labor market opportunities. High-cost labor by world-wide developing country standards also causes Belize to be a high cost producer. Its production base is therefore dependent on trade preferences and high productivity.
B. RECENT ECONOMIC DEVELOPHENTS
4. Economic performance during 1980-85 was affected by thte sharp deterioration of the country's terms of trade and an inadequate domestic policy response. Economic growth averaged only 1.2Z per year during that ,eriod. In 1984 real GDP growth expanded by 4.4Z in the wake of a temporary recovery of sugar prices and increases in public expenditure. However, that rate of growth was not sustainable since it was achieved by means of expansionary demand management policies that resulted in non- sustainable domestic and externai imbalances. In 1985, economic growth slowed down to 2Z as sugar prices and exports fell to their lowest level in six years. The Government responded to the deteriorating economic conditions by introducing tight demand management policies in 1984 designed to eliminate domestic and external imbalances.
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5. In 1986, the economy recovered. Real GDP rose by 52 as a result of the expansion in construction (7.7Z) and services (4.92). Agricultural output fell by only 12 despite an 112 fall in sugarcane production following a drop in prices, as substantial increases in the production of bananas, oranges and grapefruit were achieved. The increase in banana output was promoted by the privati;ation of the industry in 1985 which enabled farmers to respond adequately to the higher prices in the preferential UK market. The increase in citrus production, in turn, stemmed from the opening up of the U.S. market through the Caribbean Basin Initiative (CBI). Manufacturing output increased by only 2Z because of a decrease in the production of refined sugar following the drop in sugarcane production.
6. In 1987, real GDP expanded by almost 14Z. This spectacular growth reflected sharp increases in practically all economic activities. The upturn in construction originated from commercial as well as residential const.uction. In agriculture, sugarcane production continued to decrease, but it was more than compensated for by the expansion in the production of bananas, oranges, grapefruit, corn and poultry. Increases in the catch of fin fish and conch raised output in the fisheries subsector. The growth of manufacturing production was propelled by increases in the production of citrus concentrates, cigarettes, flour, batteries and fertilizer. The fertilizer industry responded, in turn, to the increased demand generated by rising banana and citrus production.
7. Preliminary estimetes for 1988 indicate that real GDP growth slowed down to a more normal rate of 4.52 following a contraction in agriculture production and a decline in the growth of manufacturing and of services. Agriculture was affected by adverse weather conditions which reduced the production of citrus and, in turn, of citrus concentrates. On the other hand, production of garments increased by almost 402 as a result of new investments coming into fruition.
C. SAVINGS AND INVESTMENT
8. Belize has demonstrated a strong commitment to domestic resource mobilization and to stepping up its investment effort to sustain rapid growth. Gross national savings increased steadily during 1986-88. In 1986, gross national savings represented about 212 of GDP compared to 162 in 1985 (see Table 1 below). Private savings increased from about 12% of GDP in 1985 to 13.52 in 1986, despite a pronounced reduction in private transfers from abroad. Public sector savings increased from 52 of GDP in 1985 to about 82 in 1986. In 1987, gross national savings reached 24.52 of GDP. Private and public sector savings represented 15.5Z and 92 of GDP, respectively. In 1988. gross national savings increased by about one percentage point of GDP. However, private savings fell to 12.42 of GDP while public sector savings increased to 13.42 of GDP.
9. Fixed capital formation increased substantially during 1987-88. In 1987, fixed capital formation represented 232 of GDP compared to an average of 182 during 1985-86 in reflection of increases in investments in machinery and equipment as well as construction and land development originating from the expansion in private sector investment activity.
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Growth Rates
Gross Domestic Product a/ 4.4 2.2 5.0 13.6 4.5 Primarv Sectorb/ ci 2.3 -1.3 -4.3 16.1 -3.9 Secondary Sector -T d/ -0.7 0.2 4.0 14.4 5.9 Tertiary Sector b - 4.4 4.8 4.9 10.1 3.8
Consumer Price Index 5.8 -0.6 2.4 2.0 0.9 (end of period)
Ratios to GDPe/
Foreign Savings 6.4 3.4 -1.8 -0.3 2.0 Gross Domestic Investment 23.5 19.8 19.4 24.2 26.4 Fixed Capital Formation 20.7 17.7 18.5 23.0 25.3 Private Sector 11.6 8.4 8.8 13.8 13.7 Public Sector 9.2 9.3 9.7 9.2 11.6
Changes in Stocks 2.8 2.0 0.9 1.2 1.1 Gross National Savings 17.1 16.4 21.2 24.5 24.4
Private Sector 16.0 11.6 13.5 15.5 11.7 Public Sector 1.1 4.8 7.7 8.9 12.7
Investment-Savings 6.4 3.4 -1.8 -0.3 2.0
Memorandum Item Share of Gross Domestic 27.2 17.2 -9.3 -1.2 7.2
Investment Financed by Foreign Savings
a/ In real terms at market prices. UT In real terms at factor cost. ET Includes agriculture, forestry, fishing and mining. 3T Includes manufacturing, electricity and water, and construction. eT Current prices.
Source: Statistical Appendix Tables 2.2, 2.3, 3.1 and 8.1.
Private investment almost doubled, from an average of 8.5Z of GDP during 1985-86 to about 14? in 1987. Public sector investment remained almost constant throughout 1985-87. In 1988, fixed capital formaticn reached 25Z of GDP, as public sector investment climbed more than two percentage points of GDP over its 1987 level.
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D. PUBLIC SECTOR FINANCES
10. After incurring a deficit of 1Z of GDP in FY86/87 (excluding grants), the consolidated non-financial public sector was in surplus by 3Z of GDP in FY87/88 (see Table 2 below). This turnaround was achieved through an improvement in the finances of the central government. which turned from a deficit of 4Z of GDP in wY86/87 into a surplus equivalent to 1.22 of GDP in FY87/88. Current expenditures were cut and tax revenue increased by an equivalent of 22 and 12 of GDP, respectively--the reduction in current expenditures was achieved notwithstanding wage increases granted to permanent workers. This remarkable management of central government finances contributed to an increase in public sector savings equivalent to 10.52 of GDP in FY87/88.
Table 2: PUBLIC SECTOR FINANCES, FY19P4/85-FY1988/89
(Z of GDP)
1984/85 1985t86 1986/87 1987/88 -988/89
Public Savings 2.3 4.7 8.5 10.5 13.6 Central Government -0.5 0.1 2.1 4.7 5.7 Public Enterprises 0.6 2.4 4.3 4.0 6.1 Social Security Board 2.2 2.2 2.1 1.8 1.8
Capital Revenue 0.4 0.0 0.4 0.8 6.2
Capital Expenditure 9.0 9.7 10.0 8.1 12.7 Central Government 6.9 7.2 6.5 4.2 5.6 Public Enterprises 2.0 2.5 3.5 3.9 6.9 Social Security Board 0.1 0.0 0.0 0.0 0.2
Overall Surplus Deficit -6.3 -5.0 -1.1 3.2 8.3 Changes in arrears -0.1 1.1 0.0 0.0 0.0
Financing 6.4 3.9 1.1 -3.2 -8.3 External (net) a/ 5.4 6.1 5.4 6.2 n.a. Domestic (net) 1.0 -2.2 -4.3 -9.4 n.a.
a/ Includes grants. n.a. Not available.
Source: Statistical Appendix, Table 5.3.
11. Preliminary FY88/89 estimates indicate that the public sector achieved an overall surplus equivalent to 82 of GDP in FY88/89 as a result of the sale of the Government's shares in the country's telecommunications company, and an increase of public sector savings to 142 of GDP stemming from further improvements in the savings performance of the Central Government and the non-financial public enterprises.
