Globalization and telecommunication in Belize
Globalization has been a positive and negative force for many countries.Belize has witnessed tremendous opportunities because of the advent of globalization.It has opened the economy, privatized its industries, liberalized trade, and linked with the international system.
It has also been negatively affected by global warming, weather changes, crime, violence, inflation and huge foreign debt.
The Belize Telemedia Limited is the main telecommunications organization of the country. This paper studies how globalization has helped the economy, people, and success of the dominant telecommunications company in Belize.
Introduction Technology has changed the way we live, communicate and do business. Technology tools are used to purchase goods and services using the internet. These advances have changed the way governments will provide services to people and agencies. Telecommunications consist of services and technologies which facilitate communication and exchange of information. It is considered to be critical to the development process. It provides links between urban and rural areas. It can overcome distance barriers which hinder the development of remote areas. Access to information is the key to many development activities.
Telecommunications remains an underdeveloped field in many developing countries. Despite extensive progress of the past decades, access to telecommunication remains limited while being non existent in many rural regions. New technologies can assist countries in extending their access to telecommunications at a lower cost. The aims of governments to change their telecommunications also create new opportunities for people living in remote areas. Belize is a country which is located in the Caribbean islands. It became independent in 1981. Belize Telemedia is the main telecommunications company of the country.
The government of Belize has been focusing on modernizing the infrastructure of the country. The economy is mainly dependant on tourism, oil reserves, sugar exports, and shrimp exports. The lack of proper infrastructure has contributed to a lack of development in the rural areas of the country. The country has embarked upon a program of economic liberalization which aims to alleviate the poverty of the country and diversify its economy. Belize Telemedia Limited is the name of the state company which provides telecommunication services in the country.
The market was heavily regulated and controlled by the government until 2003. Despite economic liberalization, BTL continues to enjoy domination and monopoly in the telecommunications market. The government and regulatory bodies continue to collaborate in order to enhance the structure of the industry. Currently the company has three hundred and thirty five thousand fixed landlines, one hundred and thirty cellular consumers, and eight thousand internet customers. The company has a workforce of four hundred and seventy five engineers and workers which are spread throughout the country.
BTL has strived to develop, engineer, and install high tech network and technologies. It has also aimed to offer best communication services and facilities. The company is dedicated to increase its existing wire line, mobile and internet services by getting on-stream a broad range of matchless, unsurpassed services and facilities to the consumers. Additionally, its dynamic, quick and efficient network provides its consumers consistent, efficient, trusty and finest service accessed in the vicinity, all over the country, regionally and globally. BTL headquarters are in Belize City. Need for the Study
Empirical studies about the impact of globalization on Belize are rare. This paper studies the economic development of Belize in the light of globalization, privatization and economic liberalization. It studies how beneficial the economy has been to the people after the opening of the economy. It perceives and looks at the performance of BTL and its role in contributing to the development of the country. Research Questions The following research questions are asked in this paper: 1. How has globalization affected the economic development of Belize? 2. How has globalization affected the welfare of its people?
3. How has globalization affected the success of the dominant telecommunications company BTL? Purpose of the Study The research methodology is the set of processes used to collect and analyze data. Research methodology is defined as a structured set of guidelines or activities to assist in generating valid and reliable research results. This part describes the research methods and procedures used to obtain and analyze data in this study. Research design reflects the structure of the research project and provides the means of collecting suitable data to answer the research questions.
This paper seeks to identify the social, political, economic and cultural issues and outcomes which have emerged from globalization in Belize. It reviews the telecommunication sector of the country by looking at the reports of BTL. It studies the performance of the BTL. It highlights the achievements and failures of the company. It researches and examines the company’s services in the light of the government’s telecommunication industry. A detailed analysis is conducted about the success and failure of globalization in Belize by using studies which provide analysis on the economic performance of the country.
Finally the study uses research material to examine the globalization success or failure in Belize as compared with its neighbors. The impact of telecommunications industry in the light of globalization is studied and researched extensively in the paper. Literature Review Belize is a Central American state which became independent in the early 1980s. The country has a multicultural society with various ethnic and racial groups. The country has pursued an economic policy which is dependant on free trade and foreign investment. Agriculture exports comprise the majority of the country’s exports.
An estimated one hundred and eighty five American companies have invested in the country’s infrastructure and telecommunications sector. With a population of three hundred thousand people, the government continues to invest in developing the infrastructure of the country (Neuman 26, 2003). The country enjoys decent standards of living with relatively stable electrical, telephone, and water infrastructure. However major roads of the country are hampered by lack of development.Belize City and Dangriga are the important sea ports which handle shipping arriving from the United States of America.
All major international airlines provide regular flights to the country. Belize has embarked upon a program of economic liberalization which includes a fifteen million dollar electricity program (Neuman 27, 2003). Estimated twenty million dollars funds have also been received from the Inter American Development Bank. This money will be used to invest in social sectors and services. Another two million dollars have been collected to invest in poverty reduction programs. Another major investment project is the Agricultural Health Project which seeks to modernize the agricultural production and distribution sector.
Brazil has provided assistance for the development of soybean in the country. The aim of the government has been to diversify its agricultural exports and decrease reliance on the export of sugar cane. Economy of Belize The economy of Belize has been vulnerable to fluctuations in the international market. Moderate growth has been achieved by government policies that have further opened the markets and foreign investment. The economy has been susceptible to the change in prices of sugar cane and bananas. The United States remains the leading partner of the country in trade (Furtado 57, 2005).
In 2008, the United States was the choice of destination for forty percent of the country’s exports. It provided fifty percent of the imports for the country. The European Union, United Kingdom, Latin America, and Central America remain important trading partners for the country. The country exported goods worth of three hundred million in 2007 while imported four hundred million dollars worth goods in 2007. Belize is a member of Caribbean CARICOM regional organization which provides several benefits. It aims to promote its agricultural production through CARICOM. United States and Europe remain the major trading partners of the country.
The United States has also assisted Belize by the Caribbean Basin Initiative which allows the country to sell products in the US market without duties. The US has made investment in citrus and shrimp markets. The economy of Belize is very small and dominated by private enterprise. Domestic industrial production is small because of the small market and high labor costs. Sugar remains the major export of the country accounting for fifty percent of exports. The 1990s witnessed a tough program of cutting expenditure and slashing deficits by the government which led to a temporary slump in the economy (Furtado 56, 2005).
