The Wealth Paradox Of Belize: A Country Of Contrasts

Belize is a small country in Central America with the smallest economy in the region. It has the third-highest per capita income in Central America, but this figure masks a huge income disparity between rich and poor. The richest person in Belize is Huang Maoru, closely followed by Kenneth Dart, who leads in the finance and investment sector. The country's economy is primarily based on agriculture, tourism, and services, with tourism being the number one foreign exchange earner. The government of Belize has sought to preserve the country's natural beauty and resources while encouraging tourism and immigration. While Belize is not the wealthiest country, it has a dynamic billionaire landscape with visionaries from diverse industries shaping its economic prosperity.

Belize's billionaires

Belize has the third-highest per capita income in Central America, but there are still huge income disparities between the rich and poor. The country's billionaires include Kenneth Dart, who tops the list with a net worth of $5.66 billion, made in the finance and investment sector. Lukas Lundin, a Swedish businessman with a net worth of $2.5 billion, also features on the list. His company, the Lundin Group, is involved in mining for metals, diamonds, and oil, with corporations scattered across the world.

In May 2024, Huang Maoru was named Belize's richest person, but no net worth figure was given. Jasmine Hartin, the daughter-in-law of British billionaire Michael Ashcroft, also has ties to Belize. She made headlines in 2021 when she was charged with the manslaughter of a top Belize police officer, San Pedro Superintendent Henry Jemmott.

Income disparity

Belize is a small country in Central America with a population of around 360,000 people. It has a developing, private enterprise economy that is primarily based on agriculture, tourism, and services. While it is considered an upper-middle-income country, with the third-highest per capita income in Central America, Belize faces significant income disparity, with a large gap between the rich and poor.

The average monthly salary in Belize ranges from BZ$2,500 to BZ$3,000 for skilled workers, but this varies depending on factors such as job role, experience, qualifications, and location. Urban areas, particularly Belize City, tend to offer higher salaries due to a greater concentration of businesses and higher costs of living. The tourism, agriculture, and service sectors are significant contributors to the nation's income and play a crucial role in shaping wage levels.

Despite its economic growth and integration with global politics and trade, Belize struggles with high poverty rates. Approximately 43% of the population lives below the national poverty line, with 16% facing extreme poverty. The slow-growing economy, high debt repayments, and income inequality hinder efforts to reduce poverty. The government aims to address these challenges by focusing on accelerating national income growth and reducing the wealth gap.

Belize's economy is susceptible to external market changes, particularly fluctuations in world commodity prices. Its primary exports include citrus fruits, sugar, bananas, seafood, and crude oil. The country's trade deficit has been growing due to low export prices for sugar and bananas, and it faces a growing trade imbalance. Additionally, Belize's heavy reliance on foreign trade, particularly with the United States, makes it vulnerable to external economic factors.

To stimulate economic growth and address income disparity, Belize has received aid from Official Development Assistance (ODA) and Foreign Direct Investment (FDI). The government has also implemented expansionary monetary and fiscal policies, which led to GDP growth averaging nearly 4% between 1999 and 2007. However, more recent years have seen slower GDP growth, with a decline to 1% in 2015 and 0% in 2016.

Foreign exchange earnings

Belize's economy is primarily based on agriculture, tourism, and services. The country's economy is susceptible to external market changes, and it relies heavily on foreign trade with the United States as its top trading partner.

Tourism is the leading industry in Belize and the number one foreign exchange earner in this small economy. The country attracts visitors with its stunning beaches, lush rainforests, and ancient Mayan ruins. The tourism industry provides employment to a large number of Belizeans and generates substantial foreign exchange inflows, contributing significantly to the country's economic growth.

The agricultural sector is another vital source of foreign exchange earnings for Belize. The country's primary exports are citrus fruits, sugar, bananas, and seafood. Agriculture employs a significant portion of the population and contributes to both domestic consumption and export revenues.

Belize's offshore financial services sector has also emerged as a significant contributor to the country's economy, bringing in valuable foreign exchange. With favourable laws and regulations, Belize has become an attractive destination for international businesses and investors seeking to establish offshore entities.