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12. Although public finances have improved markedly, the Central Government still faces problems recruiting skilled staff. At their present levels, central government wages are too low to compete with the non- financial public enterprises and the private sector. As a further round of wage increases will most likely decrease central government savings, the Government should consider restraining other current expenditures so as to ensure that sufficient savings remain to undertake the level of needed investments in support of its development strategy.
13. In FY89/90, an income tax reform is to be implemented. The reform follows the IMF recommendations on reducing the number of tax brackets from twelve to four. The tax threshold and personal allowances are to be increased f,om BZ$5,000 to BZS7,000 and from BZ$1,400 to BZ$3,000, respectively. Dependency exemptions also are to be increased. This reform, designed to benefit low income groups, is estimated to reduce revenues by about 0.72 of GDP.
E. MONEY AND CPEDIT
14. Since Belize's currency is linked to the US dollar, the quantity of money is demand determined and this constrains the policy instruments availeble to the Government. In particular, domestic credit policy has no effect on changes in the money supply but only on its composition as between domestic and net foreign assets.
15. Domestic credit expanded at an average annual rate of 152 during 1981-84, fueled by increasing fiscal deficits, and was the main czuse of a systematic fall in net international reserves (frcm US$1.1 million in 1981 to a negative US$13.6 million at the end of 1984). In December 1984, the country entered into a Stand-by Arrangement with the IMF. As part of the agreement, the Government introduced a tight credit policy implemented through increases in reserve requirements and interest rates. At the end of 1986, domestic credit had fallen by 92 compared to 1984 while net international reserves increased to US$8.8 million. The increase in net international reserves was equivalent to almost 202 of the quantity of money broadly defined originating from the decreases in domestic credit and expansion in economic activity (see Table 3 below).1
16. In 1987 credit became loose as domestic credit was expanded by an amount equivalent to about 10% of the quantity of money. Nevertheless, net international reserves continued to increase, fueled by the increased demand for real cash balances originating from the rapidly expanding economic activity. The increase in international reserves represented 112 of the quantity of money, which in turn, increased by 202 during 1987.
1/ An increase in real GDP increases ths public's demand for real cash balances. In the absence of an increase in domestic credit, the increase in the demand for real cash balances generates a corresponding increase in net international reserves. Conversely, a decrease in domestic credit would result in an increase in net international reserves.
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(in rercent)
1984 1985 1986 1987 1988
Net Domestic Credit a/ 13.5 -2.7 -7.7 10.0 -2.1 Credit to the Public Sector a/ 5.7 -1.6 -4.9 -8.1 -26.3
Central Government 8.2 7.0 2.6 -6.6 -25.1 Rest of Public Sector -2.5 -8.6 -7.5 -1.5 -1.2
Credit to the Private Sector a/ 8.3 -5.8 -0.3 16.6 26.2 Net International Reserves b/ 0.6 8.8 19.6 11.1 16.0 Money 18.8 0.0 10.7 22.5 16.4 Money Plus Quasi-Money 7.1 5.7 11.8 19.6 11.0
a/ Changes in the stock of domestic assets as a percentage of the stock of money and quasi-money at the beginning of the period.
b/ Changes in the stock of net international reserves as a percentage of the stock of money and quasi-money at the beginning of the period.
Source: Statistical Appendix Table 6.1.
17. In 1988, the stock of net dimestic assets of the banking system remained virtually constant because credit to the public sector was reduced by 26% of the quantity of money and was offset by an equivalent increase in credit to the private sector. The decrease in public sector credit originated from a rise in central government deposits in the Central Bank, particularly ftids corresponding to the sale of its shares in the Belizean Telecommunications Limited (BTL). In turn, a 26% increase in credit to the private sector originated both from increases in deposits of non-financial public enterprises in commercial banks, and in the demand for interest bearing deposits by moneyholders as well as from increased loan demand. As a result, lending interest rates decreased from an annual average of 14.72 in 1986 to 14% in 1987 and 13.6Z in 1988. Time deposit rates (as well as other interest bearing deposit rates) also fell from an annual average of 11.92 in 1986 to 9.62 in 1987 and 8.4% in 1988. These developments increased the spread between average lending and deposit ratas to 7.2 percentage points in 1988 from 5.8 percentage points in 186. Since total net domestic credit did not change, the increased demand for money generated an increase in net international reserves.
F. PRICES AND WAGES
18. As Belize's exchange rate is pegged to the US dollar, its inflation tends to reflect that of its major trade partners, particularly the U.S.. Between 1980 and 1983, prices increased by about 252 in Belize, while in the U.S. they increased by 212. After 1983, the decline in US inflation contributed to bring down inflation in Belize. Between 1983 and 1988, domestic prices in Belize increased at an annual average of 2.22 while those in the US rose at an annual average of 3.42.
19. Belize does not report data on labor market conditions. However, there is evidence of shortages of labor in the country, particularly in construction and manufacturing activities. These shortages are one of the major constraints limiting Belize's development prospects.
G. BALANCE OF PAYMENTS
20. After incurring deficits averaging 7.72 of GDP during 1984-85, the resource balance registered a surplus of about 12 of GDP in 1986. The value of exports increased by about 182 and that of imports by about 22 compared to their 1985 levels. This turnaround reflected a decrease in private consumption. However, in 1987 the resource balance deteriorated to a deficit equivalent to about 32 of GDP. While total exports increased by almost 172, total imports increased about 242 because of increases in private investment. Preliminary 1988 estimates indicate that the resource gap has widened to about 42 of GDP as a result of increases in fixed investment equivalent to almost four percentage points of GDP.
21. The 1987-88 resource gaps are essentially different from those of 1984-85. The 1984-85 deficits resulted from fiscal deficits which were financed by capital inflows. On the other hand, the 1987-88 resource gaps were incurred with a surplus in the public sector's fiscal operations. In those two years, the country's resource gaps were caused by increases in private investment expenditure which reflected buoyant private activity and highly favorable expectations on the economy's long-term prospects.
22. Both export and imports expanded vigorously following the implementation of the country'a adjustment program. Exports of goods increased by 482 in value from 1985 to 1988 mostly because of rising exports of citrus concentrates, bananas and garments. During most of the 1985-88 period, sugar exports remained near their 1984 levels after recovering from the drop in prices in 1985. The volume of exports of banana increased 130Z during 1985-88. In value terms, banana exports increased 1772 during the same period. Exports of citrus concentrates increased by almost 72Z in volume and 632 in value between 1985 and 1987. Exports of garments increased by almost 902 in volume and 312 in value between 1985 and 1988. The value of imports increased at about the same pace as exports from 1985 to 1988, primarily because of the import cf investment goods.
II. DEVELOPMENT ISSUES
A. INTRODUCTION
23. The Belizean economy has been experiencing a period of rapid structural change and vigorous growth thanks mainly to the successful implementation of the Government's development strategy. The major thrust of the strategy has been to promote export-led growth by diversifying agricultural production and exports away from the excessive dominance of sugar into production of bananas, citrus, cocoa and fisheries, while simultaneously developing manufacturing--mainly garments--and tourism. The creditable performance of the agricultural sector from the mid-eighties to date, and the gradual emergence of manufacturing and tourism as increasingly important activities, reflect the impact of both government policies and of changes in the country's terms of trade.
24. Despite the recent successful performance of the economy, Belize's longer-term growth prospects will be constrained unless the following key issues are addressed: (i) demand pressures on the labor market are having an adverse effect on manufacturing because of the increased demand for labor by construction and tourism activities; and (ii) the coming on stream of a single EEC market by 1992 might have an adverse impact on the preferential treatment enjoyed by Belize.
(i) Labor Demand Pressures. As a result of increases in construction and tourisn activities during 1987-88, there have been demand pressures on the labor market. These pressures have resulted in increasing real wages, affecting the competitiveness of manufacturing exports, particularly to the US market. This could be alleviated by loosening restrictions on immigrant labor. However, the Government has increased the work permit fees for workers in manufacturing from US$2.5 to US$250. Moreover, hiring costs are being further escalated since the permits are not transferable and many firms absorb their cost. These new regulations are also affecting agriculture.