The World Bank report on Belize states that the economy has been growing because of the dynamic private sector and increased foreign investment. The economic growth of the country in 2007 was three percent (Kalinina 2, 2008). This was in accordance with the country’s economic objectives. The government has tried hard to diversify the economy but it still remains small. Recently the government embarked upon a program of fiscal discipline and reduces its debt. The government can benefit if it addresses the structural and fiscal weaknesses of the economy (Kalinina 4, 2008).
Similarly efforts to increase transparency in decision making can also ensure the success of the economy. Political corruption is a major hindrance in the development of the economy. However there is no political crisis or instability as witnessed in other countries. The political system suffers from a poor decision making system. This prevents the implementation of policies which address the fiscal problems of the economy. Weak institutions are another negative factor which adversely affects the economic system. The country’s institutions do not have the adequate checks and balances which are vital for the success of the economy.
The private domestic sector of Belize is more open and transparent as compared with the government sector. The country is ranked at ninety nine out of one hundred and seventy nine countries according to the Transparency International’s Corruption Index of 2007 (Kalinina 5, 2008). Compared with neighboring countries, the economic growth has been moderate despite the fact that economic performance has been equal to neighboring countries. The increase in GDP has been because of the increase in immigration from neighboring countries. In the past five years, the GDP per capita has grown by a percentage of three percent.
The standard of living is equivalent to its neighbors in Central America. The improvement of the fiscal policy has assisted in reducing the debt as compared with its neighbors. Fiscal deficits accounted for five percent of the GDP in 2007 (Kalinina 6, 2008). The country aims to bring down its fiscal deficit by two percent in 2008. The monetary and fiscal policies of the government assisted the economy in increasing the economic growth in 2006 and 2007. Foreign debt however continues to remain a major obstacle in the growth of the Belizean economy.
During 2007 the government decreased its external debt, interest rates and created funds to invest in the public sector (Kalinina 11, 2008). International donor agencies continue to assist the government in poverty alleviation programs. Compared with its neighbors, the country has been more successful in reducing external and internal debt. A disciplined fiscal debt policy will assist the government in continuing to reduce its debt. External pressures determine the performance of the Belizean economy. The open and narrow structure of the economy creates negative performances.
The discovery of oil reserves and increased tourism has improved the structure of the economy. Export performance in trade and services has led the country to have an increased external debt as compared with Central American neighbors. This has been because the public sector of the country has been in high debt. The new Belizean government has aimed to improve the foreign exchange reserves of the country and reduce its high debt. It also will continue to embark upon the policy of launching fiscal discipline and preserving economic growth. The currency peg will also be given strong government support.
Donors like Taiwan and Venezuela have also assisted the country with economic assistance. The United States and United Kingdom continue to support the country in fighting the illegal drug trade. Globalization and free trade principles are the backbone of the Belizean government’s economic policy. This has been assisted by the discovery of oil reserves and tourism. Growth in 2008 will continue to be moderate because of the unstable international market (Kalinina 14, 2008). The private sector of the country remains dynamic and innovative. Domestic and foreign investors have assisted in the increase of private consumption and exports.
Agricultural growth in 2007 was limited because of the weather and disease. The shrimp farming sector also reported a ten percent decline. Tourism remained strong because of arrivals from the United States of America and Canada. Cruise ships have become a prominent feature of the tourist industry in Belize. Hurricane Dean severely impacted the economy after it struck on Aug, 2007 (Kalinina 14, 2008). This caused direct and indirect losses which were estimated to be one hundred million dollars. The economy faces challenges because of changes in world commodity prices, slow economic growth, and international market vulnerabilities.
However on the bright side the successful diversification of the economy, investments in tourism, discovery of oil reserves, and increased electricity will assist in the improving the economy. Telecommunications sector Belize Telemedia Limited is the new name of Belize Telecommunications Limited in Belize which was instituted in 1972 as the telecommunication authority. The Belizean telecom market was formally and authoritatively reformed and became less strict in January 2003; however Belize Telecommunications still has the control in the telecommunication market (Mansell 56, 2007).
With limited rivalry and unproductive regulatory control, it has fixed very expensive charges for its services. VoIP is the case study which reveals a controversy in the Belize telecommunication industry. Although the government and the regulatory body collaboratively confirmed to promote competition in the telecom sector, in reality BTL was successful in conspiring against VoIP to remove competition. However, BTL has to face competition in the mobile sector where SpeedNet has successfully covered 18 percent of the market.
At present, BTL prides on 335000 fixed landlines, 130000 cellular consumers and 8000 internet customers. BTL has more than 475 expert and capable workers with 15 branch offices spread countrywide (Mansell 56, 2007). The aims and objectives of BTL is to develop, engineer and install high tech network and technologies and to offer best communication services and facilities. The company is dedicated to increase its existing wire line, mobile and internet services by getting on-stream a broad range of matchless, unsurpassed services and facilities to the consumers.
Additionally, its dynamic, quick and efficient network provides its consumers consistent, efficient, trusty and finest service accessed in the vicinity, all over the country, regionally and globally. BTL headquarters are in Belize City. It has 15 customer service centers installed countrywide. Telemedia is concentrated on increasing further than the national boundaries so that there is increase in investor value, development and promotion of new opportunities for workers and assistance in the economic development, progress and increase of the nation of Belize. Telemedia offers HomeFone Service which is a fixed telephone line service.
It provides three latest and reasonably priced plans to residential customers. These plans offer distinctive alternatives which includes limitless night and weekend minutes, unlimited, unrestrained monthly usage, etc. Each package offer services such as caller id, voicemail, 24 hours contact to Operator, telephone directory, etc. Telemedia’s wireless service offers its consumers the basic telephone service (Calabrese 225, 2007). The consumer can avail other suitable features that will improve communication requirement for residential or commercial purpose. It offers the users to receive calls locally, countrywide and globally.
