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Document of The World Bank Group FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 102973-BZ BELIZE Public Disclosure Authorized SYSTEMATIC COUNTRY DIAGNOSTIC January 29, 2016 Public Disclosure Authorized Caribbean Country Management Unit Latin America and the Caribbean Region Public Disclosure Authorized Abbreviations and Acronyms ACP Africa Caribbean Pacific IMF International Monetary Fund AML/CFT Anti-Money Laundering and Combating the ISIC International Standard Industrial Financing of Terrorism Classification ANS Adjusted Net Savings LAC Latin American and the Caribbean API American Petroleum Industry LACEX Labor Content of Exports ASR American Sugar Refining LDC Least Developed Countries BOOST Building Opportunities for Our Social LMI Low and Middle income Countries Transformation BPO Business Process Outsourcing LFS Labor Force Survey BNE Belize Natural Energy MCE Multi-criteria Evaluation BCRIP Belize Climate Resilience Infrastructure MDGs Millennium Development Goals Project BZ$ Belize Dollar MIC Middle Income Countries CAGR Compound Annual Growth Rate MICS Multiple Indicator Cluster Survey CCT Conditional Cash Transfer MIGA Multilateral Investment Guarantee Agency CEDLAS/ Centro de Estudios Distributivos Laborales NCRIP National Climate Resilient Investment Plan SEDLAC y Sociales / Socio-Economic Database for Latin America and the Caribbean CIA Central Intelligence Agency NBB National Bank of Belize CID Center for International Development NEMO National Emergency Management Organization (Belize) CZMAI Coastal Zone Management Authority and NGO Non-Governmental Organization Institute DMSP-OLS Operational Lines scan System NTL Night Time Lights DRM Disaster Risk Management NPLs Non-performing Loans ECLAC Economic Commission for Latin America NRCP National climate Resilient Investment Plan and the Caribbean ECCU Eastern Caribbean Currency Union OECD Organization for Economic Co-operation and Development EIRR Economic Internal Rate of Return POVCALNET Online Poverty Analysis Tool EMBI Emerging Market Bond Index SAM Social Accounting Matrix EM-DAT International Emergency Disasters SATIIM Punta Gorda Belize Non-Profit Database Organisation EPI Environmental Performance Index SCD Systematic Country Diagnostic EPPR Emergency Prevention, Preparedness and SIDS Small Island Developing States Response EU European Union SMEs Small and Medium Enterprises FATF Financial Action Task Force SNA Standard National Accounts FDI Foreign Direct Investment GDP Gross Domestic Product SEDLAS Socio-Economic Database for Latin America and the Caribbean GFDRR Global Facility for Disaster Recovery and System-GMM System Generalized Method-of-Moment Reconstruction GIS Geographic Information System UN- United Nations Commodity Trade Statistics COMTRADE Database GNI Gross National Income UNDP United Nations Development Program GNS Gross National Saving UN-ECLACC United Nations Economic Commission for Latin America and the Caribbean GTAP Global Trade Analysis Project UNFCCC United Nations Framework Convention on Climate Change GVC-oriented Global Value Chain UNODC United Nations Office on Drugs and Crime HBS Household Budget Survey UNSD United Nations Statistics Division HHI Hirshman-Herfindhal Index UNICEF United Nations Children’s Fund ii HRV The Hausmann-Rodrik-Velasco Framework UNWTO United Nations World Tourism Organization HS Harmonized System USA United States of America IADB Inter-American Development Bank WDI World Development Indicators IBRD International Bank for Reconstruction and WEF World Economic Forum Development ICT Information Communication Technology WHO World Health Organization ICHR Inter-American Commission on Human WITS World Integrated Trade Solution Rights IDB International Development Bank WWF World Wildlife Fund IFC International Finance Cooperation IFS International Financial Statistics Regional Vice President Jorge Familiar Country Director Sophie Sirtaine Task Team Leader Francisco G. Carneiro iii ACKNOWLED GEMENTS This Systematic Country Diagnostic (SCD) has been prepared by a team of experts from several Global Practices in IBRD, IFC and MIGA. Francisco Galrão Carneiro (Lead Economist and Program Leader, LCC3C) was the main author and task team leader. The core team consisted of Jaime de Piniés Bianchi (Senior Consultant, GMFDR), Cecile Thioro Niang (Program Leader, LCC3C), Pierre Nadji (Senior Country Officer, LCC3C), Ulrich Barsth (Lead Economist, GMFDR), Rohan Longmore (Country Economist, GMFDR), Kassia Antoine (Research Analyst, GMFDR), Yevgeniya Savchenko (Economist, GPVDR), Javier Baez (Senior Economist, GPVDR), Andres Castaneda (Research Analyst, GPVDR), Claire Hollweg (Consultant, GTCDR), Yoonhee Kim (Senior Urban Economist, GSURR), Rajeev Gopal (IFC Country Representative, CLAEC), Luciana Marchesini (IFC Strategy Officer, CGEDR), and