(ii) EEC Trade Preferences. The largest single issue facing the banana industry is how the creation of a single EEC market will impact on the preferential market arrangements now enjoyed by Belize under the Lome Convention. Presently, Belize exports all its bananas to the protected U.K. market. Bananas from ACP countries (Africa, Caribbean and Pacific) enter the UK free of duty and license restrictions in contrast to bananas from non-ACP countries, which requ're licenses issued after ACP bananas are absorbed. The banana protocol under the current Lome Convention expires in 1992. The ACP countries fear that the free circulation of bananas from non-ACP countries within the EEC market would threaten their industries, since they would not be in a position to compete either in terms of price or quality.
B. AGRICULTURAL SECTOR
25. The Government's 1985-89 Macroeconomic Plan targeted identified specific commodities for development, i.e., bananas, citrus, cocoa and shrimp. To this end, the Government undertook the following measures: it privatized the banana industry and activelv pursued external funding to
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finance the expansion of the above commodities. These actions, complemented by private sector initiatives, have begun to bear the desired results.
26. The plan set targets of growth for total exports during 1985-89 between 10.82 and 16.62 per year. All the agricultural export commodities except cocoa had exceeded the minimum rates targeted by the plan's third year. Bananas in particular showed strong growth. Shrimp mariculture suffered from problems of a technical, managerial and financial nature, while overfishing has been a problem. The domestic food crops sub-sector has shown blixed performance. While maize and red kidney beans showed increases of 92 and 14? respectively on an annual basis, rice production declined by 9Z per year, although in 1988, production registered a strong recovery. Whereas production of poultry has been very buoyant, the beef industry suffers from overextraction, which will necessitate imports of breeding stock. The 1988 beef output of two million pounds was the lowest in the past eight years. Pork production, however, shows continued growth. Feed supply at competitive prices poses a constraint to growth not only for pork but also for dairy products production. Despite this, in 1988 milk production increased almost 20? above its 1987 level and more than doubled production in 1984 and 1985. Until recently, the forestry subsector had stagnated but recent investments have provided a boost to prc uction and exports: the operation of one large modern sawmill contributed to a growth of erports from 1.6 million to 4.9 million board feet between 1986 and 1987. Two veneer mills under construction should soon begin operating. In 1988, exports of forestry products exceeded US$2.7 million.
27. With regard to markets and market prospects, while favorable factors dominate Belize's relationships with its main trading partners, some uncertainties currently exist on the future status of some of its agricultural exports. First, Belize enjoys privileged access in three distinct markets. It is a beneficiary under the Caribbean Basin Initiative (CBI) in the United States market. This has provided a powerful stimulus to growth of the citrus industry in particular. Belize enjoys, through its membership in the ACP countries, a preferential position in EEC market, under the Lome Convention. This provides strong support for both the sugar and banana industries.
28. With regard to market prospects for specific commodities, there are two major areas of concern. The first relates to the possible adverse impact on the sugar industry if Belize's quota in the Uc .narket were to be phased out. The second relates to the formation of a .ngle EEC market by 1992 and its possible adverse impact on the preferential treatment now enjoyed by ACP banana producers vis-a-vis bananas from non-ACP sources.
29. Lastly, as a member of CARICOM, the small size of the domestic market suggests high costs for required support services and distribution. This also poses a problem for infrastructure development, especially roads required for products such as bananas. Over the medium-term, however, the agricultural sector could face an increasing wage bill as both labor costs and the strong dependence on imported labor rise.
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Sugar
30. The sugar industry experienced strong declines in output during the 19808. While it remains thp country's most important foreign exchange earner, its predominant role in the economy has diminished considerably. In 1988 sugarcane production fell to 0.8 million tons, contrasting sharply with the average production of 1.0 million tons for the period 1980-85. However, productivity increased. Declines in acreage also occurred, from an average of 60,000 acres in 1980-1982 to 56,000 acres in 1988. These trends reflect two basic factors: the declines in world market prices and the severe cutbacks in the quoca for Belize in the US market. It appears that this declining trend has been temporarily detained, though production is not expected to reach the levels of the early 1980s. These trends also had an effect on the implicit subsidy received by Belize's sugar exports from the US and EEC markets. The subsidy dropped from about 9% of GDP per year on average during 1982-84 to about 7Z during 1985-88 (see Table 4 below). Changes in prices and import quotas, together with the depreciation of the U.S. dollar against the major European currencies, affected the level of the subsidy. In the U.S. market, for example, the subsidy dropped from about 42 of GDP per year on average during 1982-84 to about 1Z of GDP during 1985-88. On the other hand, in the EEC market, the subsidy increased from about 42 of GDP per year on average during 1982-84 to about 62 of GDP during 1985-88.
Table 4: IMPLICIT SUBSIDY TO BELIZE'S SUGAR EXPORTS FROM PREFERENTIAL MARKETS, 1982-88
(Z of GDP)
US EEC Total
1982 4.2 4.9 9.1 1983 4.2 4.3 8.5 1984 4.4 3.7 8.1 1985 2.2 4.5 6.7 1986 .9 5.2 6.1 1987 .9 6.6 7.5 1988 1.4 6.1 7.5
Source: Bank staff estimates; Statistical Appendix, Table 7.4.
31. The value of exports of sugar and molasses reached US$35.5 million in 1988, as compared to a yearly average of US$ 31 million for 1986-87. In 1988 the ratio of sugar came to sugar produced was about 9.5. The current yields of sugarcane to sugar have gone down and the output ratio is currently estimated at 8.65. Nevertheless, this year's sugarcane production is likely to increase reflecting an active program by The Belize Sugar Industries. Ltd. (BSI) whereby farmers have been given financial and organizational support to enable them to carry out substantial replanting and rehabilitation work.
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32. A major restructuring of the industry in 1986 contributed to its improved performance when BSI closed the inefficient Libertad Sugar Mill in Corozal and undertook efficiency reforms at the modern Tower Hill Factory in Orange Walk. The purchase of the Libertad Factory by Petrojam Ltd, the Jamaica State Oil Company, has injected a new dimension into the industry. The sugarcane requirements of about 300,000 tons annually for the manufacture of wet alcohol for shipment to Jamaica for production of ethanol to be marketed in the US, will provide a powerful boost to the industry. The goal continues to be that Petrojam would grow about 170,000 tons of sugarcane to meet its own requirements with the remainder being purchased from sugarcane growers. However, it is highly uncertain about whether the supply requirements will be forthcomlng.
33. The unification ot the EEC market by i992 will lot prejudice the operation of the Sugar Protocol, which is expected to continue indefinitely. Efforts to reduce prices paid to European best sugar growers will, however, impact adversely on the prices that sugarcane growers receive. There are concerns, however, on the possible phasing-out of the US quota unless preferential treatment is granted to CBI countries. In light of the above developments, the prospects for strong growth of the industry remain rather weak.
Bananas
34. The industry has experienced strong growth since 1985, when exports of 555.000 boxes with a value of about US$3 million were realized. The corresponding 1988 figures were 1.394,000 boxes and US$8 million. The planted acreage more than doubled in the same period. Two major factors accounted for this growth performance: (i) the Banana Control Board was divested of its commercial holdings which were taken over by private enterprise, which invested heavily in the expansion of the planted area including the development of irrigation; and (ii) higher prices resulting from renegotiation of the pricing formula between the Board and its sole UK purchaser. As a consequence of both factors, the implicit subsidy to Belizean banana exports in the preferential U.K. market increased from 0.42 of GDP in 1984 to 1.22 of GDP in 1987 (see Table 5 below).