Econo-Phone is another service which gives full access to Telemedia Prepaid telephone service at affordable rates. The user can keep an eye on the amount of time he or she spends on the phone and can make calls all over the world. Econo-Phone works as a prepaid cellular phone. The user can also enjoy facilities such as voice mail notifications, caller id, internet services, etc. DigiCell is cellular service that uses GSM. It is operational at GSM 1900 and offers advanced, improved superiority, improved voice clearness and wide-ranging safety measures (Calabrese 225, 2007).
It is considered to be Belize’s most highly developed and ground-breaking mobile service. It offers increased collection of voice and multimedia services. DigiCell encrypts all voice and data, thus making it more secure. DigiCell also offers innovative solutions for business and residential consumers by means of DigiCell Prepaid services. It offers short message service, data and international roaming service, call hold, call waiting, caller id, voicemail, etc. Telemedia’s Once Card can be used to avail all the Prepaid Services that are offered.
When the consumer buys a Prepaid card, e-PIN or Fone TopUp, he or she is no longer requires to select between regular or DigiCell prepaid card. Further, this card can be used as a recharge or calling card. Fone TopUp is electronic recharge arrangement that permits representatives and distributors to supply electronic pins or immediately top up a prepaid number with any value. Belize Telemedia Limited has successfully increased its wireless coverage nationwide, covering most of the rural communities in Belize by deploying Nortel wireless technology (Cronin 29, 2007).
This technology has completely replaced the old Belize Telemedia existing GSM structure given by Nortel competitor; as well deploy a new CDMA 450 MHz network to hold up Telemedia’s emergent subscriber demand in Belize and the requirement for more superior, high-tech products and facilities countrywide. .Telemedia’s existing wireless setup has been improved and enhanced to Nortel GSM GPRS/EDGE 850/1900 MHz wireless network which offers superior network coverage and connectivity for the consumers.
In addition, the operator has launched a completely new network laid on Nortel CDMA xRTT and 1xEV-DO technologies in the 450 MHz range, to expand services and assist to seal the means of communication space in rural society (Cronin 29, 2007). According to Dean Boyce who is the chairperson of the executive committee at Belize Telemedia, the Nortel technologies has successfully enhanced the reputation of Belize Telemedia and also given wide-ranging services which has strengthen Telemedia’s network.
The execution of CDMA/EVDO platform and the utilization of 450 MHz frequency have successfully provided voice and high speed internet services to consumers present in rural areas which has accelerated Belize economy. Belize Telemedia’s network substitute and improvement also includes Nortel all-IP products such as Advanced Telecommunications Computing Architecture, Mobile Switching Center and Home Location Register, allowing operators to back up numerous services and applications on the unchanged, consistent platform. The Belize government welcomed the 2004 sale of the nationwide telephone corporate to a U.
S-Caribbean organization as a moment of guarantee and affiliation. The main highlight was the $90 million deal (Fox 103, 2007). However, the agreement was tattered and became a story of officially permitted and oral clash. The clash started when Musa management took full authority of Belize Telecommunication Ltd from Prosser and his company after the failure to pay $57 million to the government for the phone company. Prosser filed a case in which he demanded the court to give out a command that would invalidate the boardroom occupation and put him back in charge.
Prosser’s attorney was Lanny Davis who criticized the Belize government by calling it lawless after the assembly approved a law allowing the occupation of specified telephone company shares after Prosser’s non-payment. In the initial stages of the case, U. S District Judge Ursula Ungaro-Benages instructed Belize to invalidate its conflict against ICC, and then hit the government with a disrespect, scorn allegation for refusal to comply, signifying that Belize authorities gave the impression to want “to be hit over the head by a 2-by-4. UngaroBenages passed the verdict which favored the Belize government.
The liberalization of the telecommunication market at various phases, from Guatemala to Costa Rica remains government owned. Costa Rica’s fixed-line tele-density is the highest in South America while that in Guatemala is 40 percent less than the complete South American average, which shows that fixed line privatization and competition are no assurance of the development there. The study reveals that low fixed line tele-density causes leapfrogged unswervingly into mobile communications. Mobile competition is intense and diffusion is far away that would be anticipated bearing in mind their other macroeconomic pointers (Fox 103, 2007).
Belize is the only exemption since it has national owned mobile company. Broadband services also vary greatly among these seven countries. Efforts are being made to liberalize Belize’s telecommunication market. Belize stands out from its neighboring countries as a financial leader, having already commenced the internet trend that would hit its neighbors in the entire South American Region. The interests of foreign companies to chase the liberalization of the Belize telecommunication market set up in the country and use that country as a launch pad to launch its rising information technology business throughout the area.
The initiation of foreign competitors in the Belize telecommunication market needs a legitimate alteration and adjustment to suspend the current government utility company’s domination in the market. The demand for telecommunications is rapidly increasing in Belize. Research has found that an estimated fifty million minutes of international long distance telephone calls originate from Belize each year. The government has aimed to ensure that consumers have lower prices, higher quality services, wider array of service choices, and state of the art technology.
It also seeks to improve the efficiency of numerous business ventures which would facilitate the economy of the country. An improved telecommunications infrastructure will also increase the level of foreign investment. The telecommunications sector has been constrained by limited financial ability to invest in development of new infrastructure (Fox 103, 2007). As a state run institution, BTL has found it difficult to maintain a state of the art telecommunications network. Satellite, cellular, and information technologies are changing at a rapid rate.
Belize already faces several disadvantages as compared with its neighbors because it is losing competition in terms of cellular teledensity. It also has the greatest unsatisfied demand for services and the longest average wait for installation of telephone lines. It also suffers from a disadvantage in terms of the number of lines per employee and level of investment per employee. BTL has invested twenty dollars in telecommunications for every inhabitant. Other countries with similar economic levels have invested two to ten times higher.
The country has annually invested less in telecommunication than the amount needed to maintain the current level of personal welfare enjoyed. The low investment rate has created several problems for BTL (Fox 103, 2007. Research conducted for a group of Belizeans determined that forty percent of the participants had no idea about the telecommunication reforms. Twenty percent claimed that government plans to reform the telecommunication sector would fail. The government aims to ensure that the demand for telecom services will increase if the level of services is upgraded and modernized.
