by Ed Eng
Belize is home to a very functional democracy, with great emphasis on order, education, and the inclusion of all social classes in one democratic process. The country is a good example to its regional neighbors, able to carry out peaceful, cooperative elections, with a strong emphasis on participation. This political stability has contributed greatly to the country’s positive relationships with regional neighbors and with countries around the world. The stable and cooperative nature of Belize and its economy make for a healthy cooperative environment. However, in order to attract high-growth startups and investments to the country, the Belize government should consider adopting alternative approaches to bring in new investment, develop a robust pipeline of skilled workers, and grow the middle class. This paper will begin with an environmental scan to assess strengths and opportunities in Belize, followed by a discussion of the main leadership challenge facing the government, and finally, a set of proposed recommendations for policy changes and action plan to strategically grow the economy.
2. Environment of the issue (SPELIT)
In this section, I will be using the SPELIT Power Matrix as the framework for my environmental analysis to assess the strengths and opportunities for change. This methodology was chosen over other tools because it includes a focus on the human dimension as well as other strategic factors (Schmieder-Ramirez & Mallette, 2007).
There are distinct degrees of socioeconomic inequality based on wealth, power, and status. This unequal standing is further stratified according to skin color and ethnicity. At the top echelon, there are lighter-skinned Creoles, mestizos, and newly arrived North Americans, East Indians, and Middle Easterners. These higher-level groups retain control of the two political parties and the retail trade sector. At the lower levels, there are darker-skinned Creoles and Garifuna who are largely unemployed. The Maya and Garifuna display the enduring character traits of the indigenous people. The Maya are subdivided into the Mopan and Ketchi peoples. Both groups have exorbitantly high levels of poverty and participate insignificantly in the political and socioeconomic realms. The violent crimes that happen most often are murder, manslaughter, and rape. The most widespread property crimes are robbery, burglary, and theft (“Culture of Belize – history, people, women, beliefs, food, customs, family, social, marriage,” n.d.).
Belizeans in urban areas expect the government to assist them in raising their children and support early education. In contrast, child rearing in rural communities is aided by family and relatives. By statue, a child has to attend primary school up to age fourteen. However, only 40 percent of primary school students progress on to secondary schools because of poor test performance in the national school examination and for lack funds for tuition fees and textbooks. Overall, less than 1 percent of the population qualifies for higher education. A national university that was commenced in 1987 only offers a limited number of programs and has fewer than 500 students (“Belize School System – Flags, Maps, Economy, History, Climate, Natural Resources, Current Issues, International Agreements, Population, Social Statistics, Political System,” n.d.).
Belizeans use the healthcare systems in Guatemala and Mexico for medical services because of the insufficiency of health facilities and inadequacy of trained professions to deliver quality services. Many locals also turned to old-fashioned remedies like plants and other and inherited rituals (“Healthcare in Belize – International Living Countries,” n.d.).
The government is ratified by a parliamentary democracy and exercises the executive, legislature, and judiciary branches of authority. However, the political parties have essentially eliminated the power of the legislature in preference for a cabinet of ministers. The two main parties are the Peoples United Party and the United Democratic Party and both draw support across all ethnic groups and social classes. All members of the government foster openness to the public and encourage their constituents to engage with them (“Belize POLITICAL DYNAMICS – Flags, Maps, Economy, History, Climate, Natural Resources, Current Issues, International Agreements, Population, Social Statistics, Political System,” n.d.).
The national army supplies protection against Guatemala, which in the past, has threatened to invade the country and claim its stake of Belizean territory. The army also provides drug prohibition efforts and aids in disaster endeavors. The police force is the first line of defense against all crime. However, the police are perceived to be only active in urban communities and the limited number of villages with police stations (“Culture of Belize – history, people, women, beliefs, food, customs, family, social, marriage,” n.d.).
The services industry is the largest sector in the country, contributing a total of $718 million in 1996, equivalent to 57 percent of the gross domestic product (GDP). The dominant industry in the private sector remains agriculture, with fishing and logging in a distant second and third respectively. The government promotes international trade and encourages export of food production in the country. The main food items of sugar, citrus and bananas accounted for 86 percent of exports in 1996 and made up almost 80 percent of foreign exchange earnings (“Culture of Belize – history, people, women, beliefs, food, customs, family, social, marriage,” n.d.).
However, the prevalent heritage of colonialism in the modern economy is displayed in the large holdings of land owned by foreigners for real estate speculation. This near-monopoly resulted in only 15 percent of the land left are available for agriculture purposes. The government has never had a comprehensive land development and reallocation policies (“Belize GROWTH AND STRUCTURE OF THE ECONOMY – Flags, Maps, Economy, History, Climate, Natural Resources, Current Issues, International Agreements, Population, Social Statistics, Political System,” n.d.).
