Threats to Economic Freedom in Belize?

James M. Roberts /

Although Belize has made some progress on its Index of Economic Freedom score in the past few years, recent actions by the government of Prime Minister Dean Barrow and the supermajority his United Democratic Party enjoys in Parliament may have put that progress at risk.

Belize is increasingly wracked by violent crime, while its high debt burden is a strain on public finance. The illegal drug trade and money laundering are entrenched problems. The Barrow government took office in February 2008 and has close relations with Venezuelan President Hugo Chavez, due in part to the many foreign aid petro-dollars he sends to the country.

In return, apparently, the Barrow government may have agreed to play by Chavez’s populist rules: expropriation of private property, centralization of power in the executive (in the name of the people), attacks on the independence of the judiciary, and a crackdown on private media and freedom of expression.

In August 2009, for example, the leading private telecommunications provider in Belize was taken over by the government, which offered no compensation to the owners. The opposition People’s United Party branded the action an “expropriation,” although the U.S. State Department and The Economist magazine call it “nationalization.”

Meanwhile, according to two former opposition party attorneys general of Belize, the Barrow government is ignoring or backing out of international arbitration treaties and agreements and punishing or fining those companies who seek international arbitration to settle investment disputes. The government is said to be expropriating land without providing compensation at an increasing rate.

Finally, the executive branch has attacked the independence of the country’s judiciary, prompting many distinguished jurists to resign. It has also begun to harass owners of opposition media outlets. Belize has dropped from being ranked 66th out of 180 countries on Transparency International’s Corruption Perception Index in 2006 to 109th out of 180 countries in 2008. It was not ranked in 2009 or 2010.

The Barrow government’s tactics are similar to those long since deployed in Venezuela by President Chavez and by his allies in other Latin American countries. Given that Belize is right next door to Honduras, where Chavez ally and ex-President Manuel Zelaya tried the same sort of approach last year (albeit with a far different outcome), perhaps it should not come as a surprise.

The Obama Administration should express the concern of the U.S. government about this pattern of behavior by the government of Belize and urge it to return to the path toward market-based democracy from which it appears to have strayed.