REPORT #194 MAr 2000

Produced by the Belize Development Trust

An investment problem and national development problem.

We, those who live in ex-European colonies in the tropics have always known there is something wrong with the way we govern and cannot get the investments needed to develop the national economies on any large investment scale. But understanding the phenomena and dealing with it as a philosphy has been lacking.

Belize is no different in this respect. The problem for opening debate, is an example in Belize done during 1999. It is that Belize, is not a nation of laws!

Wow! Wait a minute you say! Belize has lots of laws. Too many laws some might say. That is true, but the laws of ex- colonies were meant for the little guy. Not for the politician in a controlling government party, or the wealthy business family with political and financial connections. Or as in colonial days, not for the colonial masters and the colonial authorities. The system was set up so that colonial authorities could negate the laws at will, to oppress and bleed Imperial native populations of tribute. This system was inherited by new native political party elites and carried on to this very day.

In Belize, we have an example once again, one of many over the decades, in 1999. The Corozal Free Trade Zone ACT of 1994 is a sham!

During 1999, an investor decided to test the law of the Corozal Free Zone Act, 1994. This Act permits by legislation, the establishment of a telecommunications company, or more than one telecommunications company within the geographical borders of the Corozal Free Trade Zone. The essence of the laws of the ACT, were that; should any independent investor from outside the country of Belize, wish for business purposes to provide and establish for customers within the Corozal Free Trade Zone, telephone and in this particular case, internet ISP services, they could do so under specific conditions.

The conditions were that; the local National monopoly on telecommunications provider ( BTL ) be given the opportunity to offer the same services to the Corozal Free Trade Zone at the same prices as the investor. Failing that, by default, the investor could then establish a separate independent telecommunications service within the zone. That is the essence of the laws in a nutshell.

However, like most ex-European colonies, the governments of native elites that inherited from the old colonial masters, also kept the right of colonial authorities to negate the laws by various European style subtle strategms. ( read-cabinet licenses and permits) In Belize, this is done in two ways.

First, most laws are "at the discretion of the Minister". The minister being an individual who is a member of a political party, usually based on townie, or population representation. They usually have an axe to grind, a relative or financial supporter to consider, and perhaps even something as lowly as a bribe, or some sort of graft desired. It was not meant to be that way. It is in theory postulated, that political minister's would be paragons of virture, above reproach and not tempted by financial, or personal gain. Human nature being what it is, temptation usually wins. So the laws are subject to an individual and his or her discretion.

Secondly, should such cabinet minister not desire to rule for or against, an investment put forward complying with the laws of Belize; the buck, or decision will be passed to the cabinet composed usually, of a single ruling party, with a political agenda, that may, or may not co-incide with the needs or advantages to the nation. The cabinet would then have a final decision. Translation into layman's English. " You have to pay a larger bribe to more than one person, through a bag man."

What does this have to do with establishing a nation of laws? Think about it for a moment. Here in 1999, we had an investor willing to commit time and money, to either cooperate with the local BTL telecommunications monopoly on a reasonable priced ISP service. Failing the agreement of prices, the investor was free to establish and construct a separate telecommunications service within the limits of the Corozal Free Trade Zone by the laws of the nation of Belize under the Corozal Free Zone ACT of 1994.

What happened? The process took most of 1999. It was announced in the Spring of the year that the service would go into effect as of October, 1999. By October, newspaper articles had postponed the establishment of the service until Xmas. When I tried to get an answer from anyone, about the progress. The subject was taboo. No answer from the Government Press Office, no answer from the Business Bureau, no answer from the Corozal Free Trade Zone to e-mail queries. Political persecution being what it is in the political one-party rules atmosphere of the nation of Belize. There was no-one willing to say what happened! What I did learn third hand, was that the cabinet had denied the application for a license.

In other words, the laws of Belize are worth ZILCH! NADA! They are only for the little guy, who cannot defend himself, someone not politically connected, or financially capable.

This is a problem with any sized meaningful investment contemplated for ex-European colonies. They are not amenable for investment except under bribery conditions, for as long as the party granting such licenses or concessions remain in political power. Most investors shy away from such conditions. Those that are naive and try, usually almost get burned and learn their lesson the expensive way.

Changing Belize to a nation of laws, or rule of law will take a different approach to the way we govern the nation. How can you the new generation make a nation ruled by law, without fear or favor to anyone? Thus unleashing the national economy from this strait jacket of very small investments done on solely individual and family basis. You can only successfully invest if you stay financially small enough not to be a target for politicians.

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