The country aims to privatize and liberalize the sector which would give an incentive for private organizations to provide services in remote areas of the country. Numerous communities in Belize do not have access to adequate telecommunication services. Private companies have been selected to tap for customers who would provide a large number of citizens with the opportunity to obtain telecommunications services. The Public Utilities Commission which was formed in the late 1990s regulates the telecommunications industry in Belize.
It has worked with the government to develop a policy framework for the telecommunications sector. This policy is the future blueprint and development of the industry (Cronin 31, 2007). The Belize Telecommunications Act was passed in 2002 which allowed all licenses, permits, and permission for operating until the expiry of previous licenses. This act allows the development of the telecommunications industry by the system of competition. It has granted two licenses to the Belize Telecommunications Limited and International Telecommunications Limited. An individual license was also provided to Speednet Communications Limited.
The PUC has granted an estimated twenty licenses for internet service providers, data networks, and private domestic networks (Cronin 32, 2007). The PUC has also allowed the improvement in the set of rules and software applications to improve the quality of communications. Belize has not managed to open its telecommunications market to competition and privatization. As a result it has been experiencing slower sector growth and higher prices as compared with its neighbors. High prices and the slow rate of innovation have been identified as being responsible for the slow pace of development (Cronin 29, 2007).
There are also limited opportunities for entrepreneurial initiatives. The new government aims to properly design and implement reforms in the telecommunications sector. It requires political will and capacity to reform which would assist in the development of the telecommunications sector. It also requires the need for clear policies and basic rules of the game. The policy for licensing new companies must be clear as it would ensure that the sector structure is secure in the future. The pricing rules must be well defined which would allow firm numbers and simple formulas for automatic adjustments to hold for several years.
Another requirement is the powers of the regulatory authority and the decision making processes will be used in interactions with regulators. Credible and stable sector policies and rules are another objective of the government. They aim to create a broad consensus on the reform package (Cronin 30, 2007). Another important step is the government seeks to add credibility to the reform process by relating the process to its success. Good telecommunications laws also need to be implemented according to the objectives of the new government. The current legislation needs to be upgraded so that it can assist in telecommunication reforms in Belize.
A major task of the Belizean government has been to create credibility for its telecommunications reform policy. Private investors believe that the absence of credibility would result in the risk of expropriation and having investors taken hostage in terms of the ability of the government to force utilities to charge unprofitable rates for their services. While the government wants to encourage private investment, it must create an institutional arrangement that limits their own ability to behave opportunistically once private telecom operators undertake their investments.
The creation of regulatory bodies creates questions concerned with accountability and autonomy. Empirical studies that have studied the Belizean telecommunication sector have tried to explain the partial telecommunications reforms or the effects of political and institutional variables on network deployment. Research has explored how new political institutions measured by index of checks and balances affect the long run level of penetration in Belize (Cronin 39, 2007). Political limits have a strong and positive relationship with the growth of main lines.
It highlights the importance of policy for promoting steady and strong incentives to private investors in a sector where opportunistic behavior might be expected. Other researchers studied the effects of telecommunications regulation and political variables in which they found that these variables help explain the level of network expansion. A better and specific regulatory environment leads to greater investments in telecommunications. Ownership and competition by private investors tend to create favorable environment for the expansion of telecommunications.
Regulation helps assist the private firms that enter the telecommunications sector of Belize. Research conducted for the links between privatization and network expansion found that privatization is strongly linked with the efficiency and reliability of the telecommunications sector. Competition a major variable can have a positive effect on the telecommunication sector. Regulation is however considered to negative with relation to network expansion. Regulatory environment constitutes an important factor for private organizations that seek to operate in Belize.
Strategic decisions made by companies can be linked with traditional economic factors and regulatory conditions. The performance of the telecom industry affects and is affected by the political and regulatory decisions. Privatization, liberalization and regulatory enhancement are linked and influence each other in the success of the telecom industry (Cronin 69, 2007). Belizean telecommunications market is an emerging market which is considered risky by major telecom operators. It also suffers from volatility because of the vulnerability of the economy to market fluctuations.
Consumers in Belize are also sensitive to prices even during the times of economic boom. Low prices and regulations make Belize an unattractive option for Western telecom companies. Despite major bills and reforms, the sector continues to be dominated by the BTL. Belize Telemedia retains its monopoly and hegemony over the telecommunication sector. It is also favorably supported by the government which continues to provide economic assistance to the company. The sluggish capital market and uncertainty about future economic development in Belize means that carriers will prefer technology that makes the most of existing infrastructure.
This will increase the sales opportunities with products that offer reliable and efficient service. Research Methods This paper uses research by studying and extensively reviewing the literature on telecommunications and Belize. To conduct the search, the scope of the study was studied and the sources of information identified. Telecommunications is considered to include communication services like radio, telephone, etc and technologies which can provide such services. Studies about the impact of telecommunications on Belize were researched.
Extensive research was also conducted on the role of telecommunications in various sectors like education, health, agriculture, transportation, and other activities. The primary focus was to use the experience of Belize by studying the applications and findings which are relevant to the country. Recent reports and studies on Belize, its economy, and its telecommunication sector were used as research material for this paper. Publications are also considered as they present theory or analysis of critical issues and applications. Numerous sources of information were used to prepare the literature review.
Several categories of research information are used to compile the results and content of the paper. References on telecommunications in general were used to provide an introduction and scope of study. Studies comparing Belize and its neighbors were also used to determine the success of globalization and telecommunications sector in the political, economic, social, and cultural context of the country. The role of telecommunication in rural development, agriculture, education, health, agriculture, disaster management, business, and trade were also extensively studied using various databases, publications, and studies.
Selected studies and documents were used because the type of studies available would lead to an extremely lengthy paper. Scope of study The research methodology is the set of processes used to collect and analyze data. Research methodology is defined as a structured set of guidelines or activities to assist in generating valid and reliable research results. This part describes the research methods and procedures used to obtain and analyze data in this study. Research design reflects the structure of the research project and provides the means of collecting suitable data to answer the research questions.