Petal Jean Hackett (MIGA Economist, MIGEC). Other members of the Belize Country Team and Global Practices contributed inputs and participated in workshops, including: Snjezana Plevko (GSPDR), Svetlana Edmeades (GFADR), Alessandro Legrottaglie, Galina Sotirova, Oscar Apodaca, Laisa Daza, Leonardo Aleixo Lemes (LCC3C), Christelle Chapoy (LCREC), Leonardo Garrido (consultant), Melissa Ann Adelman (GEDDR), Klas Sander, Keiko Ashida, Sylvia Michele Diaz, Sarah Guel (GENDR), Migara Jayawardena (GEEDR), Jane Hwang, Nadeem Kermali (GFMDR), Gabriel Yorio Gonzalez, Karina Ramirez Arras, David I (GGODR), Carmen Carpio (GHNDR), Christine Lao Pena (GHNDR), Carla Pantanal (GHN04), Jun Zhang (IFC), Adam Shayne (LEGLE), Julie Lohy, Matias Jose Arnal, William Battaile (GMFDR), Anna Fruttero (GPVDR), Bernarda Erazo (GPVDR), Dhushyanth Raju (SARCE), Manjula Luthria (GSPDR), Casey Weston (GSP05), Sarah Berger Gonzalez (consultant), Jose-Daniel Reyes, Raha Shahidsaless, Thomas Vis, Ana Cebreiro Gomez, Pedro Arno (GTCDR), Agustin Maria, Keren Carla Charles, Kimberly Vilar, Peter Lafare, Pedro Ferreira Fonse Pedroso (GPSURR). Sophie Sirtaine (Country Director, LCC3C) provided overall guidance. Augusto de La Torre (Chief Economist, LCRCE) chaired the Regional Operations Committee meeting that reviewed the concept note and provided strategic guidance at the earlier stages of preparation. The team would like to thank the peer reviewers, Anna Fruttero (Sr. Economist, GPVDR), and Robert Utz (Program Leader, EACNF) for useful insights during preparation and at the concept stage. LAC GP Managers provided guidance on their respective sectors, as requested by the core team. The team is particularly grateful to Auguste Tano Kouame (Practice Manager, GMFDR) for useful guidance and feedback at the earliest stages of preparation, and to the Regional Chief Economist’s Office for an informal brainstorming on an earlier draft. Elisabeth Mekonnen, Mohammed Edreess Sahak, and Joy Duff-Aleyne (LCC3C) provided critical support to the team. iv CONTENTS ACKNOWLEDGEMENTS ............................................................................................................... iv OVERVIEW ................................................................................................................................ 9 The Process ........................................................................................................................... 7 A Caveat ............................................................................................................................... 8 A. COUNTRY CONTEXT ......................................................................................................... 9 B. POVERTY AND SHARED PROSPERITY ..................................................................................15 Growth Performance – Stop and Go.........................................................................................20 Growth Determinants ............................................................................................................32 Emerging Focus Areas from the Comparative Methods ...............................................................37 Policy Areas that Could Boost Growth ......................................................................................38 C. INCLUSIVENESS ..............................................................................................................40 Labor Market Outcomes Vary by Gender and Ethnicity ...............................................................41 Unemployment: Frictional and Structural .................................................................................42 Are Workers Cueing for Jobs in the Public Sector? ......................................................................43 Migrants Are Not to Blame .....................................................................................................45 Labor Content of Exports and Sector Linkages ...........................................................................49 Export Growth Could Boost Shared Prosperity ...........................................................................52 Policy Areas to Boost Inclusion ................................................................................................56 D. SUSTAINABILITY CHALLENGES ..........................................................................................58 Factors that May Affect the Sustainability of Growth ..................................................................58 Factors that May Affect Environmental Sustainability .................................................................66 Factors that May Affect Social Sustainability..............................................................................73
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