Table 5: IMPLICIT SUBSIDY TO BELIZE'S BANANA EXPORTS FROM THE U.K. MARKETS, 1983-87
(2 of GDP)
1983 0.3 (26.9) a/ 1984 0.4 (37.0) a/ 1985 0.7 (65.6) a/ 1986 0.6 (40.5) a/ 1987 1.2 (69.5) a/
a/ Price differentials between Belizean export unit values and banana export prices in developing countries, in percent.
Source: Bank staff estimates; Price Prospects for Major Primary Commodities, The World Bank, Vol. II, 1988.
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35. After a chequered history, it appears that the industry is poised for a more even growth pattern. Yield in boxes have risen by almost 70Z since 1985. In terms of productivity, however, Belize with an average yield of 10.7 tons per acre, still ranks far behind Honduras' yield of 17.7 tons and Costa Rica's 14.2 tons. However, it leads Ecuador (7.5 tons) and the Windward Islands (4.3 tons). The latter two countries are the main suppliers of bananas to the UK market. Belize has the potential to further increase yields to higher levels with a more intensive use of modern inputs. This would enable the industry to compete favorably with t.he more efficient banana producing countries in the event that the creation of a single EEC market impacts on the preferential market arrangement enjoyed by Belize under the Lome Convention. The industry is largely dependent on immigrant labor from Honduras, Guatemala and Salvador which accounts for half of its work force. Labor costs have been increased by the increase in fees being charged for work permits (US$2.5 to US$50). Such fees should be reduced to take into the account the need to increase the industry's competitiveness. Another important development that could improve considerably the industry's competitiveness is the planned port facility at Big Creek which would permit direct shipment of fruit to the UK and result in transhipment savings. Further benefits wou.d be derived from improved quality in the handing of the fruit.
36. The coming on stream of a single EEC market might have adverse effects on the banana industry. World Bank estimates 'iave shown that a drop in the international price of bananas may have cevere adverse effects on banana production and on the economies of the banana producing Windward Islands. Banana supply price elasticities for those countries have been estimated to be in the range of 1.5-2.5. In the case ot Belize, its much flatter topography, together with a larger average size of farm, makes banana production more dependent on mode m inputs and, hence, for the banana supply price elasticity to be higher than for the Windward Islands. Moreover, alternative crops such as citrus would tend to make the supply response to a change in re],tive prices in Belize much more elastic and cause a larger reduction in banana production. As citrus's gestation period is much longer than that of bananas, non-sugar agriculture might face adverse shocks over the medium-term in the absence of yield increases and cost reductions.
Citrus
37. The industry has shown buoyant growth in the past five years. Industry sources estimate that the 1983 acreage of citrus, oranges and grapefruit, was about 12,000 acres, of which 3,000 acres were in bad condition. By 1988, the latter had been rehabilitated and 6,000 new acres established. The industry estimates that planted acreage could reach 30,000 acres over the next five years. Meanwhile, yields have climbed from 150 boxes per acre in 1983 to some 275 boxes in the 1988-89 season. The value of exports (mainly frozen orange juice concentrate to the US and CARICOM, particularly Trinidad and Tobago) has doubled to about US$18 million during 1984-88. A significant factor in boosting the growth of the industry has been the beneficial treatment awarded under the CBI by which it obtains duty free access to the US market.
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38. The industry is located almost entirely in the Stann Creek Valley which facilitates transportation and supervision. The Citrus Growers Association, funded by a cess on produce, provides the required extension services. The citrus processing industry comprises two firms located close to each other in the Stann Creek Valley. Since the utilization rate for both factories is about 45?, the industry could cope with increases in output in the foreseeable future. There are two constraints, however, to the industry's prospects. The first relates to the incidence of the Med- fly in the Stann Creek Valley which would entail ,-ruit losses to growers, and warrants close monitoring. The second relates to labor availability. About two to three weeks are required to secure a work permit while its costs have increased dramatically.
Cocoa
39. The planted acreage includes about 1,180 acres at varying stages of production, with the 1988 level of output being 126,000 pounds dry beans with an export value of about US$0.1 million. Until the late 1970s, the growing of cocoa was practiced by native Indians. The entry of Hershey Hummingbird Limited (HHL), a subsidiary of Hershey Foods Corp. of the U.S., injected a strong commercial dimension in the production of cocoa. This determined effort to expand cocoa production is occurring despite unfavorable world market trends. Cocoa bean prices are at their lowest level since 1975 and are projected to remain low because of high global stocks and the large number of plantings still to reach full bearing age.
40. Two important factors favor the industry's growth prospects. First, the role of HHL spans several activities, including production and processing, marketing research and development, and procurement. Second, the quality dimension is a major factor in the ability of Belize to carve cut for itself a niche in the world market. The cocoa is of the Criollo variety, which produces a high quality cocoa and accounts for about 3? of world production in contrast to the lower quality Forastero grown in the large producing countries. Belize cocoa is used for blending purposes and commands a significant premium over quoted market prices.
41. The constraints that in the past inhibited growth of the industry have now largelv been removed. Inadequate infrastructure, however, still remains a serious problem, as do two other constraints which are basically technical in nature. The first relates to the large degree of variation resulting from the hybrid seed lines being used by farmers. Performance becomes difficult to predict. Farmers still have to employ sound cultural practices such as shade management, weed control, use of inputs, especially fertilizers, and pruning. Lastly, post-harvest technologies require greater attention. Fermentation of small lots of wet beans by individual farmers results in a highly variable product which is detrimental to obtaining a premier quality cocoa.
Fisheries
42. Both the public and private sectors have focused their attention on the expansion to the sector. This is further being reinforced by the efforts of foreign firms to develop shrimp acquaculture. While supplying
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the requirements of the domestic market, the sector also has had a strong export orientation. Exports of fishery products rose from about US$7 million in 1985 to US$8.5 million in 1987, with 1988 exports at about the latter level. Lobster tails account for about two-thirds of the value of exports. While exports of conch rose by over a fifth in 1988, the volume of exports of crustaceans has declined notably from 1983-85 to 1986-87 while domestic consumption has been increasing. It appears that excessive exploitation of both lobster and conch has been taking place. In the case of lobsters this is reflected by the decreasing average size catch per unit of fishing effort. The depletion of these resources has been taking place despite the existence of an annual quota and a ban on fishing during part of the year. In the shrimp industry, the number of trawlers is excessive.
43. Performance of the industry to date has been mixed. Before it is able to attain adequatp levels of profitability, technical, managerial and financial problems need to be resolved. In the immediate future, however, only modest growth in output should be expected. The fact that fishery products represent few of the commodities with strong prospects of demand growth, suggests that Belize should do its utmost to increase its exports. As a first step, the Government would need to strengthen the Fisheries Unit of the Ministry of Agriculture, which is seriously understaffed and underequipped. In particular, the Unit has to develop the capacity to support private sector efforts in shrimp mariculture and play a more active role in enforcing regulations designed to ensure the rational exploitation of fishing resources.
Forestry
44. This sector, which dominated the economy of Belize for several centuries, has declined considerably in importance. As late as 1967, forest products accounted for 10 of export value. In 1985 they only accounted for 1? of export value (i.e., one million board feet valued at less than US$1 million). By 1987 exports had rebounded to US$26 million and have continued to increase in 1989. To some degree, diversification of exports is occurring as wood manufactures and furniture have tripled their export levels over the past four years to close to US$ 0.2 million in 1987. Forest products exports are dominated by sawnwood. Of this, rough sawn mahogany is the most important, with some dressed mahogany and rough sawnwood of other hardwoods. Mahogany and cedar account for more than 90? of the value of log and lumber exports. On the marketing side, some problems have arisen regarding quality and quantity commitments. Shipping problems also exist, since the only container port is in Belize City, involving high transport costs for the more distantly located mills. The domestic market provides a substantial outlet for the industry's output. Price controls have been in existence for several years and have constrained the expansion of the sector.