This paper seeks to identify the social, political, economic and cultural issues and outcomes which have emerged from globalization in Belize. It reviews the telecommunication sector of the country by looking at the reports of BTL. It studies the performance of the BTL. It highlights the achievements and failures of the company. It researches and examines the company’s services in the light of the government’s telecommunication industry. A detailed analysis is conducted about the success and failure of globalization in Belize by using studies which provide analysis on the economic performance of the country.
Finally the study uses research material to examine the globalization success or failure in Belize as compared with its neighbors. The impact of telecommunications industry in the light of globalization is studied and researched extensively in the paper. Research Questions The following research questions are asked in this paper: 1. How has globalization affected the economic development of Belize? 2. How has globalization affected the welfare of its people? 3. How has globalization affected the success of the dominant telecommunications company BTL? Content and Analysis
This chapter looks at the results of the research conducted. It is divided into three parts which answer the three research questions. Globalization and economic development of Belize Success of globalization Globalization has assisted Belize in opening up its financial markets because of the levels of social spending. The economy has become more open because of increased public expenditures. It also has launched a positive effect on the interaction of democracy and globalization on the size of total revenue. Globalization does not depress social expenditures.
Belize has diversity in terms of the level of development and social protection. It has had dramatic impact on the economies and social policy of Belize as compared with industrial countries. Creating an export oriented model led to a significant lowering of tariffs from an average of forty nine percent in the mid 1980s to eleven percent by the late 1990s (Jeffrey 69, 2006). Controls on capital markets have also been reduced which is still lower as compared with advanced industrial countries. The index of liberalization has increased in the country from sixty eight to seventy seven in the 1990s.
The country however remains dependant on external capital flows because of the low savings rates. It also suffers from a high foreign debt which exposes the economy to market fluctuations. Pressure exerted by IMF and World Bank have called for pursuing neo liberal directions for the economy. Social expenditures dropped in the 1980s while they recovered in the 1990s. Social policy reforms have taken place that has reduced the general social insurance schemes. The private sector has played a prominent part in the provision of pensions and health care.
Globalization has assisted Belize in increasing its literacy rate from fifty percent in the early 1980s to eighty percent in the first part of the twenty first century. The life expectancy of the country has increased to around seventy two. This was only forty percent an estimated four decades ago. The average worker is also benefiting with better wages. Better standard of living, higher wages, advances in science and technology and increase in democracy have been the successes of the globalization experiment in Belize. Globalization has also assisted in the increase of management and professional specialty jobs.
Between 1983 and 2000 the total number of such positions has increased to a percentage of forty percent in Belize (Barnett 65, 2000). Many American and European firms have set up operations in Belize which has led to the introduction of advanced technology and business practices. This has also added the benefit of spillover effects into the rest of the economy as demonstrated by the robust and competitive private sector of Belize. Globalization has increased the number of jobs in Belize. It also has increased the efficiency of producing goods and providing services at lower costs and higher profits.
The incentive to produce has also increased which has benefited the business sector of Belize. The standard of living has increased with technology making efficient transportation possible (Barnett 65, 2000). The division of labor has enabled Belize to maximize the value of its output while resources have not been wasted in goods production that could be imported more cheaply. Failures of globalization Globalization has a considerable impact in social policy by the debt crisis and influence of international donors.
This has greatly accelerated the integration of Belize with the international market. Opening the economy has also created greater vulnerability to external factors. This has resulted in loss of income and jobs. This leads to demands for systems of social protection, income support, and free or subsidized health care. Currently the government provides income support for old age. One major impact of globalization has the assumption that democracy will be sustained in Belize. The tradition of democracy is significant as it has led to better health and education services.
GDP per capita has also increased which indicates that Belize has invested substantial amounts of money in health and education (Bary 125, 2005). However the size of the external debt renders the health and education spending to contribute to budget deficits because of extensive borrowing from foreign donors. A number of macroeconomic trends seem to indicate the government’s success in reducing inflation, modifying the structure of employment, and opening the economy for foreign investors. Local production systems are competing with each other in Belize which allows them to see their position within a wider integrated economy.
Another negative impact is that countries like Belize do not have any choice about the restrictions and conditions which are associated with the policies of international organizations like World Bank and IMF. Transnational corporate also have been able to take advantage and demand favorable economic policies to invest in the country. This has alienated some of the domestic interest groups like business and labor (Bary 125, 2005). By opening up with the international economy, Belize has also suffered from a decrease in the amount of power it has over its economic policy.
Pressure from international organizations like the World Bank and IMF has pushed the country to remove barriers and allow foreign direct investment to increase trade. Further coercive policies and regulations have created income equalities in the country. Despite the substantial increase in trade and foreign investment, the level of poverty remains high in the country. Liberal financial and trade policies have caused significant inequality and stability in terms of employment and income while reducing the ability of the Belizean government to control its policies.
Diminished controls over monetary policies and exchange rates have created income inequalities (Bolland 46, 2006). Certain economic policies have bred increased poverty rates. The results of foreign direct investment on employment and growth have also been mixed. The foreign investment has been saturated in certain areas. Some sectors of the economy have minimal investment. The economy of Belize has become dependant on the international market by the growing volume of cross border finance, investment, goods, and services. The majority of Belizean residents live in the rural areas in contrast to the elite of the country.
The differences between social classes have increased after the advent of globalization in Belize. Capital account liberalization has created a negative impact on the local banks of Belize as they are vulnerable to financial crisis and external shocks (Bolland 46, 2006). The decrease in tariffs has also led to decline in production of certain agricultural products. Belize and its neighbors Globalization has radically transformed the economies of Belize and its neighbors from plantation and agricultural based industries to reliance on exports.
Each country has made attempts to diversify their export base and respond to the fluctuations of the market. The struggle to maintain stability due to external shocks has been mixed for many countries. The country’s economic and social prosperity have been considerably greater than its neighbors. The currency has been linked with the US dollar which has enhanced stability through low inflation. In contrast with other states which have suffered from bouts of civil war, instability, dictatorships, terrorism, Belize has a two party system of democracy which is modeled on that of the United Kingdom and United States of America.
Tourism, agriculture, financial services and limited manufacturing have enabled the country to have a better economic performance as compared with its neighbors. The economy has been vulnerable to external market factors. The major trading partners of the country have been the Europe, US, Mexico, and Guatemala (Broad 38, 2007). Foreign trade remains the major feature of the economy. The country also enjoys regional membership in CARICOM which aims to develop the agriculture sector for commercial purposes. The extensive investment of the United States has assisted the country in increasing its standard of living as compared with its neighbors.
