Identifier
Created
Classification
Origin
09BELMOPAN277
2009-07-15 21:31:00
UNCLASSIFIED
Embassy Belmopan
Cable title:  

RESPONSE TO BIENNIAL CARIBBEAN BASIN INVESTMENT SURVEY

Tags:  ETRD EINV ECON OTRA BH 
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VZCZCXRO8395
PP RUEHGR
DE RUEHBE #0277 1962131
ZNR UUUUU ZZH
P 152131Z JUL 09
FM AMEMBASSY BELMOPAN
TO RUEHC/SECSTATE WASHDC PRIORITY 1940
INFO RUCNCOM/EC CARICOM COLLECTIVE
UNCLAS BELMOPAN 000277 

SIPDIS

DEPARTMENT FOR WHA/CEN (JENNIFER VANTRUMP);
USITC (LYN SCHLITT)

E.O. 12958: N/A
TAGS: ETRD EINV ECON OTRA BH
SUBJECT: RESPONSE TO BIENNIAL CARIBBEAN BASIN INVESTMENT SURVEY

REF: STATE 060543

UNCLAS BELMOPAN 000277

SIPDIS

DEPARTMENT FOR WHA/CEN (JENNIFER VANTRUMP);
USITC (LYN SCHLITT)

E.O. 12958: N/A
TAGS: ETRD EINV ECON OTRA BH
SUBJECT: RESPONSE TO BIENNIAL CARIBBEAN BASIN INVESTMENT SURVEY

REF: STATE 060543


1. Post has relied on the Statistical Institute of Belize and the
quasi-governmental Belize Trade and Investment Development Service
(BELTRAIDE) for information related to investment incentives granted
to Belizean exporters under the Caribbean Basin Initiative.


2. The Belize Fiscal Incentive Act (BFIA),which encourages local
and foreign investment, is one of the best-known incentive programs
in Belize. Information provided by BELTRAIDE indicates that for the
period 2007-2008 only four firms exporting to the U.S. benefitted
from the BFIA. All of these firms are involved in the production of
papaya for the U.S. market, and as such were identified as Caribbean
Basin Economic Recovery Act (CBERA) related. Two Belize dollars
equal one U.S. dollar.


3. Maya Papaya Limited: This represents an existing investment
which is granted fiscal incentives. In March 2006, the company
invested USD 550,000 in the establishment of a papaya
production-export operation for the U.S. market. It is currently
one of the top two exporters of papaya to the U.S. from Belize.
BELTRAIDE reports that in 2007 the company benefitted under BFIA to
an estimated amount of BZ$117,000. The company did not receive any
benefits under the program in 2008. In July 2008, the Company
temporarily halted production and closed its operations due to an
estimated BZ$2 million damages resulting from the effects of
Hurricane Dean. It has recently reopened under new management.


4. Fruta Bomba Limited: This represents an existing investment
which is granted fiscal incentives. This company is a subsidiary of
Brooks Tropicals of Homestead, Florida, and has been in operation in
Belize since 1995. The company is financed by U.S. investors and in
2006 invested USD800,000 to expand its export operation. To date
the company has invested approximately US$9 million. It is
currently one of the top two exporters of papaya to the U.S. from
Belize. BELTRAIDE reports that the company benefitted under BFIA
approximately BZ$166,000 in 2007 and BZ$227,000 in 2008,
respectively. Currently Fruta Bomba is largest Belizean exporter of
papaya to the U.S.


5. Singh Tut/Belize River Farm Ltd: This represents an existing
investment which is granted fiscal incentives. However, it only
benefitted from BFIA in 2008 to an estimated amount of BZ$43,000.


6. K&D Farms Company Ltd: This company is a new investment,
financed by U.S. investors for approximately BZ$300,000. BELTRAIDE
reports that the company benefitted under BFIA approximately
BZ$250,000 in 2008. Exportation is expected to commence in March
2010, as production was delayed due to flood damage in 2008.


7. BELTRAIDE reports that despite a fall in production due to
inclement weather conditions and flooding, Maya Papaya Limited and
Fruta Bomba Ltd. remain the major producers. Furthermore, all four
companies would have been established in the absence of CBERA/CBTPA
and none operate in a free-trade zone.


8. The papaya industry sustained significant damages as a result of
Hurricane Dean which affected northern Belize in August 2007. The
loss of revenues from papaya exports in 2007 were exacerbated by
both a 4% decrease in production, and by 12.2% fall of the average
price of papaya. Exports in 2007 amounted to BZ$26.1 million which
represented a 15.9% decrease over the previous year. The industry's
recovery was hampered as a result of excessive rainfall, flooding,
and disease in papaya plantations in 2008. The industry once again
faced both a fall in production, 12.7%, and a decrease of 1.5% in
the average price per pound of papaya. This resulted in a decrease
in the exports to BZ$22.4 million which represented a decrease of
13.9% in revenues.


9. Exports from the garment industry suffered from the effects of
global competition and preference erosion when Belize's only
remaining garment manufacturer, Williamson Industries, closed its
operations in early 2008. Exports from this sector fell from
BZ$18.8 million in 2007 to BZ$300,000 in 2008. The closure of the
company resulted in the layoff of 700 workers over a 9-month period,
many of whom are single mothers.


10. Comment: While CBERA may have provided assistance to the
papaya industry in 2007 and 2008, we have not observed a
diversification away from traditional agricultural products for
export from Belize. Further, since all four companies benefiting
over the period from 2007-2008 would have been established in the
absence of CBERA/CBTPA, these initiatives are not believed to have
had an impact on generating employment. End Comment.

DIFFILY