Other sources of foreign exchange earnings for Belize include the export of crude oil, marine products, and apparel. The country's exports also include clothing, fish products, molasses, wood, machinery, transport equipment, manufactured goods, fuels, chemicals, pharmaceuticals, food, beverages, and tobacco.

Belize's trade deficit has been growing due to low export prices for sugar and bananas, and the country faces challenges in maintaining economic stability. The government has promised rapid action to improve tax collection, but a lack of progress in controlling spending could put pressure on the exchange rate.

Economic sectors

Belize has a small, developing free-market economy that is primarily based on agriculture, tourism, and services. The country's economy is susceptible to external market changes, and it faces challenges due to its reliance on foreign trade, particularly with the United States, its largest trading partner.

Agriculture

Agriculture, including forestry and fishing, is a significant sector in Belize's economy, contributing 7.69% to its GDP in 2021. The country has about 8,090 km2 of arable land, but only a small fraction of this is under cultivation. Citrus fruits, sugarcane, and bananas are the main agricultural crops and primary exports. Other agricultural products include maize, rice, soy, papaya, and habanero peppers. Belize's economy previously depended heavily on forestry, with logwood and mahogany as its main exports, but this shifted in the 20th century due to the destruction of forests and price fluctuations.

Tourism

Tourism is the fastest-growing source of income for Belize and the number one foreign exchange earner. The country's natural attractions, including the Belize Barrier Reef, offshore islands, abundant wildlife, and Mayan ruins, support a thriving tourism and ecotourism industry. In 2011, tourist arrivals totalled 888,191, mostly from the United States, and tourism contributed 12.0% of Belize's GDP.

Services

The services sector is the largest contributor to Belize's GDP, accounting for about 61.83% in 2021. This includes industries such as hotels, restaurants, leisure, travel agencies, airlines, and other transportation services.

Industry

Industry, including manufacturing, contributes approximately 16.78% to Belize's GDP in 2021. Manufacturing activities include food products, fertilisers, and textiles. The discovery of oil in Spanish Lookout has presented new opportunities and challenges for the country's economy.

Economic outlook

Belize's economy is small and primarily based on agriculture, tourism, and services. The country has the third-highest per capita income in Central America, but this figure masks a huge income disparity between rich and poor. Tourism is the number one foreign exchange earner, followed by exports of sugar, bananas, citrus fruits, marine products, and crude oil. The economy recorded average annual growth of 2.8% in the decade to 2022, with services accounting for 76% of overall GDP in 2021.

Belize's economic outlook is positive, with annual economic growth doubling to 10% in Q1 2023, driven by a rebound in the industrial and services sectors. Construction and electricity output returned to growth, and the downturn in mining activity softened. The services sector benefited from expansions in the transport, wholesale, and retail trade subsectors. However, agriculture output contracted due to lower citrus production.

Looking ahead, Belize's economic activity and inflation are projected to moderate. Real GDP growth is forecast at 3.0% in 2023, as tourism activity returns to pre-pandemic levels and the business process outsourcing sector continues to develop. Average inflation is expected to moderate to 4.1% in 2023 and 1.2% over the medium term, in line with the projected decline in global commodity prices and inflation.

The current account deficit is projected to rise to 8.5% of GDP in 2022 due to higher imports, larger profit repatriation, and lower remittances. However, it is expected to fall gradually as commodity prices decline and tourism recovers. These deficits are expected to be financed by foreign direct investment and multilateral and bilateral loans, with international reserves staying above three months of imports during 2023-2028.

Belize's economic outlook is also impacted by its vulnerability to external market changes, including fluctuations in world commodity prices and preferential trading agreements. The country's dependence on energy imports and susceptibility to natural disasters, such as hurricanes, also pose risks to its economic stability.

To stimulate economic growth, the Belizean government has set several key policy priorities. These include gradually increasing the primary balance to 2% of GDP to lower public debt, raising expenditure on infrastructure, targeted social programs, and crime prevention, implementing structural reforms to boost growth and resilience to natural disasters, and improving the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework.

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