And while there is still modest GDP growth, economic historian Victor Bulmer Thomas looks at another metric: GDP per employed person.
In his paper presented at the University of Belize earlier this week he found that the Belizean workforce is becoming less productive. And it begins with investments somehow not leading to increased productivity. Jules Vasquez has part two of his story:
In the last budget we were told that that foreign direct direct investments was at an all time high:
John Briceno, Minister of Finance:
"And foreign direct investment has totalled $1.12 billion over the four year period January 2021 - September of 2024. Over a billion dollars, never before in the history of Belize."
But Professor Emeritus Victor Bulmer Thomas says something's broken in Belize's investment model - because of what he sees in another metric: GDP per employed person:
Dr Victor Bulmer Thomas, Professor Emeritus, LSE:
"This is the GDP per employed person, and you can see this downward trend and then thank goodness a little boost after the first year of COVID. But the downward trend is pretty clear. Now, that suggests that's something's gone wrong with the investment process because you should really be getting more GDP per employed person if the investment process is working well."
So, while the economy is stagnant, and GDP per employed person is down, counterintuitively, imports per head have gone up:
Dr Victor Bulmer Thomas, Professor Emeritus, LSE:
"over this period of stagnation for the last twenty odd years, imports per head have actually risen. And the share of imports in GDP has also risen. Now that shouldn't have happened. Because if you're a stagnant economy then you would have expected imports per head to be the same."
So, what explains it? Bulmer Thomas points to the most likely culprit: growing inequality:
Dr Victor Bulmer Thomas, Professor Emeritus, LSE:
"And there are various possible reasons why this might come about. But, to me the most likely is a shift in income distribution and wealth inequality towards the richest people in the country."
"But my hunch is that there has been in the last twenty years a big increase in income and wealth inequality."
And one way to start reversing this is more public spending on the poor, but where would the money to do this come from?:
Dr Victor Bulmer Thomas, Professor Emeritus, LSE:
"So the question is, is it possible for Belize to extract more revenue without doing serious damage to the economy? And the answer is yes, and it is not a question of raising tax rates.The issue in Belize is not that the tax rates are not high enough - they are very high.The problem is that there are so many exceptions and exemptions and avoidance and evasion and in same cases, dare I say it, corruption, that the revenue that is obtained is actually significantly lower than it could and should be. Were it higher than government spending would be higher, then you would get an uplift in GDP per head if it was handled correctly,"
