The Lure Of Belize: Uncovering The Country's Main Income Sources

Belize's economy is primarily based on tourism, agriculture, and services, with each sector contributing differently to its income. The country has a developing free-market economy, with a history of stable democratic governance. The average salary in Belize is influenced by factors such as economic stability, the level of education of the workforce, and the prevailing industries. Tourism executives tend to be well-compensated due to the industry's significant contribution to the GDP. Agriculture, including the export of crops such as sugarcane, citrus fruits, and bananas, is a key source of income. The country also has a small domestic market and relies heavily on foreign trade, particularly with the United States, its largest export destination and lead trading partner.

Tourism

Before the COVID-19 pandemic, tourism revenues were even higher, reaching up to $527 billion in sales and contributing 22.08% to the GDP. The internal consumption of travel and tourism in Belize totalled $604.4 million in 2019, showcasing a growing trend over the past decade.

The industry is a significant source of employment in Belize, with 13.4% of total employment directly supported by the tourism sector in 2017. When including indirect jobs, the industry accounted for 37.3% of total employment, or 59,000 jobs.

Belize is an attractive destination for tourists due to its natural and cultural attractions, including its beaches, limestone cave systems, and Mayan and Garifuna cultural sites. The country also has a large market for second-home buyers, and the government has implemented tax and visa policies to encourage foreign retirees to reside there.

The US market is the largest consumer of Belize's tourism industry, with Americans comprising an estimated 70% of all tourists. The country's proximity to the US and the availability of direct flights from major US cities like Los Angeles and Fort Lauderdale have contributed to this dominance.

Belize has also seen growth in arrivals from other countries, such as additional flights from Canada, South American countries, and the addition of direct flights from European cities like London.

The Belize Tourism Board and the government are focused on expanding overnight opportunities for high-end travellers, particularly from the US, and several international hotel chains have announced major construction projects for luxury accommodations.

The tourism industry in Belize offers a diverse range of experiences, including ecotourism, adventure tourism, cultural tourism, and cruise tourism. The development of the tourism sector has also positively impacted related sectors, including real estate, construction, logistics, infrastructure, and finance.

Agriculture

Citrus is the second-largest agricultural industry in Belize, with cultivation concentrated in the southern districts of Stann Creek and Toledo. The Belize Citrus Growers Association provides citrus fruits, mainly oranges and grapefruits, to Citrus Products of Belize Ltd., the main processor. In 2015/2016, grapefruit deliveries surged by 25.3% to 0.7 million boxes, while orange deliveries declined by 4.7% to 4.0 million boxes.

Banana cultivation is also significant, taking place predominantly in the southern districts. In 2015, total banana production fell by 3.8% to 5.4 million boxes due to drought and flooding. Belize exports its bananas primarily to the European Union under the Economic Partnership Agreement (EPA), which allows for duty-free and quota-free trade.

While coconut, cacao, and coffee are produced in small quantities, corn, rice, beans, and sorghum are Belize's largest agricultural products by volume, mainly for domestic consumption. The country's agricultural sector is characterised by a lack of modern equipment and irrigation systems, presenting opportunities for investment and improvement in efficiency and yield.

Exports

Belize's economy is small and primarily based on agriculture, tourism, and services. The country's exports include raw sugar, bananas, citrus fruits, marine products, and crude oil. In 2022, Belize's exports were valued at $399 million, making it the 175th largest exporter in the world. The country exported goods primarily to the United States, the United Kingdom, Guatemala, Spain, and Honduras.

The top exports of Belize are raw sugar, bananas, bran, refined petroleum, and crustaceans. Raw sugar is the country's leading export, generating $81.2 million in 2022. The second-largest export is bananas, which brought in $41.7 million in the same year. Bran, refined petroleum, and crustaceans are also significant exports, contributing $24.8 million, $21.2 million, and $20.2 million, respectively, to the economy in 2022.

In addition to these top exports, Belize also generates revenue from other agricultural products. Citrus fruits, including oranges, are the country's second most important agricultural crop and a significant source of foreign exchange. In 2018, Belize produced 100,000 tons of oranges. The country also produces and exports other fruits, such as papaya, and agricultural products like maize.

Belize has a history of relying on its natural resources for economic growth. In the past, logwood was the country's initial main export, used for making dye. However, as Europeans developed less expensive man-made dyes, the industry declined. Loggers then turned to mahogany, which was prized for its use in furniture and ship construction. While the mahogany industry brought wealth to many merchants and traders, it also faced challenges due to the slow growth rate of the trees and the increasing labour costs associated with harvesting them.

