Belize
Executive Summary
Belize
is centrally located in the Americas
Belize
is an independent country within the Commonwealth
bordered by Mexico, the Caribbean and Guatemala
to the east and south. It is 24,000 sq km
in size, with a population of 275,000. The
country is, or was, heavily forested. The
climate is nearly tropical, and there can
be hurricanes. The extremely mixed population
is racially harmonious. English is the official
language and the main religion is Christianity.
The currency is the Belizean dollar, fixed
at BZ$2 = US$1.
Sugar
and bananas represent a difficulty for the
centrist Government . . .
In
Belize's bi-cameral Westminster-style government,
the lower house was most recently elected
in 2003 and the government is tackling economic
problems caused reduced access to privileged
markets for sugar and bananas by encouraging
foreign investment in manufacturing and
the development of mass tourism. The country's
structural deficit can only be financed
by overseas borrowing, but the Government
hopes for debt relief for existing loans.
GDP growth was 3.1% in 2005.
In
October 2004, the government began implementing
a significant tightening of fiscal policy.
This has resulted in a reduction in the
country’s overall deficit to 3.1%
in fiscal year 2005/2006.
By
August 2006, Prime Minister Said Musa announced
that the servicing of the country's debt,
which accounts for 90% of its GDP, was "no
longer a viable option" on existing
terms, leading to a rearrangement of Belize’s
US$900 million external debt stock.
.
. . and foreign pressure may hold back offshore
development.
Internal
Belizean taxes are moderate, with a small
turnover-based tax in addition to 25% corporation
tax. Employees pay up to 45% tax on income
plus social contributions. There is a variety
of offshore schemes, including IBC legislation,
a modern trusts law, and an array of free
zones and investment incentive schemes.
Belize offered 'economic citizenship' until
the program was cancelled in 2002, and there
is a retired persons regime. International
pressure on Belize to moderate its offshore
regime in exchange for debt relief seemed
to have slackened in 2003.
The
business environment is quite good, but
e-commerce lags.
Telecommunications
are state-of-the-art, but too expensive
because of the telecommunications monopoly
which is holding back development. Recent
moves to open up an e-commerce free zone
may have come too late for Belize to catch
up with more advanced jurisdictions. Air
and sea communications are both good, and
it may be that Belize's immediate offshore
future lies more in expanding its effective
and popular free zones than in other directions.
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