Trading for Development in the Age of Global Value Chains

1. Global Value Chains
Participation for the
Country of Belize.

2. Introduction
The knowledge gained from this course has peaked my
attention to the competitive advantages that Belize has
to offer to attract foreign direct investment (FDI). In
1997, the government of Belize created the Trade and
Investment Promotion Service (TIPS) and was
subsequently renamed Belize Trade and Investment
Development Service (BELTRAIDE). This statutory body
serves as the country’s national investment, export and
trade promotion agency. Like many small and
developing countries, the government has created ways
to attract investment, mainly by highlighting
competitive advantages. Foreign investment is essential
for domestic firms to have more opportunities to
participate in global value chains (GVCs).

3. Competitive
Advantages
• Stable Environment – Stable
political, social and business
environments
• Competitive Salaries
• Geographic Proximity
• Strong Government Support
• Currency Stability
• Strong and Dependable
Telecommunication Infrastructure
• Openness to Trade

4. Opportunities for Investment
In the late 1990s, Belize faced the inevitable loss of preferential markets
for its traditional exports. Through BELTRAIDE, the government created
an environment for foreign investment in industries such as:
• Tourism – Tourism is one of the largest growing industries in Belize
and the government has pledged to make this a national priority
since it is viewed as a main engine for the overall economic growth of
the country
• Offshore Outsourcing – Information technology has become more
competitive, globalised and more costly to outsource in other parts
of the world making Belize a viable option for relocation. The
Business Outsource Processing (BPO) industry has been specifically
recognized as a ‘niche’ area and priority for the country’s socio-
economic growth.
• Agribusiness and Agri-processing – Belize has a long standing
tradition in agricultural exports hence the opportunities for
agribusiness are immense with the access to new and larger markets.
• Fisheries and Aquaculture – Vast opportunities exist for capture
fisheries such as lobster, fin fish and conch as well as farm fisheries.

5. Policies for
Adaptation/Changes
in International Trade
as a result of Global
Value Chains
The expansion of GVCs have slowed significantly since 2008 as
a result of lower investment and economic growth as well as
stagnation of trade liberalisation initiatives. As compared to
conventional international trade, GVCs makes it possible for
developing countries like Belize to enter into larger markets at
a lower cost, contribute to economic growth and reduce the
poverty level.
The benefits of GVC participation encouraged the policy
makers to create an environment to enhance Belize’s
investment climate.

6. Policies for Adaptation/Changes in
International Trade as a result of Global
Value Chains (cont.)
Some policies currently in place includes:
• Pro-business Initiative – As part of its development policies, Belize offers a business friendly tax
regime which offers low corporate and business tax rates to investors.
• Access to Export Processing Zones (EPZs) and Commercial Free Zones
• Fiscal Incentive Programme – Custom exemption duties to companies for a specific time period.
• Training to upgrade employability skills.

7. Policies for Adaptation/Changes in International
Trade as a result of Global Value Chains (cont.)
• Conventional trade and global value chains have always and will
continue to face challenges in the ever changing and unpredictable
global landscape. The global pandemic, Covid-19, presents even
greater challenges for developing countries like Belize as it relates to
attracting/maintaining suitable investments and by extension
participation in GVCs.
• Historically, Belize has attracted offshore outsourcing investments
which resulted in tremendous growth of over 80% in the past few
years in the business process outsourcing sector.

8. Policies for Adaptation/Changes
in International Trade as a result
of Global Value Chains
• With the main priority areas of investment being focussed in
the services sectors like offshore outsourcing and tourism,
the critical sector of agriculture has been neglected and the
lack of initiatives/policies reflects this position. The current
pandemic has brought the tourism sector to a complete halt
which resulted in massive job losses. The BPO sector
continues to operate where only workers with some level of
technological skills are able to have some form of job
security. The lack of policies to prioritise foreign direct
investment to support the development of agriculture value
chains have marginalised low skilled workers and farmers.
Hence, priority should be placed on developing this sector,
utilising the competitive advantages of land and low skilled ,
low cost labour.

9. Conclusion
Developing countries face many challenges to
compete in the current global economy. However,
diverse approaches in polices as well as products
and services offered can have a positive and
significant impact on the job creation and poverty
reduction for countries like Belize.
In closing, I would like to thank the World Bank
Group for the opportunity of learning and
participating in this very informative topic.