REPORT #176 Feb 2000
THE CYCLE OF FOREIGN LOANS, RISING TAXES TO PAY FOR INTEREST ON LOANS


Produced by the Belize Development Trust

AND THE TRICKLE DOWN EFFECT TO LOCAL COST OF LIVING IN THE NORTH OF BELIZE.
(extract from the debating Belize Cuilture List)

Corozal business blues -
Oh, how we wish for a level playing field!
By Gary Ayuso

A survey of business establishments in Corozal, show that even with the "Buy In Belize" campign, they have a hard time keeping up with the shoppers who choose to go to Chetumal, and the illegal shopping that takes place in the Corozal Free Zone.

The Reporter spoke to several businessmen large and small who said that they now face double competition from merchants in Chetumal and merchants in the Corozal Free Zone. "Between these two, we Corozal businessmen are victims caught between a rock and hard place," one businessman told Reporter.

Enrique Alamilla, a shopkeeper for seyeral years, told Reporter "Business has become even slower this year. I cannot say that it is because of illegal Free Zone shoppers but I know that something is having a bad effect on my business.

"Although shopping in Chetumal had taken its toll on every business in Corozal. The Christmas season would always be a busy time when I know we could do all right".

"Many shoppers buy grocery items in Chetumal, but items like ham, turkey, apples and other special occasion things would be bought here locally. Last year I sold more than seven cases of ham. This year I was down to two cases. I am still trying to sell off the second case of apples. Last year I sold five cases. I have heard that people got their supplies from the Zone."

The manager of A&R Mechnadise, who did not want to be identified by name, said:

"Our 1999 figures have not been tabulated yet, but figures from 97-98 showed a 15% drop in sales and a 50% decrease in customers. The Corozal Free Zone should be strictly for consumers from across the border. This would then allow both the businesses in the Zone and outside the Zone to make profit if people stop spending so much in Chetumal.

"The Buy Belizean campaign is not doing much to stop the flow of shoppers across the border" he said.

Mr. Gabriel Lizama, Manager of Venus Photos Corozal, had this to say: "I do not think that shopping in the Zone has meant a decline in sales for me.

Corozal went dead when the peso fell years ago. Yes, there are people who shop in the Zone and it is no secret, but that is not the problem we face in Corozal. We face a decline in our business because of our prices. We cannot compete with either Chetumal or the illegal goods from the Zone. This is because we have to pay so much for our goods, so we are forced to sell at high prices."

He added, "The Buy Belize Campaign should be a lower-Your-Prices campaign. That will make the difference, but unfortunately that will never be the focus. It is one thing to say it, but another is to do. The only way we will ever get back the support of customers to our stores is for us to have competing prices. But that is impossible at this point."

One shop owner who wished not to be identified said: "At first people listened to the hype about the Buy in Belize Campaign but now many see it's just words because no one has seen any change in prices that would induce shoppers to stay and shop it Beize. Yes, people love their country and would defend it to the end. But you can't defend something if you are weak. People need to go where they can shop the cheapest, and if in Chetumal and now in the Zone they are getting cheaper prices, they will actively seek out these better prices.

"Look at the number of Government vehicles that go to the Zone. These government people shop there as well! Why? Because of the prices! So if they do it and they have more buying power than the average person, how do they expect the little man who is earning $75 a week not to try to get more out of his money?"

Mr. Angel Vera of Aqua Marina Grocery shared his views, say-big: "Our sales declined a long time ago when our Belizean people found Out that what they can get in Chetumal with their money is far more that what they can get in Belize. Even with duty at the border, goods are 'still cheaper than here in Belize.

"If the duty is increased at the border, people will then find more ways to (smuggle) contraband. It is not that they want to; it is almost a must in order to survive. The people who have big businesses in the Zone are not complaining, because what they art losing out here, they am making up inside the zone.

"The other problem is that on many items, we have no price control. When a shop finds a way to undersell another, it does so and immediately you are not a competitor any more. This happens to a local grocery store whenever a Chinese-owned shop opens near you. They survive on quantity instead of percentages, They can do that because they have money to keep their busipesses afloat if they do not sell the amount.

"We have to rely On making our percentage so we can pay our bills. It is the same concept that we need to address. Chetumal has a lot of people and their prices are cheaper so everyone will go there. If no remedy is found, not only our shops, but our country might shut down in the long run?

Ms. and Mrs. Castafieda who have been running their grocery shop for many years gave their version of business in Corozal.

"For many years no we have seen the, number of customers decline and buy only small amounts from the shop. When they run of supplies and need something right away, we make a sale. I know that our prices are high and on the radio they keep saying Buy In Belize! But how can you?"

The owner of Texaco Service Station told the story of how cheap gasoline from Mexico stunted his business. Today he is being squeezed even harder by competition from black market gasoline vendors, who get their gas from the Free Zone.

"I have been in this business for 10 years now. When the Mexican peso fell, I felt a sharp blow in my business, but somehow we managed to weather the storm because of the quality of the Mexican gas and the effect it had on the performance of some vehicles."

"Over the years however, I got used to hearing, 'Only put in five or maybe ten dollars worth because I need enough only to reach Chetumal.' Since then, many illegal gas vendors have sprung up across Corozal and we went the distance to try and stay in business."

"Today we - faced with local gas prices being astronomically high, and now motorists can get the same quality gas we have at our pumps from illegal dealers who sell from buckets. At the gas station you would pay $5.39 per gallon. That it equivalent $26.95 for five gallons. On the black market, you get a bucket of gas (about five gallons) for $l9.00 and it is the exact same gas we sell at our pumps. The thing is that these people have waya of smuggling the gasoline from out the zone."

"Imagine a saving of $7.95! Which would you prefer?"

In order for us to get back on track, either our prices must be lowered or we must conform to reality and diversify into other sturvival methods.'

Solangel Tun from Caribbean Chicken said "If the Buy-In-Belize campaign would work it would be good, but so far it has not. Businesses have gone down over the years and shopping across the border is taking its toll. But prices are too high! If our prices would go down, it would certainly help,"

"The effects of smuggled and black market goods from the Free Zone are being felt in the Corozal business commimity. These will get progressively worse if the smuggling is not controlled," Ms. Tum predicted. "On New Year's night while at a night lounge in Orange Walk, I purchased a packet of Benson & Hedges cigaretttes for $8 when I noticed the pack did not have the Belize Market stamp on it. A friend who was with me, an immigration officer, showed mc the CFZ or Corozal Free ZonE stamp on the bottom.

"That's just the way it is!

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