The small size of the country has also helped it to remain free from civil strife, wars, terrorism, and dictatorship (Fernandez 52, 2006). The tradition of democracy has helped in the creation of a relatively stable and open society which is immune to military or totalitarian regimes. Globalization and BTL The impact of globalization on BTL has been positive with increased indicators which show major progress in increasing levels and growth. The 1990s witnessed moderate economic growth for Belize which resulted in a record growth of telephone services with an average annual growth rate of ten percent.
Also with the increase in teledensity, there have been improvements in network modernization (BTL, 2008). The efficiency of BTL has added to the benefits. The percentage of digital lines is reported to increase by the end of the decade. The number of lines per employee has also increased which points towards an increased growth path that tends to reach efficiency levels which are similar to developed countries. The objectives of the telecommunications reform in Belize have been mixed. The achievements in terms of penetration and access are uneven.
There is an internal growth gap in urban areas with higher access as compared with lower telephone penetration levels in the rural areas. This limitation has been caused by the inequalities of the telecommunications infrastructure. Metropolitan areas tend to have most of the infrastructure concentrated while minimum services are offered in rural areas. Growth in the telecommunications sector has been slow in 2007 because of the high costs of installing the network and lack of profitability of the service in rural areas (BTL, 2008).
Mobile telephone services together with changes in technology have begun to experience an accelerated process of growth in Belize. The mobile phone market in Belize enjoys less regulatory dependence and the need for survival of the dominant company. The overtaking of fixed telephone services by mobile services was driven by the introduction of pre-paid systems. The average growth in users of mobile telephony was thirty percent in Belize in 2007. BTL has entered into a consolidation process where mobile telephone services are becoming part of the picture.
The level of dynamism and growth of the telecommunications sector has been spectacular especially for the mobile telephone services (BTL, 2008). This increases the access to telecommunication services. However the government continues to focus on promoting fixed line connectivity and internet access. BTL’s introduction of mobile phones has assisted in increasing the access to telecommunication services and closing the digital divide. The pre paid option has been attractive for Belizeans because of universal access and convenience for lower economic groups.
Research also shows that Belizeans prefer mobile telephone services over traditional telecommunications access. One of the advantages has been that the lower activation cost for the user in the case of mobile services as compared with fixed telephone services. The pre paid option also offers attractive alternatives for people because it allows the user to control costs and avoid signing contracts. The operator also finds it cost effective because it does not have to send monthly account balances. BTL mobile telephone services have lower costs in terms of initial costs and usage costs.
The cost of mobile telephone services is half that of fixed telephone services. The number of mobile phone subscribers has increased from nine percent to thirty percent in 2007 (BTL, 2008). BTL has improved its performance since the advent of globalization because of lower transaction costs and reduced uncertainty. This has increased the efficiency of markets and administrative organizations. The company has contributed in assisting agricultural companies in comparing prices in various markets. It allows them to obtain the highest prices for their produce and eliminate dependency on local middlemen.
It also enables them to modify their products and respond to market demand (BTL, 2008). BTL has also helped to assist organizations in ordering spare parts and immediate contact with technicians which can reduce time lost due to broken machinery. Business organizations have also reduced their inventories because replacements can be ordered and delivered as needed. Contact between producers and shippers can be arranged on schedules for delivery of products to markets which reduces the risk of spoilage. It also has assisted in significant savings in personnel time and travel costs.
BTL has also assisted in maximizing the efficiency of shipping so that trips are not wasted while consumption of fuel is minimized. Industries are also migrating to rural areas which allows for decentralization of economic activities. BTL’s mobile phone services have also increased as rural areas prefer them for their economic development. It allows rural areas to use them heavily and spend their income on mobile phone services (BTL, 2008). The demand for mobile phones is heavy in rural and remote areas because of the perceived contribution towards the rural economy.
BTL has become highly popular because of its cheap services. The telecommunications sector in Belize is dominated by BTL which has a monopoly on telecommunication services in the country. The 1990s witnessed an annual growth of lines which averaged fifteen percent (BTL, 2008). Line installation has been focused in urban areas which account for sixty five percent of total lines (BTL, 2008). Despite the expansion in the number of fixed lines, the investment has not been sufficient to cover demand for the service. The cellular market has been one of the fastest growing in 2006 and 2007.
Still BTL faces the challenge of meeting the growing demand of basic services and data communications. A fast growing internet market has also not satisfied the expectations of consumers. The liberalization of the market has brought benefits as the country uses resources to meet new demands. The mobile sector has the longest growth rate because of the rise in standards of living. The mobile sector is also attractive because of its reliability, efficiency, and low cost as compared with the fixed telephone services.
Globalization has also helped BTL in digitizing the telecommunications system as the proportion has grown from thirty percent in 1998 to fifty percent in 2007 (BTL, 2008). BTL’s fiber optic network links several neighboring countries. The network allows connections to submarine cables and networks operated by other countries. BTL provides cellular services to a large number of subscribers. The cellular service has increased its coverage in the past years with services being moderately good for consumers. Liberalization has enhanced the ability of BTL to purchase and acquire cellular phone technology for consumers.
Telecommunications reform has assisted BTL in improving its efficiency and meeting the demands of the changing environment. The government wants to give BTL complete administrative, technical, and financial independence with some functions controlled by the government. It also aims to allow for joint ventures and strategic alliances with other companies. Restrictions on foreign participation are also reputed to be removed by the government. It aims to state the public interest of modernizing and developing telecommunications through the process of liberalization of the market in order to allow market participation.
A capital investment program to upgrade the country’s GSM cellular service and deploying wireless technologies in the rural areas was announced in 2007 (BTL, 2008). The company also increased funding for network development by investing an estimated forty three million dollars. It also installed eight hundred and fifty MHz frequency equipment to increase the coverage of cellular phone consumers. An updated prepaid intelligent billing system was launched in 2006 which would facilitate and provide user friendly services (BTL, 2008).