45. In recognition of the multiple uses that forestry resources must play, such as conservation, wild life protection and tourism development, together with the lack of expertise in multiple forest management, the Government has decided to establish a Conservation Division within the Forestry Department. It would be responsible for the management of national parks, wildlife management and conservation matters, and would coordinate the work program of the different organizations working in these areas.
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C. MANUFACTURING SECTOR
46. Belize's manufacturing industr, is mostly export oriented. it mainly comprises the production of garments, citrus concentrates and sugar refining. There are also indlcations of some buoyancy in small scale enterprises producing for the domestic market. Since 1985, garments' output has been growing at 192 per year an average. Production of garments expanded by about 402 in 1988 with the establishment of new plants. Despite favorable international prices, sugar production has stagnated because of the reduced availability of sugarcane; citrus coalcentrates have been afferted by adverse weather conditions which have reduced production of oranges and grapefruits.2
47. Prospects for manufacturing are good, mainly because of previous investments coming Into fruition. Investments in the citrus concentrate industry have increased processing capacity and product quality. This, together with the increased acreage planted and elimination of export licensing requirements for citrus concentrates, should enable the industry to expand rapidly over the medium-term.
48. The profitability of the sugar industry hinges on its access to the preferential US and EEC markets. Belize's quota in the U.S. market has been increased in 1989. However, the possibility of its eventual phasing out is still an importanL concern for the eWpansion of the industry. The possible decreae- in the EEC sugar price also clouds the industry's expansion potential. However, as the industry is already marketing a large portion of its production competitively at world market prices and its pricing arrangement for sugar cane takes proper account of world price changes, it should be able to compete in world markets as long as the average of world market and preferential market prices is equal to or higher than its current average cost (i.e., US$0.11 per pound).
49. The garment sector faces increasing labor demand pressures. Currently more than 1,000 workers, most of them female, are employed in the existing plants. Labor demand pressures are also likely to affect the viability of an industrial park being developed in the Belize District. The construction of factory shells has already begun, but garment manufacturers have been unsuccessful in recruiting additional labor. As the pool of suitable workers has been shrinking, labor turnover has been increasing. Another issue involves th': benefits under the CBI. Of six firms producing garments, only two bring their pre-cut materials from the U.S. while the others use other supply sources to take advantage of Belize's location to produce lower priced garments for the U.S. market to avoid quota restrictions since Belize is not subject to a quota under the Multi-Fiber Agreement (MFA).
50. A critical issue in manufacturing is the high cost of electricity. The larger manufacturing companies, however, have been generating their own supply to reduce costs and improve reliability. Although electricity
2/ The overall growth rate for manufacturing as presented in Belize's national accounts is estimated utilizing 1984 weights even though the sector has, since then, undergone significant structural changes. Since the weights of the more dynamic sectors are underestimated, their growth rates are also understated.
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tariffs for low consumption levels were reduced in 1988, the new rates provide monthly savings of only US$5.9 for the industrial consumers. Over the medium-term, electricity tariffs for industrial users (US$0.205 per kwh) could be reduced in the area interconnected with Mexico once the interconnection is completed. This implies that, starting in July 1989, the St. Elena and Corazal areas and, in May 1990, the Orange Walk area will be supplied electricity at a cost to the power company of US$0.03 per kwh lower than its ~.rrent generation cost of US$0.105 per kwh. As the Belize Electricity Board has determined that rates will not be reduced, the interconnection investment will be paid-off in two years.
D. TOURISM
51. Tourism has been evolving rapidly as a growth industry. Tourism receipts increased by 28X in 1988 as a result of both increases in tourist arrivals and an increase in the average length of stay.
52. Growth prospects for the sector are promising, particularly :.ecause of the potential to develop archaeological sites, in addition to the rapidly expanding sun and beach tourism. However, the rate of expansion of the sector will depend on the speed with which additions to the existing stock of hotel rooms is increased to meet the rapidly rising demand. In the Belize District, a total of 280 new rooms for higher-priced tourism are expected to be available by end 1990. However, in San Pedro- -the most important tourist destination--possible expansions in tourist facilities are constrained by inadequate infrastructure. Transport infrastructure for tourism will be improved when additions to the Phillip Goldson International Airport are completed. The airport will then be able to receive direct flights from Europe and provide the facilities for increased tourist arrivals.
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Public Seztor Investment
53. At approximately BZ$69 milllon public sector investment in FY88/89 was similar to the planned level of BZ$67 million. This improvement reflects a strengthening in project implementation. Hovever, there are a number of areas where Government attention is needed to sustain adequate levels of public investment over the next four years. These relate to the staffing of planning departments, classification between capital and recurrent expenditures, finalization of project design, development of a project pipeline for external financing and coordination between the respective ministries and the donor agencies.
Table 6: COMPOSITION OF THE PSIP, FY88/89-FY92/98 (In percent)
FY88/89 FY89/90 FY90/91 FY91/92 FY92/98 AVERAGE
Economic Sv,rvices 68.8 70.6 67.9 76.7 72.5 69.9 Agrlculture, Forestry 17.3 19.7 28.8 40.6 28.6 2a.6
and Fisheries
Manufacturing 9.6 6.1 4.6 0.0 0.0 4.2
Mining 0.6 0.5 0.0 0.0 0.0 0.a
Tourism 0.6 0.6 0.8 0.0 0.0 0.6 Transport and 14.4 80.5 11.7 8.9 11.1 22.4
Communications
Power Supply 7.8 8.0 13.1 0.0 0.0 8.2
Water Supply 9.8 6.8 11.8 26.2 87.6 10.6
Social Services 84.2 24.9 25.0 18.5 20.2 24.8
Education 8.2 7.2 4.7 7.2 9.1 6.8 Health and Sewerage 12.0 12.8 8.8 11.8 1.2 10.6 Housing and Community 16.0 6.4 11.5 0.0 10.0 6.9
Services
General Public Services 1.8 2.2 2.1 2.7 8.5 2.6
Administration and Planning 1.8 0.9 1.1 0.0 0.0 0.9 Public Safety 0.0 1.1 0.6 2.7 8.5 1.4 Other Fixed Investments 0.4 0.2 0.4 0.0 0.0 0.3
Financial Investments 5.2 2.8 5.0 3.1 3.8 8.2
TOTAL PROJECTS 100.0 100.0 100.0 100.0 100.0 100.0
Source: Statistical Appendix, Table 5.4.
54. For the period FY89190 to FY92/93, the public sector investment program (PSIP) has been projected, in accordance with the country's macroeconomic requirements for growth, at some BZ$326 million (US$163
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million). However, the country's core PSIP would total BZ$188 million of which about 872 is schedulled for ongoing projects. Agriculture, manufacturing, mining and tourism comprise 29Z of the projected PSIP, with agriculture individually accounting for 24Z. Projects designed to improve the country's infrastructure and eliminate constraints to diversification, i.e. transportation, water and power facilities, correspond to 412 of the PSIP. Projects for the social services sector, which would help to provide the basic needs of the population, i.e. health, housing and education, account for 242, while public administration and other projects comprise the remaining 62.
55. The composition of the PSIP is consistent with the Government's objectives of providing the policy framework and infrastructure in support of private investment. The emphasis is on the upgrading of the country's Southern and Hummingbird Highways, the constraction and upgrading of bridges throughout the country, the maintenance of the Northern Highway and the IBRD-funded Road Rehabilitation Project. The PSIP also focuses on improving the productivity and foreign exchange earning capacity of agriculture through credit programs, a project for the eradication of the screwworm, marketing programs (i.e., projects for the commercialization of alternative crops); small farmer crop development, and construction of rural access roads and bridges to facilitate efficient transportation of agricultural produce. Projects to foster the expansion of manufacturing and tourism include the enlargement of industrial estates for new manufacturing industries; export and investment promotion projects in tourism, and a line of credit to provide working capital and equipment for industry. The country's social services have also been targeted with educational and health projects under the Basic Needs Trust Fund to contribute to improvements in the q-iality of life, training programs to increase employment and productivity, projects in health management planning and the New Belize City Hospital to strengthen the provision of health services, and community development programs to encourage self-help projects.
