Belize has a rich history that datesback thousands of years. The country was first inhabited bythe Mayans with records of their presence dating from 1500BC. The first recorded European settlement was establishedcirca 1638 by the British who called the country the Colonyof British Honduras. The official name of the territory waschanged from British Honduras to Belize in June 1973, andfull independence was granted on September 21, 1981. Therewere several obstacles in the path toward independence, asillustrated by Guatemala's long-standing claim to theentire territory. It was only in November 1980, afterseveral frustrated negotiations with Guatemala that Belizeandiplomacy managed to obtain international support that ledto the United Nations passing of a resolution that demandedthe independence of Belize, but it was only in 1992 thatGuatemala formally recognized Belize’s independence. Afterindependence, Belize successfully implemented a developmentstrategy which emphasized economic diversification andprivate sector development at a time where the terms oftrade were favorable to the country. As a small, openeconomy, that is also extremely vulnerable to climate changeand natural disasters, Belize’s ability to promote fasterpoverty reduction and greater shared prosperity will dependon how well the country deals with its main sources ofvulnerability. In addition to weaknesses in infrastructureand in the skills of the labor force, several studies havepinpointed crime and violence and problems in the financialsector as important deterrents to growth. The analysis inthis report confirms the centrality of these two factors.The predicament in the financial sector is largely driven bythe small economic size of the country and the lack ofcompetition in the banking sector, a common feature in smallstate economies that limits the availability of credit tosmall and medium enterprises. Stability issues in the sectorcomplicate matters as these impose non-negligible risks tothe health of the financial sector. On the other hand, therise in the inflow of migrants from neighboring CentralAmerican countries with a history of crime and violence hasbeen raised as a potential cause for high crime rates inBelize, but there is not enough evidence to substantiatethat claim at this point. Policy interventions that couldhelp halt the rise in criminality rates include ramping upthe quality of education, keeping children at school,promoting education equivalency programs and job training,besides more direct approaches such as investing in safeneighborhood programs.
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