GOVERNMENT POLICY

Economic Diversification

The narrow base of the national economy was recognized as a problem by the Belizean government after the sluggish growth of the early 1980s. In response, the government started a comprehensive program during the second half of the decade focused primarily on eliminating export biases and creating a favorable environment for investment, both foreign and domestic, especially in the nontraditional export sector. The creation of a favorable environment for investment meant eliminating internal and external imbalances and upgrading infrastructures. This process was facilitated by external incentives such as the United States Caribbean Basin Initiative. The private sector reacted positively to these changes, and economic growth took off.

The Belizean economy was still insufficiently diversified at the beginning of the 1990s, but major changes in the composition of GDP and exports had provided a basis for sustained growth. The two major changes in the GDP took place in agriculture and tourism. Agriculture declined from a 20 percent share of GDP in 1980 to a 15 percent share in 1990, whereas tourism expenditures increased from a 4 percent share to a 9 percent share.

The percentage share of each crop within the agricultural sector gave further evidence of how the composition of GDP was changing. Sugar-export receipts had lost half their share of exports by 1990, whereas tourism had tripled its portion, to the point where it nearly equaled receipts from sugar exports. Citrus products also had made remarkable progress, almost doubling their share of exports by 1990. The share of GDP provided by bananas increased, although less steadily.