EU-Belize cooperation - An end to isolation

by Jose Morgado

Situated at the meeting point of the Caribbean and Central America, Belize is geographically part of the latter, but its culture and language place it in the former. Although it has been a member of the Caribbean Community (CARICOM) since 1974 and of the Organisation of American States (OAS) since 1991, Belize has always been somewhat isolated from both regions and up, to now, it has not fully benefited from the many economic and cultural advantages which such partnerships can bring.

Its small size (22965 km²) and sparse population (9 inhabitants per km²) mean that its internal market is very small, and its per capita socio-economic infrastructural costs very high. This makes it vulnerable to outside forces and dependent on aid from the international community to enable it to cope with the rigours of development and economic growth.

Despite these constraints, it has managed to record some remarkable economic results. During the 1980s, Belize achieved a real GDP growth rate of 10% and kept inflation down to less than 2% on average. Between 1992 and 1994, a period of international economic crisis, a real growth rate of 4% in GDP was maintained with inflation at an average rate of less than 1.8%. This sustained economic growth was achieved thanks to a very tight macro-economic policy, favourable export prices for agricultural products and access to the preferential markets of the European Union and the USA. Privatisation of the banana and sugar industries and of the telecommunications company also contributed to these good economic results.

Keepers of the Maya mystery

As investigations into the causes of the disappearance of the Maya civilisation continue, Belize is coming to be seen as one of the most important centres of this highly developed and dynamic culture and is therefore arousing the interest of archaeologists and tourists alike. Belize also enjoys the benefits of a magnificent coral reef (the second largest in the world) along its coast, numerous keys (heavenly islands of sand and palm trees surrounded by the enchanting sea) and its tropical rain forest, 80% of which has been preserved and which offers flora and fauna the like of which are not seen anywhere else in the world. All these assets make Belize a tropical paradise, whose tourism potential has yet to be promoted and developed.

Like many of the EU's other ACP partners, Belize has to cope with the usual constraints faced by small developing countries. The small size of the internal market very much limits the possibilities for industry to stimulate production. Other problems include the aforementioned high infrastructure cost per inhabitant, dependence on the outside world, limited resources, a fragile environment, and vulnerability to natural disasters (especially tropical storms). Action taken to aid development of the most important sectors, such as agriculture, tourism and the private sector more generally, entails, amongst other things, developing the infrastructure to increase competitiveness. European assistance is geared towards achieving this aim.

The main projects implemented under Lom (1975-1980) involved the construction of three secondary schools and a veterinary laboratory equipped with modem equipment, and the expansion of the international airport. ECU 2 million was also provided towards the construction of the new Belize City Hospital.

The LomI national indicative programme (1981 to 1985) continued to provide assistance for the social infrastructure, and in particular the Belize City Hospital. The existing wood and concrete building, which was 100 years old, was the only large hospital in the country and it did not provide adequate levels of medical care.

Under LomII (1986 to 1990) and the first financial protocol of LomV (1991 to 1995), about 90% of NIP resources were devoted to social and economic infrastructure. The two main projects here are the upgrading of the Hummingbird Highway, the sole road link with the south of the country, which is crucial for the transport of produce such as bananas, citrus and rice, and the continuing work on the hospital. The latter does not just include design and construction, but also covers training of hospital staff, and technical assistance for the Health Ministry to advise on its preparations for the transfer to the new building and for the day-to-day management of the hospital. By the end of 1994,99% of total scheduled assistance (ECU 29 million) had been allocated, and 95% actually spent, the project being 98% complete.

Through the European Investment Bank, Belize has benefited from additional EU assistance in sectors which as a rule do not satisfy the assistance criteria of the European Development Fund. Under the four Lomonventions, the EIB has financed five loans to the Development Finance Cooperation for the promotion of small and medium-sized enterprises and a pilot gold mine project, and two loans to Belize's electricity company. Total EIB assistance amounted to ECU 10.1 million in the period between 1983 and 1994.

Regional cooperation to improve integration

The various Lomaribbean regional programmes offer considerable scope for development but this is one area where Belize has perhaps not been able to maximise the potential of EU assistance. Notwithstanding this, under Lom and 11, the country did benefit from three financing operations amounting to ECU 2.1 million in total which focused on agricultural research projects.

The Belize Government is cooperating with the EU to implement a project intended to preserve and promote the most important Maya monuments in the country (Caracol, Xunantunich, Altun Ha, Nim Li Punit etc.). This project also includes the construction or improvement of access routes, and of small museums on archaeological sites, and the opening of centres offering tourist information services, accommodation and catering under one roof.

Out of the total of ECU 90 million allocated under LomV to the Caribbean Regional Integration Programme (via Cariforum), ECU 2.1 million has been provided for research and technical assistance projects in the fishing sector, management of which is carried out by Belize in its capacity as the regional authorising office.

The political stability of Belize in the violent central American region has attracted some 35 000 refugees and displaced persons from neighbouring countries. These people have been settled throughout Belize for a number of years now. Under LomII and IV, the EU financed four projects, at a cost of ECU 2.5 million, to help improve the living conditions of refugees and to assist them to integrate. There is also a project, costing ECU 0.5 million, which aims to explore ways of preserving the barrier reef and managing the coastline. This was approved in 1992. In December 1994, the EU approved a sum of ECU 1.5 million for a research programme into the conservation of the tropical rain forest. Finally, between 1990 and 1994, the EU financed projects managed by non-governmental organisations to the tune of ECU 1.3 million.

Future work will not just be limited to maintaining the current macroeconomic policy of the government, and establishing a coherent and well-maintained infrastructure. There will also be intensification and diversification of the agricultural sector (in response to food shortages), the promotion of tourism as an important source of income and the development of various aspects of the fishing sector covering such areas as research, training, production and promotion. Finally, there will be support for the private sector, with a particular focus on small and medium-sized enterprises, reflecting the fact that this is a key area for future economic development and growth.

Total assistance to Belize, 1975 to 1994 (in ECU million)