The judiciary system is a leftover of the British system, and appeals can still proceed as far as the Privy Council in London. Locally, the formal functioning of the system is at risk due to a lack of judges, law administrators, and prosecutors, resulting in a logjam of cases (“Culture of Belize – history, people, women, beliefs, food, customs, family, social, marriage,” n.d.).
Christianity is the main religion in Belize. Most of the people are Roman Catholics or Baptists. There are also some Moslems and Hindus. The authority of churches comes from State laws, which allows for the legal incorporation of churches, thus freeing them from paying taxes. Ministers are state-sanctioned marriage officers, and the state anoints them to co-manage the majority of primary schools (Gregory, 1975).
Artists make a living by selling their works at exhibitions supported by wealthy Belizeans who display art for their private pleasure. The National Arts Council also promotes training and the display of various forms of art. Foreign scientists from North America do almost all the scientific research in the country. Studies in the fields of Maya archaeology and natural history are major contributors to understanding the significance of Belize within the subregion. There is a potentially rich source of oral literature, but very few are preserved in writing. The best graphic arts are painting and sculpture that build on a rich practice of the use of wood. International plays are performed in schools and sporadically for the public (“Culture of Belize – history, people, women, beliefs, food, customs, family, social, marriage,” n.d.).
Belize Telemedia Limited (BTL) monopolized telecommunication services at excessive rates in the eighties and nineties. To encourage competition, the government assisted Speednet in getting its licenses to operate in Belize as an alternative provider in 2005. In a relatively short time, Speednet became the choice of Belizean professionals with its lower rates, better service, and less bureaucratic structure. In 2009, the Belize government nationalized BTL, which is now the main competitor of Speednet. Both companies now offer a full range of telecommunication services including dial-up and high-speed internet access, cellular roaming, and other basic telephone services (Breaking Belize News, 2015).
3. Leadership Problem Statement
To compete in a global economy, investing in higher education and equipping citizens with training to compete for jobs in emerging sectors are essential to a nation’s prosperity. However, the lack of reliable broadband infrastructure and limited social mobility has left Belize vulnerable, with unrealized potential. Belize’s lack of readiness for the digital economy is further crippled by their lack of higher educational system, resulting in a lack of skilled workforce. While the government of Belize has committed to raising the standard of living for locals and attracting foreign investments, they have not been able to draw the growth sectors that have spurred jobs and transformed economies. The problem statement then becomes what can the Belize government do to attract the growth sectors that have spurred jobs and transformed economies in other emerging countries? In the following sections, I will be recommending a growth strategy using Uber as an economic partner guided by relevant economic theories and conclude with an action plan for implementation.
4. Recommendations for Policy Changes
The Belize government should consider adopting the following policy changes to develop a robust pipeline of skilled workers, attract foreign investments, and grow the middle class to enhance the overall quality of life for the citizens of Belize.
Adopt a new labor law for foreign investors.
Pass a law that requires foreign investors to hire 20 percent of workers locally in an apprentice program. This is similar to the United States’ “First Source” program, based on the principle that private companies that receive public dollars should help local residents find work. This policy would create an ecosystem that would expand the labor force and strengthen its culture through a more productive workforce.
Attract strategic partnerships.
Belize needs a strategic partner who is willing to invest in developing countries. Uber, with all the well-publicized toxic culture of sexual harassment that ultimately led to the ouster of its Chief Executive Officer (CEO), is also famously known for its appetite for risk-taking, even at the expense of taking a loss just to be the first to market in areas of high growth (Dickey, 2017). This propensity to accept a risk to be the pioneer in a country fits in well with the Belizean economy and hard-working citizens of Belize. Being the pioneer and leader in a new strategic location is considered a competitive advantage to Uber and Belize should take advantage of this risk-taking culture.
Reconceptualize the Belizean education system.
From a long-term perspective, Belize must adopt the worldview toward education that a degree from a four-year university is considered higher education. The current educational system In Belize regards a high school education a successful gateway to the workforce. While this might be the norm in Belize, it is not creating a work-ready workforce to compete globally, or access opportunities to advance. The middle class already values education; the government needs to invest more in education and to build the human capital infrastructure to redefine the middle class and take advantage of new investments coming into Belize.
Private-Public Partnerships (PPP).
