I.D.B. President shares the secret to economic growth

As we have been reporting, I.D.B. President, Luis Alberto Moreno, is on a working visit to Belize. Along with, Harvard’s Dr. Ricardo Hausmann, he partnered with the private sector to look at ways to bolster growth, at a time when the economy is in recession. Belize has a foot in both Central America and the Caribbean. And while it has shown grown in one region, in the other it is lagging behind. According to the noted economists, the government must set the environment for the private sector to prosper. News Five’s Isani Cayetano reports.

Isani Cayetano, Reporting

The growth performance of Belize’s fledgling economy when compared to other countries within Central America and the Caribbean has, over the past fifty years, been described by analysts as relatively good.  The Jewel’s duality as a member of both regions however, sees it shining in one while lackluster in another.  It was ranked second among the poorest countries in Central America in 1960 and has since grown to become proportionate to Costa Rica and Panama in its gross domestic product.  In the Caribbean, on the other hand, it pales in comparison to the economies of Barbados and Trinidad & Tobago.  In order for Belize’s economy to become competitive within CARICOM Dr. Ricardo Hausmann, a professor of the Practice of Economic Development at Harvard University suggests a basic change in the way the business community interacts with government.

ricardo hausmann

Dr. Ricardo Hausmann, Dir. Center of Int’l Dev., Harvard University

“I think that it is perfectly feasible to think of a Belize that within two generations is ten times richer than it is today.  And for that Belize, say Belize [with] a level of income of forty thousand dollars which is, say the level of income of the rich countries today is perfectly possible to think of that Belize.  That Belize would have many, many more things than what it has today.  It would have a larger more complex tourism sector.  It would have a larger more complex agricultural sector.  It would have a larger manufacturing sector; it would have services, it would have IT.  It would have a lot of things that are currently not being done but would be done in a more prosperous situation.”

To accomplish that foreseeable goal the private sector is being called upon to work closely with the Government of Belize.  Adopting the policies of structural transformation, says Luis Moreno, makes it easier for funding agencies such as the Inter-American Development Bank to assist in the country’s growth.

Luis Moreno, President, I.D.B.

luis moreno

“What we wanted to do here at the invitation of Prime Minister Barrow and the Chamber was to do two things; one is to bring all the analytical side of the bank and see how the private sector can prosper even further in Belize.  Now it is fundamental of course to understand that the government creates the environment but at the end of the day it’s the business community that will develop and make the best out of the environment.  So that has been kind of the spirit under which we have been working here in the notion of creating a good public/private partnership and that dialogue in that regard.”

Equally important to that dialogue is the issue of balance and politics.

Dr. Ricardo Hausmann

“This is a cooperative arrangement.  Societies progress because everybody performs their function and are able to coordinate their difficulties so the government has plenty of things to do.  It has to provide the regulatory framework.  It has to write the laws; it has to provide security, it has to provide the infrastructure.  It has to run the educational system, the health system, the social security system.  It has to run the courts and so on.  There are many things that could go wrong and not function adequately in many of those functions.”

According to Hausmann his studies have shown that “countries seldom grow rich by producing the same things more productively.  They usually change what they produce in the process of development.”  He recently wrote a thesis on the ‘Policies for Achieving Structural Transformation in the Caribbean’ using the economy of Belize as a case study. Reporting for News Five, I am Isani Cayetano.