Financing of Public Sector Investment
56. Belize'q external financing requirements are based on the medium and long term projections discussed in Chapter IV. External financing requirements during FY89/90-FY92/93 will be determined by the level of domestic resource mobilization. The requirement for public sector investment is estimated to be US$163 million. Scheduled amortization requirements amount to US$32 million for the four year period. Public sector savings and capital revenue are projected to provide approximately US$159 million. Scheduled disbursements under external commitments for ongoing projects would provide US$ 54 million. A financing gap for the four years of US$58 million would remain, of which US$48 million represents financing for new projects for which the Government is seeking donor assistance.
57. Projects with unidentified sources of financing include the San Pedro Airstrip Relocation; Bridge Replacement in Bartom Romie; upgrading of the Belize Municipal Airport; extension of the Water System in Belmopan; Museum Development; and Housing Development.
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Table 7: PUBLIC SECTOR FINANCING REQUIREMENTS, FY89/90-FY92/93 (in millions of BZ dollars)
Total FY89/90 FY90191 FY91/92 FY92193 BZ$ US$
Requirements 121.4 86.6 87.0 95.0 390.0 195.0
Public Investmenta/ 108.8 71.2 70.2 75.8 326.0 163.0 Amortization 12.6 15.4 16.8 19.2 64.0 32.0
Sources 107.0 60.8 49.8 56.1 273.7 136.9 Public Savings 73.5 73.8 72.2 71.0 291.2 145.6 Capital Revenue 6.2 6.9 6.9 6.9 26.9 13.5 Domestic Credit -43.0 -44.1 -37.9 -27.1 -152.1 -76.1 Ongoing External 70.3 24.2 7.9 5.3 107.7 53.9
Financing Gap 14.4 25.8 37.2 38.9 116.3 58.2 Identified External 8.0 8.3 2.3 1.2 19.8 9.9 Unidentified External 6.4 17.5 34.9 37.7 96.5 48.3
a/ Includes projection of the existing pipeline in addition to projects not yet identified.
Source: Statistical Appendix, Tables 5.4 and 9.2.
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IV. ECONOMIC ISSUES AND PROSPECTS
58. The primary economic management and development challenge for the Government of Belize is to both maintain, over the short term, prudent macroeconomic management and, over the medium-term, the momentum achieved in economic growth and diversification of the economy. The public sector's role in this effort centera on two broad policy fronts. First, to continue to improve public investment performance with regard to the economic and social infrastructure, particularly eliminating crit cal bottlenecks, and to ensure that the overall incentive structure is coniducive to efficient resource allocation. The latter requires that demand pressures on the labor market should be alleviated by loosening restrictions on immigrant labor work permits. Second, diversification of agriculture should continue to minimize any adverse effects on banana production and exports which could emerge by the coming on stream of the single EEC market by 1992.
Projection Assumptions
59. The economic projections are based upon a set of assumptions considered to be the most likely ones.
Economic Growth
60. Growth in the economy will be driven by the projected growth of agriculture and tourism. In agriculture, citrus and bananas are the key dynamic commodities since the medium-term growth prospects for sugarcane production are projected to remain weak. However, banana production is projected to remain constant beyond 1991, following the expiration of the Lome Convention. The implicit assumption is that a system of quotas in the EEC market may be introduced to replace the current system. In citrus, an acreage expansion for oranges production of about 601 is projected between 1988 and 1994 with a seven year gestation period based on existing private sector plans. The expansion in acreage, together with the projected increase in yields (from 128 boxes per acre in 1988 to about 250 boxes in 1994) would allow production to increase at an annual average rate of 162 between 1988 and 1998. In grapefruits, acreage is projected to increase by 90Z between 1988 and 1995 while yields are projected to increase from 257 boxes per acre in 1988 to about 325 in 1991. These two factors would inc.ease grapefruit production at an annual average rate of almost 9% between 1988 and 1998. In bananas, acreage is projected to increase by 1152 from 1988 to 1991. Banana production is projected to increase at an annual average rate of 32? between 1988 and 1992 including increases in yields of about 40% between 1988 and 1992. Tourism is projected to grow by 162 per year on average over the medium-term, predicated on increases in the number of arrivals and length of stay of visitors. Over the longer- term, an annual average rate of growth of 6Z is projected. Manufacturing growth prospects are clouded by the weak performance envisaged for sugar production. Moreover, garments production is projected to increase by only 4% per year because of the likely continuation of labor shortages. On the other hand, citrus concentrates are projected to increase at an annual average rate of 112 between 1988 and 1998 in line with the expansion of the citrus industry.
61. The overall projected rate of economic growth has been derived by using 1984 sectoral weights. The economy is projected to grow by about 4? on average in real terms duringl1989-93 as a result of the projected expansion in tourism and agriculture. Beyond 1993, this growth is
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projected to slow down to about 32 per year on average, because of lower projected growth of both sectors.3
62. Exports of goods are projected to grow at an annual average rate of about 7Z in real terms between 1988 and 1994 in reflection of the projected expansion in the production of citrus and bananas. During 1994-98, exports of goods are expected to grow at only 3% per year in real terms reflecting the lack of growth in banana output. Exports of non- factor services in real terms are projected to grow at about 62 per year on average. Real imports of goods are projected to grow at about 6Z until 1994 and at about 4% thereafter.
Table 8: ACTUAL AND PROJECTED MACROECONOMIC INDICATORS, 1988-98
Actual Projected 1988 1989-93 1994-98
Real Growth Rates
Gross Domestic Product 4.5 4.1 3.2 Gross Domestic Income 3.8 4.2 2.8 Consumption 3.5 3.9 3.0
Public 2.7 3.5 2.5 Private 3.8 4.1 3.1
Fixed Domestic Investment 13.2 2.0 3.1 Exports GNFS 12.8 6.7 4.2 Imports GNFS 13.2 5.6 3.8
Shares of GDP (2)
Gross Domestic Product 100.0 100.0 100.0 Gross Domestic Income 106.4 108.0 105.5 Consumption 87.2 86.7 86.0
Public 19.2 19.0 18.2 Private 67.9 67.7 67.8
Fixed Domestic Investment 24.1 23.2 21.5 Exports GNFS 62.5 68.2 73.0 Imports GNFS 73.8 78.1 80.5
Source: Statistical Appendix, Table 2.3 and 9.1.
3/ In 1994, however, 4.6Z growth is projected on the basis of an increase in agriculture output of almost 10 as past investments in citrus come on stream. This also increases manufacturing outpilt by 6Z.
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63. Private investment has been projected on the basis of maintaining a private investment GDP ratio of 12.5Z in constant prices. Public investment is estimated to increase from 11Z of GDP in 1988 to about 14? by 1989. Beyond 1989, public investment is projected to decrease to 9? of GDP. Private consumption is projected to increase at an annual average rate of about 4? over 1989-98. Public consumption is projected to grow at an annual average rate of 3X during 1989-98. National savings are projected to finance between 86? and 100Z of fixed gross investment during 1989-98.
Public Finances
64. Public sector savings are projected to decline from almost 14? of GDP in 1988 to about 102 per year on average during 1989-93 and 6? during 1994-98, as a result (f projected increases in public consumption and of a projected slower growth in public sector current revenues. Public sector savings are projected to finance, on average, about 88? of public investment during 1989-93 and 67Z during 1994-98. The public sector overall deficit is projected to average v.4Z of GDP during 1989-93 and 2.5? during 1994-98.