To attract these high-growth sectors to Belize, the Belize government must intervene and provide the necessary incentives for these companies to invest in Belize. This view is consistent with the Keynesian Economic Model which supports the view that government is in a better position than market forces when it comes to creating a robust economy. Government spending would increase consumer demand in the economy, leading to added business activity and even more spending, which would, in turn, increase the overall economic activity, the natural result of which would be deflation and a reduction in unemployment (Mell & Walker, 2014).
Building large scalable sectors in Belize require a strong strategic partner who is willing to invest in developing countries. This perspective is compatible with the Endogenous Growth Theory, which postulates that that improvements in productivity can be tied directly to faster innovation and more investments in human capital. As such, they advocate for government and private sector institutions to nurture innovation initiatives while offering incentives for individuals and businesses to be more creative. Under this theory, knowledge-based industries play a particularly important role — especially telecommunications, software and other high-tech industries as they are becoming ever more influential in developed and emerging economies. A key tenet to the endogenous growth theory is that there are increasing returns to scale from capital investment especially in infrastructure and investment in education and health and telecommunications (Mell & Walker, 2014).
Uber, with all the well-publicized toxic culture of sexual harassment that ultimately led to the ouster of its Chief Executive Officer (CEO), is also famously known for its appetite for risk-taking, even at the expense of shareholder profits just to be the first to market in areas of high growth. This propensity to accept a risk to be the pioneer in an emerging country fits in well with the hard-working citizens of Belize. Being the pioneer and leader in a new strategic location is considered a competitive advantage to Uber and Belize should take advantage of this risk-taking culture. This is similar to the Ricardian Model of Comparative Advantage, used to explain why countries engage in international trade even when one country’s workers are more efficient at producing every single good than workers in other countries (Mell & Walker, 2014). In Uber’s strategic plan, being first to a market means having a comparative advantage in that country. With its innovative culture and willingness to invest in emerging countries even in money-losing situations, Uber also has the cash and technology to uplift and transform the Belize economy by expanding this middle class. An industry cannot grow without an active and skilled workforce. The government must work in unison with Uber to welcome, support and promote its entry into Belize.
This private-public partnership is supported by the Linear Stages of Growth Model, which posits that an injection of capital, creating superior technology, and growing the labor force lead to economic development and industrialization (Mell & Walker, 2014).
5. Action Steps
The Belize government can first create the incentives to attract Uber by outsourcing its fleet of public buses. Most of the middle class rely on public transportation to get around in the city. It is the cheapest form of transportation to go from point A to point B in the quickest time. The buses current used for public transportation are old, converted school buses. The Belize government can allow Uber to be the exclusive operator of the buses in exchange for Uber’s investment to replace all the buses with state-of-the-art new ones and a sum of cash to be used for loans to support nascent small businesses, and train workers in specialized jobs in emerging sectors.
Step two of the implementation is a two-step phase process focus on growing a robust pipeline of skilled workers. To tap into one of the most important growth sectors in the country-tourism, the government can allow Uber to convert all taxi-drivers to Uber contract drivers as long as that on an hourly basis; the Uber drivers will be making more than what they were earning previously as a taxi driver. With Uber’s GPS and on-demand technology, more taxi drivers will be mobilized, saving on gas, and total earnings will be higher, resulting in higher output. Currently, the taxi association was formed by the taxi drivers to give them a form of structure and rights; Uber can help them create their own management structure and teach them about maintenance and other skilled trades in the public transportation arena using Uber’s technology.
Finally, the working class of Belize is large, diverse and included the traditional middle class made up of civil servants, skilled manual workers, taxi drivers, and other commercial employees unified by a belief system that emphasized cultural uprightness, upward social mobility, and the importance of education. Uber can rebrand its name in Belize to “Uber Ya Da Fu We” (We the People), to rally the Belizeans around the partnership, and show off the Belizean pride to the rest of the world.
For Uber, once the brand is accepted by Belize, they can expand their product lines such as Uber X for the wealthy, VIPs and dignitaries, and lock out any future competitors coming in and replicate the model in other emerging countries.
While the goal is to help every emerging country compete on a world stage, I want to begin by helping Belize adopt economic policies that could potentially transform their economy and improve the quality of life of its citizens. By doing research on Belize, gathering information by talking to various Belizeans, and reflecting on my international experience, I felt in love with the Belizean culture especially the pride they have for their country. This international policy class has enriched my life through an experiential, hands-on approach. The cultural interaction with the Belizeans has given me meaning for what it means to serve and affect a community.
Nation building is a community project. I hope to come back to Belize in the near future and contribute by donating my time and expertise to improve the quality of life for its people.
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