This program was also reputed to stimulate demand for mobile phone services of the company. A new wireless network with a frequency of four hundred and fifty MHz has also been proposed which will provide telecommunications services for businessmen, professionals, government officials, security forces, fishermen, and other residents with mobile phone services (BTL, 2008). The company’s fixed line services have not been successful because of globalization. This is because of the unstable economy and low population in large parts of the country.
Fixed lines are concentrated in the urban areas where they provide services for certain customer groups. BTL has reported losses in fixed line domestic services which include line access charges and per minute call traffic. BTL has also not increased customer rates from 2001 till 2007. It also implemented several reductions in price for various data communication and satellite services. Internet capacity tariff was reduced by a percentage of ninety percent. Tariff reductions have assisted in increasing the number of consumers. DigiCell prepaid customers were offered discounts of twenty five cents for calls.
Other features were also introduced which included further discounts for consumers who call for more than five minutes. SMS to email was a service offered for prepaid customers which allowed them to send messages throughout the world. The number of DigiCell consumers rose from ninety three thousand to one hundred thousand in 2007 (BTL, 2008). The total number of cellular consumers has risen to one hundred and eighteen thousand in 2007 (BTL, 2008). Siemens has been providing technical assistance to BTL for the maintenance of the cellular network.
The company has also aimed to create modern cellular equipment along with high speed internet services to consumers. Globalization has assisted the company in increasing its cellular business which now comprises a major portion of its net income. The rapid growth of BTL has allowed it to implement customer friendly billing and care systems. Outdated systems have been gradually phased out. Post paid customer and billing system will be implemented in various stages of 2008 (BTL, 2008). BTL will be able to access information of consumers which will help it to increase its reliability and effectiveness.
Other major developments have been the use of information technology systems to enhance the administrative, technical, and financial functions of the organization. DSL and wireless internet services are also provided by BTL which has been expanded in 2007 (BTL, 2008). Business and home users are provided various packages by the use of partnerships with international service providers. The coverage of internet has also been increased in rural areas like Teakettle and Pomona. Other rural areas like Roaring Creek Village, Riviera Area, Flores, etc were also provided better internet services.
BTL will also implement wireless communication system in different parts of the country. This will assist the company in increasing its coverage of rural areas. The number of internet users increased to six thousand in 2007. The company also provides links to smaller internet service providers. Over a period of five years the demand for internet has increased with the company decreasing prices, improving service, and allowing customers to pay fixed charges. Revenues from internet services remain a small proportion of the company’s revenue. They account for seven percent of the total revenue of BTL.
Globalization has also allowed the company to increase its profits from the international services which it provides. The reduction in international tariffs was also widely implemented in 2007 which allows people to make international calls to Belize at substantially lower rates. WebTalk was a popular service which was launched for internet users. This service allowed users to make international calls using VoIP connections (BTL, 2008). The minute rates are some of the cheapest as compared with other neighboring countries. Prepaid cards have also been launched which allow people to call at discounted rates.
BTL charges the majority of its revenue on a per minute basis for fixed and cellular services. Internet and fixed line charges account for fourteen percent of the total revenue. The company experienced an increase of six million dollars by its provision of pre paid services. It also reported a profit of two million dollars increase in cellular phone services. Another three million dollars increase was reported for the provision of internet and data communication services (BTL, 2008). However these profits were negated by the reduction in several types of domestic and international customer tariffs.
Cellular phone continues to remain the most attractive and growing market for BTL. The company also reported a decline of three million for outbound revenues. The year 2007 also witnessed substantial phasing out of obsolete and outdated equipment and systems (BTL, 2008). Operating costs were increased as the company implemented state of the art billing and customer care systems. New information technology systems were also implemented which increased the efficiency and effectiveness of the administrative, financial, and technical functions of the organization.
The company managed to improve its capital ratio and cash in hand and on short term deposits. An estimated nineteen million dollars were spent to purchase property from the Belizean government. The company also witnessed a reduction in its debt due to the fiscal discipline and prudent financial policies of the management. Shareholders of the company also witnessed increased returns from their shares in 2007. An estimated forty one million dollars was increased in shares for stakeholders in 2007 (BTL, 2008). Globalization and welfare of people Globalization has impacted the welfare of the Belizean people.
Some values of globalization have led to the replacement of traditional values with new ideas. Workers have been working for longer hours. On an optimistic note, it is linked with the spread of democracy in reality and with increasing public consciousness on issues such as gender partiality, human rights and ability to maintain progress. The people of Belize are helping to form ethical framework laid on the foundations of universal morals, values and principles. The challenge for them is to implement these rights in practice. Globalization has significant positive effects on the livelihood of people of Belize.
Since 1990s, several foreign corporations have been established in Belize (Fernandez 52, 2006). People over there have started to capture these chances. They have started their own businesses and expanded them within the country as well across borders. Gradually, they have made investments and produced job opportunities for others. Growing and increasing these opportunities is the key to maintain growth and prosperity in Belize. Consumers in Belize also benefit from globalization because it allows them to access to a broad and extensive option of superior quality products.
The higher wages and lower prices which are the result from dedicated and expert manufacture and international exchange mean that the consumers of Belize also get improved worth for their money. However, the result was that people from rural regions abandoned their homes and moved to cities for better working conditions in Belize. Privatization and other policies have also sped up the political-economic corruption in Belize which has tarnished the reputation of democracy, fortified the general height of political apathy and encouraged the de-politicization of Belize society.
As a result, the development in Belize society is subjected to inefficient management of country’s affair, political corruption, inefficient legal structure, etc. Globalization is creating a new Belize socio-cultural identity, one that is generated by personal success, ground-breaking entrepreneurialism, the obvious use of foreign products, secularization, privatization social welfare and international accessibility and mobility. Belizean women have also gained from globalization as the workforce has increased. Education has helped the Belizean woman to become better equipped and independent (Jeffrey 70, 2006).
They have mastered the necessary skills which are vital in modern society. They have created opportunities by improving communications skills. Globalization has also helped Belizean women in obtaining computer literacy. Information technology skills have been enhanced which are the requirements of globalization. The internet has helped created opportunities for female workers. Belize has benefited from globalization as the strides in communication, national banks, and investment companies have created new opportunities for finance. This has generated income programs like trading of money, stock, and bonds.