Table 9: ACTUAL AND PROJECTED BALANCE OF PAYMENTS, 1988-98
(US$ million)
Actual Proiected 1988 1989-93a/ 1994-98a/
Resource Balance -11.8 -4.8 -8.9 Exports GNFS 167.9 252.4 389.9 Imports GNFS 179.8 257.2 398.8
Net Factor Payments -9.0 -15.4 -21.4 Of which: Interest on Public Debt -4.1 -6.1 -10.6 Private Transfers 15.0 17.7 22.4 Current Account Balance -5.8 -2.5 -7.9
Capital Account 24.5 21.2 17.6 Public Capital 12.1 16.6 13.0 Private Capital 12.4 4.6 4.6 Official Grants 7.5 6.6 3.5 Disbursements 14.7 17.6 22.7 Amortizations 5.8 8.4 13.1 Other b/ -4.3 0.8 -0.1
Changes in Reserves -18.7 -18.7 -9.7 (increase-)
a/ Average per year. b/ Includes errors and omissions.
Source: Statistical Appendix, Tables 3.1 and 9.2.
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Prices
65. The deflator for the projections was constructed utilizing price projections of the different GDP components. Prices for the manufacturing, electricity and construction sectors are projected to grow at the same rate as the World Bank's U.S. manufacturing unit value (MUV) index. Prices of the primary sectors have reflected the World Bank's commodity price projections. Prices of services are projected to increase at a higher average rate than the MUV to reflect wage pressures on the price of services.
Balance of Payments
66. Although both the resource and current account balances are projected to be in deficit during the projection period, capital inflows are projected to provide a surplus in the overall balance of payments during most of the period. This, in turn, will meet the increase in the demand for cash balances as the economy expands. The debt service to exports ratio is projected to decrease from 6.4Z in 1988 to 5.9Z by 1998, while the ratio of external debt to GDP is projected to decrease from about 42Z in 1988 to 33% by 1998. As Belize continues to borrow only for high-quality infrastructure investments and avoids excessive credit creation, the country will remain creditworthy for modest amounts of medium and long-term borrowing, particularly from official sources.
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Poge 1 of 6
iEIZE: "MA 1 40N It OJOCTS AND SOURCES OP FINANCING, FY1989/90-1992/93 (UZs 000)
Eaxtrnal Financing Tat%I LocaI External ---------------------
Project Cost Cost I Source Coat
PROJEC TOTAL 250,109 71,905 178.002
ONCOINQ 210.573 64,362 146.014
Agric., Veor.ory and Fisheries 25,662 9,875 26,277
Afri"anisad Bes Mon. & Control 578 376 202 85 CMA Agricultural Reahrc ed Cavsiiopment 460 0 460 100 EDF Beliz- Livestock Developmnt - Phu*. ii 7,660 1,800 5.860 77 USAID Comrcialization of Alternativo Crop- 4.171 475 8,696 89 USAID Grouper Cage Culture Project 293 C 298 100 LSAID Hoalchn Marina Reserve 278 C 278 100 USJWF Land Developen-Acquisition 2,800 2.800 0 0 LOCAL Mapping of Agric. Lani/Forestry 228 50 178 78 UNDP Mountain Pine Ridge Forestry Developxent 991 0 991 100 UK Purchase t Equipment - Forestry 128 128 0 0 LOCAL Regource Mapping 848 0 848 100 INWP Rural Acon Poed and Bridges 9448 1448 8,000 85 USAID Screaora Eradication 7,999 1.000 7,000 88 USAID Sugar offset-Agric. Diversification 1.060 1.060 0 0 LOCAL Sugar Quota Offset - Infrastructure 1,800 1,00 0 0 LOCAL Toledo Agricultural Marketing 1,783 28 1,788 98 USAID Toledo Sell Farsrs Developsent Project 3,887 8ll 3.076 86 IFAD
Tourias 1.394 158 1,241
Caracol Excavotien/Consolidation 791 0 791 100 USAMD Touri; Promotion 603 15 3 450 78 USAMD
Manufacturing 18.931 266 13,665
Export and Investnt PromIon 8S.81 266 8,815 98 USAIO Ladyvill Idustria I Estates Pro!ect 6.,00 0 6,600 100 Coo Second Consolidated Line of Credit 3,650 0 S8.S0 100 CD0
mining 595 lOS 790
Qold Prospecting Program 325 65 260 80 UNDP Petroleum Dev.lpmnt 570 40 S80 98 UWP
EOM%I=C N lllASTWJCTL 98,S40 17,821 75,819
Traneortstion 46,841 9,88 87,006
Airport Facilities 14.402 2.601 11 801 82 CD6 Airport Project - Telecom. Eqpat 2.400 0 2,400 100 oPEC Airport Terminal 8,800 0 8,300 100 UK Bali" City Swing Bridge 2,868 0 2.,6S 100 CHINA
Coastal Road 1.000 1,000 0 0 LOCAL Hu_ingbi-d Highway 8,177 527 4,680 90 EDF "tue. Northern Highwy (10-19) 1,777 1.777 0 0 LOCAL Road Maintenance Unit ll 7,038 1,635 6,400 77 UK Road Rehabi ltation It 8,475 1,695 1,780 51 I8RD TDL Rural Roads 410 100 810 76 UK
Poewor 20,700 5,5C0 15,200
Water 26,299 2,686 28,612
Better Haalth - Water A Sanitation 3,274 1 169 2.105 64 USAID BSe City Water/Sanitation 21,399 1,899 20,000 93 CIDA Village Water A Sanitation 1,091 118 978 69 CARE Water & Sanitation uSS 0 535 100 W41CEF
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BJIZE: MAJOR ONWoIN PROJECTS AND SOURCES OF FINANCIN, FY1989/90-1992/93 (BZS 000)
Extarnal Financing Total Local External ------------------------
Project Coat Cost U Source Cost
|SOCAL SERVICES fi,033 27,190 27,643
Fi;uc"tion 7,571 1,06; 6,510
Central American Scholarships 4,279 0 4,279 100 USAID Education Planning SOO 0 300 103 I1BRD Peace C&rpa Volunteer Programe 600 0 SO0 100 USAID/PEA School Health Education 1I 0 e1 100 LUICEF Training for Employment/Productivity 1,486 236 1,250 84 USAID University Collage of Belize 826 825 0 0 LOCAL
Health 26,807 5,473 21,133
eattor Health - Vector Control 1.882 710 972 68 USAID 8NTF - Health 2.000 0 2,000 100 CD9/USAIM Child Survival Support Prograwme 700 0 700 100 UNICEF Health Management Planning 414 183 231 56 UNDP/PAHO Incresaad Productivity/Health 12,134 2,99S 9,139 76 USAID Integrated Development Program 1,345 0 1,345 100 LMTCeF Maternal & Child Health 682 136 547 88 CARE New Uze City Hoapital 6,950 750 6,200 89 EDF Rapair/14tc, of Medical Bldga 700 700 0 0 LOCAL
Housing and Counity Development 20,655 20,6b5 0
Community Developent 16,320 16,320 0 0 LOCAL Counity Servicee 1,395 1,395 0 0 LOCAL Hoaing Development and Maintenance 2,940 2,940 0 0 LO'AL
