Belize - Economic development
The government has opted to concentrate on developing agriculture, livestock, forestry, fishing, and tourism as foreign exchange earners. The main sources of bilateral aid are the United States and the United Kingdom; of multilateral aid, the United Nations (UN), Caribbean Development Bank (CDB), Organization of American States (OAS), and the Inter-American Development Bank (IDB). Belize joined the OAS and IDB in 1992 in a move to increase its access to developing financing and external technical cooperation.
Belize undertook several fiscal adjustment measures in 1996, including the retrenchment of the public sector work force and the introduction of a major value-added tax (VAT) of 15%. These two measures caused an increase in annual inflation from 3.2% in 1995 to 4.7% in 1996 and an increase of 1.3% in the rate of unemployment, to 13.8% of the labor force.
The National Development Strategy 1996–2000 drafted by the Ministry of Economic Development stressed fiscal restraint, and identified activities to stimulate private sector development, including physical infrastructure improvement and financial sector reforms.
The inflation rate was at 0.5% in 1998, but unemployment was still at 13%. The VAT was replaced with a lower sales tax, and the financial services industry was reformed to encourage foreign investment. Major capital projects were underway to improve roads and build homes, but were moving at an extremely slow pace.
A rural electrification project was underway in 2001–02, and the government pledged $20 million to restore essential services such as health and education facilities and transportation networks to communities harmed by Hurricane Keith. The government is investing in projects to alleviate poverty. In 2002, the government was implementing an IDB-funded project to improve the competitiveness of the country's agricultural products in foreign markets. The country aims to promote the growth of commercial agriculture through Caribbean Community and Common Market (CARICOM) although most of its trade is conducted with the United States and Europe, not with other Caribbean nations. Tourism averaged 20% of gross domestic product (GDP) from 1997–2001, and the industry was adversely affected by the September 2001 terrorist attacks on the United States and the subsequent decline in tourism to the region.