These communication techniques have radically reduced communication costs and time to a bare minimum. Belizean people have also found that they can access a wide variety of services as a result of globalization. The internet has become a popular tool for sale and purchase of goods and commodities (Jeffrey 70, 2006). The policies of free trade also ensure that the vital necessities of life like food, clothes, equipment, products, etc are easy to obtain. Technology has also opened new mediums of communications while reducing the costs. Belizean people have found cheap and effective means of communication with each other.
Societies have become united while being exposed to different cultures. Belizean government also has more efficient access to pharmaceuticals, health equipment, and educational equipment because of globalization. Health statistics have substantially improved as citizens can now obtain better health care and modern educational tools. Transportation system has improved in Belize which allows citizens to move to other countries at cheap rates (Barnett 65, 2000). Tourism which is the backbone of the economy has also flourished because of the globalization.
Regional tourists visit the country purchasing goods for personal use. This increases the revenue of the state. Cultural events are also held which attract large number of domestic and regional tourists. This generates revenue for the Belizean government. The improvement in transportation and communication allows international tourists to visit Belize at cheap and less time consuming rates. Business has also been enhanced because of the investments in transportation as it makes it easier for companies to sell or purchase goods from other countries.
Belize exports agricultural products which require efficient transportation methods to reduce the incidence of spoilage (Barnett 66, 2000). The expansion of companies to other countries is also beneficial because it provides important links between Belize and its neighbors. It acts as a type of advertisement for people who seek to invest in Belize. Globalization has provided a framework for progress along political, social and economic spheres. There have been some adverse effects of globalization on the people of Belize. Local and regional tensions have increased while the prospects of conflict with regional states have increased.
In certain cases globalization has become a disruptive force by fragmenting the state of Belize. Some groups inside Belize have opposed globalization because of their strong nationalism and sense of identity (Barnett 69, 2000). Trade agreements with larger countries has allowed for the removal of all obstacles to corporate infiltration of Belize. Companies extend their businesses to Belize where labor force allows them to accumulate high profits at the expense of local workers and government. They also exploit Belize as they employ person outside the country work in the higher paying jobs.
Most of the profits made by these corporations is sent outside the region and not spent inside Belize. The trade of Belize has also been affected because corporations have the technology and financial resources to produce goods and services at cheaper prices and bulk quantities as compared with the domestic market. Some local business organizations in Belize have lost their identities in the global trade (Barnett 68, 2000). Globalization also creates a strong sense of nationalism because it restricts the ability of Belizean government to control its policies.
It has allowed free access to markets which were once protected. The country has found itself open to unfair competition with vastly larger neighboring countries. The economy has been vulnerable to the world price of commodities like sugar cane, bananas and other agricultural products. Globalization has a negative impact on the culture of Belize. The people of Belize are exposed to the music, news, sporting events, television shows, and movies which come out of the United States of America. The younger citizens of Belize are attracted to the culture of the US.
They have marginalized the traditional music and arts of their country. Cultural events of the country have been ignored by the youth of Belize. Since American media has a culture of violence, these negative aspects have been transferred to the youth of Belize. There have been rise in crime and violence in the country. Health and environment also have negative repercussions from the advent of globalization. Transportation technology has made communications more efficient and less time consuming but it has also contributed to the spread of deadly and infectious diseases like HIV/AIDS (Neuman 30, 2003).
The country is also at risk of global warming which is a negative byproduct of globalization. Global warming has occurred because of the burning of fossil fuels and creation of nuclear waste. Industrialized countries produce and exchange goods rapidly which forces the environment to become more lethal and toxic. Small countries like Belize have been affected by the rise of global warming. They are at threat because of the changes in weather patterns, increased costs in fuels, inflation, and potential environmental disasters (Neuman 30, 2003).
The environmental degradation of Belize has been one of the negative aspects of globalization. Many animal species are at threat because of environmental pollution in Belize. Recommendations Belize has witnessed the positive and negative impact of globalization. The opening of its economy and markets has helped to increase the level of social spending in the country. The health and education indicators have also improved. The economy has also registered moderate economic growth. Globalization has helped the country to increase the standard of living.
Belize has a robust economy which is dependant on financial services, sugar cane, shrimp, tourism, and oil reserves. The economy however faces challenges because of the substantial foreign debt. The political system is open and tolerant as compared with regional states. But it is recommended that Belize continue to focus on political transparency and accountability. The political system must be enhanced by ensuring that policy making is strong. The institutions of the country must also be strengthened which would assist the country in making better policy decisions.
The Belizean government must strive to limit the negative affects of globalization. The culture of violence, crime, disease, environmental pollution is severe threats to the country. Belize Telemedia must continue to expand its network and deploy technologies in the rural areas. It must decrease its reliance on fixed telephone services which have witnessed declining revenues. It must improve the coverage and range of cellular services which is the fastest growing sector in the country. It is also recommended that BTL continue to enhance its services by promoting efficiency and reliability.
BTL should increase its fixed line, cellular, and internet services to the rural areas which would benefit the local economy. Conclusion Globalization is a controversial topic which has sparked fierce debates in the world. Belize is a small country located in Central America. It has been the recipient of the positive and negative aspects of globalization. On the positive side, the economy is liberal, open, and private. It has reduced its tariffs and duties on several goods. Globalization has helped the country to link with international markets.
International corporations have invested in the country which has led to the development of infrastructure and business. The country also has a robust domestic private sector which has advertised the services and goods of Belize. Tourism has substantially increased with the advent of globalization. It is a major source of revenue in the country. Tourists can now use cheap and less time consuming modes of transportation to travel to the country. The economy of Belize is still vulnerable to the external shocks of commodity prices in the world.
The increased role of multinational corporations has also reduced the ability of the government to control its policies. The youth of Belize have been influenced by the culture of the US. There has been an increase in crime and spread of diseases like HIV/AIDS. Belize Telemedia has also been successful because of globalization and trade liberalization. It has increased its network coverage and provision of various services. The company now provides cellular, fixed line, internet, and data communication services to urban and rural areas. It has also deployed wireless networks for rural residents and business organizations.
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