The biggest risk is not taking any risk… In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks. – Mark Zuckerberg
The COVID-19 pandemic is the worst economic headwind that Belize has ever encountered. Myopically we have become so economically reliant on the tourism industry that most people find it impossible to discern anything that can replace it. But replace it we must. The pandemic may last for months, or for many years. COVID-19 has devastated if not killed off Mother Nature’s Best Kept Secret. (image Credit: Dennis Hurd).
The most optimistic estimates based on the Bowen and Bowen group predict a fall of tourism earnings by 60%… more realistic forecasts envision that tourism earnings will fall by 75%. It does not matter which of these predictions turns out to be closer to the truth, the unavoidable insight is that we must start to build a Belize beyond tourism.
Reports are that the Belize Tourism Board, like its counterparts in the islands in the Caribbean, is thinking about a “master plan” to ratchet up marketing so there is a ‘seamless’ transition after the pandemic. Their self deception is almost comical. This is a textbook example of acting with yesterday’s logic. Ratcheting up marketing will do nothing except waste money.
Optimism can turn into such self delusion. Tourism is a dead horse. More carrots will not work. Belize needs to think beyond tourism.
To build a successful economy in Belize post COVID-19 we will need first to build a social consensus about what defines success. The definition that appeals is an economy in which everyone has adequate food, water, and shelter… but also in which we are able to conserve the natural environment and an ecology of biodiversity. In order to provide adequate food for the entire population we must maintain our current local food security. Our country is fortunate to have the capacity to produce and distribute enough food locally to meet the nutritional needs of everyone. In order to provide adequate water we must further improve our water distribution infrastructure and conservation culture. In order to preserve biodiversity and the environment, we must rebuild our waste management infrastructure and culture. But in order to make the required investments in water and waste management infrastructure (and for a myriad other reasons) we require an export sector that earns foreign currency.
For a small developing state such as our own, a strategic approach to export sector development needs to exploit whatever natural competitive advantages that we have. For our tourism industry our competitive advantages are our sub-tropical climate, our location as a mainland country in northern Central America and our membership in the British Commonwealth.
Our new export sectors should continue to leverage our climatic environment as a competitive advantage. This means that our investments in a better educational system, environmental protection, and ecological sustainability are the most critically important. Then in those parts of our public infrastructure which preserve and protect our main competitive advantage on the global stage: our enviable social and climatic environment.
Let us take a look at existing examples of leveraging our climate in more productive ways than mass market tourism. “In 2003, six years after the first plant opened, Intel’s volume of products assembled and tested in Costa Rica represented about 22 to 25% of the corporation’s total sales. By 2005, when Intel invested US $260 million in expansions to include a third building and new services in its “shared services” group, the Costa Rica campus reflected an accumulated investment of US $770 million, employment for 2,900 workers and an additional 2,000 indirect jobs.” – The Impact Of INTEL in Costa Rica, World Bank Study. The company is headquartered in the U.S.A., but their manufacturing is located offshore. Why? Because of a reasonably educated and trainable workforce.
COVID-19 is a global crisis, and Belize must not let this crisis go to waste. One of the profound social changes that it has catalysed is the normalisation of working from home for many technical and managerial professionals in Europe and North America. So why should these recently untethered employees continue to suffer the climate of New York, Chicago or Montreal when they can relocate to Belize and continue to work from home?… just that their home is now a much nicer place to live.
Let us build a globally competitive industry around this need. Let us build an International Resident economic sector. Let us change hotel suites into condominium residences that we sell to programmers and Silicon Valley entrepreneurs from the U.S.A., Canada, the UK, Russia, Finland, South America and elsewhere so that they can come live full time in Belize and work remotely from here (we structure their residence visas so that their salary goes into a foreign currency Belizean bank account).
The future of foreign exchange earnings in Belize is not fly by night visitors, but a smaller number of people who come and make their homes here, bringing their foreign exchange incomes with them. Whether it is retired people or tech professionals who work at their metropolitan jobs from their new home. What is proposed is to institute a brain drain.. just in the opposite direction from what we have suffered in the past. We want to poach from other countries those brains most adept at today’s most pivotal technologies.
We still want to appeal to the top end of this market… those looking for a budget experience can try Nicaragua or Bolivia where the cost of living is much lower. We want to have 10,000 households of working tech professionals, or recently retired ones, each bringing on average their US $150,000 incomes to Belize. That is a U.S. $1.5 billion per year in foreign exchange. That is more than enough to replace our entire tourism industry.
To use our main competitive advantage— our enviable social and climatic environment— simply to host tourists, is to act with yesterday’s logic. We should not be recruiting tourists, we should be recruiting neighbours. Tourists simply come and spend a portion of their disposable income. Neighbours bring the totality of their income. They become part of our communities, not just a sometime, fly by night thing. Or worse, a floating Petri dish that is a cruise ship. Neighbours bring more value than visitors… both in the narrow financial sense and because they do not distort the social fabric as much.
We will aim at upper middle class tech professionals who can either work from home, or who have just retired and want to LIVE in paradise, not just visit. We want in particular to appeal to relatively young people— those in their thirties or forties— simply because their domicile in Belize will be potentially much longer. It’s basic business… if it costs you $x to recruit a customer, then you want to focus that $x on the customer who will be your customer for longest to maximise the return on your investment.
This is the face of Belize’s new US $1.5 billion International Resident economic sector.