GNERAL ADINlISTRATION 9,752 9,752 0
Public Administration 1,220 1,220 0
Computerization SOO 300 0 0 LOCAL MW Equipmnt Sparee 920 920 0 0 LOCAL
Finance 8,832 8,632 0
Investment - Property Equity 3,729 3,729 0 0 LOCAL Lan- to Statutory Bodies 2,443 2,443 0 0 LOCAL Wass Loan Fund 2.360 2,360 0 0 LOCAL
OTHER 5eo 0 b90
_ _ _ _ _ _ _ _ _ _ _ _ _ _ - -- - ------- --- - ------ ---------- ---------- ---------- ---------- ----------
Page 3 of 6
BELIZE: MAJOR NE PROJCTS AND SOURCES OF FINANCING, FY1989/90-1992/93 (BZS 000)
Extornal fi.iancing Total Loca. External -----------------------
Proiect Coat Cost s Source cost
NEW 39,681 7,843 31,988
Agriculture, Forotry 4 Fishing 17,871 3,121 14,746 _ _______________ ------------
Agricultural Credit/Export 0ovelopment 7,189 604 6,88 92 1TRD Lin* of Credit-Ace. Cattle Expansion 2.,24 b24 2.300 81 LlNKNOWN Surveys - ;FAD Project 197 197 0 0 LOAL
iONOMIC INFRASTRUCTIJE 7,468 1,600 6,960
Transportation 6,SO 1,800 4,080
Airstrip Relocation - San Padro 450 0 460 100 UNM Bridg- Replacesnt - sarton Romie/JVrris 200 0 200 100 UNOKOWN Coistruction- 4 Bridges Southern Highway 1,500 0 1,500 100 lUK Hiwkaaorth Bridge Rehab. SOO SOO 0 0L OCAL Reconstruction of Stann Creek Valley Rd. 1,S0 0 1,500 100 UK Southern Hgwy Mtce. Eqpat. 1.200 1,200 0 0 LOCAL Upgrading of BSa City Hun. Airport 400 0 400 100 UNKNOWN
Water 1,918 0 1,918
Calcutta/Carolina Villages Water System 118 0 118 100 UNKNOWN Efteneion-Belmopan Water Systea 600 0 600 100 UNKNOWN Water and Sewerage - San Pedro 1,000 0 1.000 100 QDB/CIDA
SOCIAL SEVICfS 11.074 700 10,374
Education 8.674 400 8.274
1 Primary School/I Practice School 875 0 87S 100 UNOWN Extension Belmopon Junior School S81 0 8S1 100 0DB Conatruction of Belmopan Sixth Form 250 0 250 100 lt404WN Construction of Camelote Prienry School 415 0 415 100 wNe(OWN Developmnt of Archaeological Sites 2,500 0 2,500 100 UNONaWN Extension Belize Junior Secondary #2 875 0 375 100 UNl(NOWN Extension Junior Secondary School #1 461 0 461 100 608 Extension Hopan High School 167 0 167 100 CDO Hopan Tech High School - Eqpat 100 100 0 0 LOCAL -- seum Developoent 800 0 800 100 UNKN(WN Nso Primry School - Belam 100 100 0 0 LOCAL O.W. Tech. Expansion 200 200 0 0 LOCAL Reconatrucxion-Senta Elena Prim. 700 0 700 100 UNKOWN Textbook Project 600 0 600 100 CDA Textbooks for Primary School Children 600 0 800 100 DF Blis- Institute Rehabilitation 200 0 100 100 COD/USAID
Health 1.100 0 1,100
Housing and Community Development 1,800 800 1,000
Housing Developent 1,300 300 1,000 77 UNKNOWN
GENERAL ADMINISTRATION 8,119 2,219 900 _____________________
Public Administration 769 769 0 -_-_-_--- -_-_-_- _ _ _
Construction/Office B;dg-4eol..Ptrol. 250 250 0 0 LOCoL Extension to Ministry Building - NatRes 100 100 0 0 LOCAL Purchaae of Phototypestter 100 100 0 0 LOCAL Purchase of Regal Offast Machine 119 119 0 0LOCAL U.D.C. Building 200 200 0 0 LOCAL
Public Safety 2.850 1,450 900
Equipment and Vehicles - Police 900 0 900 100 JIC Hurricane Sheltere 50 SOO 0 0 LOCAL New Police Stations 600 go 0 0 LOCAL Police Equip.(Radio Network) 150 1EO 0 0 LOCAL Replecesnt of Police Vehicles 200 200 0 0 LOCAL ______________________________________________________________________________________
-28- ANNEX 1Page 4 of 6 pages
bmELZE: riLrc ScOR PV4MTIME PROGRAUME. FY1989/90-1992/93 (8ZS 000)
1989/90 1990/91 1901/92 1992/93
Tot Eat Loe Tot Ext Loc Tot Ext Lac Tot Ext LEo
PROJECTS TOTAL 108a.83 81,070 27,758 49,6s8 35,024 14,661 16S.34 13,129 3.255 13,040 10.440 2.600
ONGOINC 94,419 70,333 24.086 37,000 24,t89 12,811 10,042 7.911 2.131 6,950 5,250 T,ioo
ECONOMIC SSRrCES 21,956 17.437 4,520 9,219 7.351 1,888 2,992 2.411 581 1.600 1,250 350 ____________ ___
Agric., Forestry and Fashelio 15,294 21.02t 4.274 6.514 4.735 1,779 2.042 2,411 581 1,600 1,250 350
A,1nicanised Sess Msr, A Control 238 72 160 222 72 150 0 0 0 0 0 0
AgicvIlturel Research and Oevelopment 1? 152 0 153 153 0 0 0 0 0 0 0
Book, *or Agric. Lbery 0 0 0 r. 0 O 0 0 0 0 C 0
CatralFirm CnVyex 0 0 0 0 0 0 0 0 0 0 0 0
Cennarc alizaticon of Alternative Crops 1,000 750 250 1.550 1,446 11a 1,600 1.250 350 1,600 1,250 350
Comoosite Flour Devlopsent 0 0 0 0 0 0 0 0 0 0 0 0
Conch anngement 0 0 0 0 0 0 0 0 0 0 0 0
Deep Soa Fishing 0 0 0 0 0 0 0 0 0 0 0 0
Grouper Cage Culture Pro;ect 121 121 0 0 0 0 0 0 0 0 0 0
Holchan Marine Reerve 147 14? 0 91 91 0 0 0 0 0 0 0
Land Development-Acquisition 1,000 0 1,000 1.000 0 1.000 0 0 0 0 0 0
Mapping of Agric. Land/Forestry 103 78 25 0 0 0 0 0 0 0 0 0
Mountain Pine Ridge Forestry Oevelopment 366 366 0 500 500 0 0 0 0 0 0 0
Purchase of Equipment - Forestry 110 0 110 0 0 0 0 0 0 0 0 0
Resource Mapping 238 238 0 0 0 0 0 0 0 0 0 0
Rural Acceas Road* and Bridge, 4.700 4,000 700 0 0 0 0 0 0 0 0 0
Screaxore Eradication 4,180 3,839 342 1.231 1.000 231 1,192 961 231 0 0 0
Sugar offuat-Agric. Diversification 950 0 950 60 0 60 0 0 0 0 0 0
Sugar Quota Offset - Infruatructure 467 0 467 0 0 0 0 0 0 0 0 0
Toledo Agricultural Marketing 565 537 28 218 218 0 200 200 0 0 0 0
Toledo Small Farmers COvelopment Project 957 721 236 1,4d0 1.255 225 0 0 0 0 0 0
Tourism 626 532 94 409 409 0 0 0 0 0 0 0
Carecol Excavation/Consolidation 382 362 0 409 409 0 0 0 0 0 0 0
Tourism Pro n 244 150 94 0 0 0 0 0 0 0 0 0
Manufacturing 5,497 5.410 87 2,296 2,207 89 0 0 0 0 0 0
Export and Investment Promotion 1,647 1,560 87 296 207 89 0 0 0 0 0 0
Lady.ille Induatrial Estate. Pr_ject 2.000 2,000 0 2.000 2,000 0 0 0 0 0 0 0
Line of Credit 0 0 0 0 0 0 0 0 0 0 0 0
Second Consolidated Line of Credit 1,e50 1.830 0 0 0 0 0 0 0 0 0 0
Mining 539 474 65 0 0 0 0 0 0 0 0 0
Cold Prospecting Programm 161 138 25 0 0 0 0 0 0 0 0 0
Petroloue Development 378 338 40 0 0 0 0 0 0 0 0 0
ECONOMIC INMASTRuCTURE 47,178 39,964 7,2