Today, Belize continues to face challenges in its export sector. The country's trade deficit has been growing due to low export prices for commodities such as sugar and bananas. Additionally, the agriculture sector, which is critical to the country's economy, faced setbacks in 2018 due to diseases that reduced the production of citrus fruits and shrimp. Despite these challenges, Belize's exports continue to play a vital role in its economy, contributing to its growth and development.

Services

Tourism is the largest service sub-sector and the number one foreign exchange earner for Belize. In 2017, it directly contributed 15.0% of the country's total GDP, accounting for USD $277.7 million. The total contribution of the travel and tourism industry, including jobs indirectly supported by the industry, was USD $766.8 million, or 41.3% of GDP in 2017. This number was expected to rise by 4.6% to USD $1,250.7 million, or 54.0% of GDP, in 2028. The industry directly contributed to 13.4% of total employment, accounting for 21,000 jobs in 2017. The total contribution by the travel and tourism industry to employment, including indirect and induced effects, was 37.3% of total employment (59,000 jobs) in 2017. These numbers were expected to rise by 3.9% by 2028.

The growth in tourism is partly due to an increase in cruise ship arrivals. In 2018, there were 1,208,137 cruise ship visitors to Belize, a number that has been growing significantly since 1998. However, cruise ship arrivals have seen a reduction of 3.1% in 2019, attributed to 21 fewer cruise calls than the previous year, 12 of which were cancellations in December, normally a peak period for tourism. The Belize City port, in particular, saw an 8.8% reduction in visitors. Despite this, the total number of tourists visiting the country has been increasing, with a net increase of 2.8% from 2018 to 2019. This growth can be attributed to additional flights from Air Canada, West Jet, and COPA Airlines, facilitating more visitors from South America and the addition of direct flights to and from cities such as Los Angeles and Fort Lauderdale.

The hospitality industry has responded to the upward trend in tourism, with the total number of rooms available in the country increasing from 8,435 to 8,853 from 2018 to 2019. The number of hotels also increased by 70, making a total of 953.

The travel sector is the most important service export in the tourism industry, accounting for approximately 70% of Belize's total service exports since the 1990s. This sector includes transport and storage, post, and telecommunications services. In 1992, the sector contributed 9.6% towards annual GDP growth, but by 2008, this had decreased to 1.7%.

Belize receives three types of visitor arrivals: stopover arrivals (overnight visitors), same-day visitors (mainly from bordering countries such as Guatemala and Mexico), and cruise ship passengers. The US market is the largest consumer of the Belizean travel industry, accounting for approximately 62% of Belize's stopover arrivals in 2006.

Foreign investment

Belize has the smallest economy in Central America, with a GDP of US$3.1 billion in 2023. The government encourages foreign direct investment (FDI) to relieve fiscal pressure and diversify the economy, and there are no restrictions on foreign ownership or control of companies. However, foreign investments must be registered with the Central Bank of Belize and adhere to the Exchange Control Act and related regulations.

While the government is interested in attracting FDI, bureaucratic and regulatory requirements, such as land insecurity, bureaucracy, delays, and corruption, impede investment and growth. Additionally, the small population of the country, high cost of doing business, high public debt, insufficient infrastructure, and corruption constitute investment challenges.

The Belize Trade and Investment Development Service (BELTRAIDE) is the investment and export promotion agency, providing FDI through various incentive packages and identified priority sectors for investment. These sectors include agriculture, agro-processing, fisheries and aquaculture, logistics and light manufacturing, food processing and packaging, tourism and tourism-related industries, business process outsourcing, and sustainable energy.

To be eligible for government-sponsored business incentives, small and medium-sized enterprises (SMEs) and tour operators must have 51% local ownership. Additionally, some investment incentives, such as tour operator licenses, require majority ownership by Belizeans or permanent residents.

Belize's financial system is small, with little to no foreign portfolio investment transactions, and the country does not have a stock exchange. The banking sector is stable but fragile, with high lending rates that constrain economic growth.

Despite these challenges, Belize's regionally high per capita GDP, political and currency stability, bilingual population, and developing infrastructure provide some investment opportunities. The country's primary exports are citrus, sugar, and bananas, and tourism is a major source of foreign income.

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