A Regional Warning: What Barbados Did—and What Belize Must Avoid

This second installment steps slightly beyond that foundation to examine a related—but equally important—reality: the international pressures that increasingly shape how small states design their investment frameworks in the first place.

 

While Belize is not a member of the Organisation for Economic Co-operation and Development, we voluntarily align with many of its tax and transparency standards to maintain international credibility, protect correspondent banking relationships, and preserve access to global financing. These external expectations now form part of the backdrop against which countries like Belize must attract and retain foreign direct investment.

 

That context matters. But context alone is not enough.

 

What brings urgency to this discussion is a recent and very specific policy decision taken in Barbados—the passage of the Economic Diversification and Growth Fund Bill.

 

This legislation followed Barbados’ decision to increase corporate tax rates in response to international requirements. Rather than allowing the market to adjust, or using the moment to reassess its development strategy, the Barbadian government chose to establish a publicly funded mechanism to compensate selected foreign companies for the higher taxes they now face.

 

Let us be clear about what this means.

 

Public funds are being used to offset private tax liabilities in order to retain foreign companies that might otherwise relocate. While this approach may provide short-term investment stability, it fundamentally shifts the purpose of incentives—from encouraging development to cushioning compliance.

 

That distinction should matter deeply to Belize.

 

Like Barbados, Belize faces mounting regional and international pressure. We are expected to modernize tax laws, strengthen transparency mechanisms, and align with global standards—all while remaining competitive for foreign direct investment. Compliance itself is not the risk. The risk lies in how we respond to compliance.

 

If incentives become a quiet mechanism to reimburse investors for new obligations, the national interest begins to blur.

 

Foreign direct investment must do two things—and both must be true at the same time:

1.Deliver a reasonable return to the investor, because no sustainable investment survives without profitability.

2.Advance Belize’s national development, by creating opportunities for Belizeans, strengthening local capacity, and anchoring economic activity in the country.

 

When either side of that equation is ignored, policy fails.

 

The Barbadian example illustrates what happens when incentives are driven primarily by fears of investor flight. The conversation narrows. Public scrutiny fades. And the more important question—what kind of economy are we building?—is postponed.

 

Belize cannot afford that drift.

 

If incentives are to be offered, they must be explicit in purpose and firm in design:

•Belize first—Belizean workers, Belizean suppliers, Belizean communities

•Clear expectations for job quality, skills transfer, and local participation

•Time-bound support with defined outcomes, not open-ended reassurance

 

Incentives should not exist to make policy reversals invisible. They should exist to make national goals achievable.

What Barbados has done now forms part of the regional record. It demonstrates how easily international pressure can lead governments to prioritize stability over strategy. Belize should take note—not to criticize, but to prepare.

Because if Belize does not clearly state—both in law and in practice—that foreign direct investment is a partnership with the country, and not merely a financial accommodation, we risk repeating a familiar pattern: public resources deployed quietly, long-term outcomes left uncertain, and Belizeans left asking after the fact where they fit in.

Economic development is not about choosing between investors and citizens. It is about designing policies that respect both.

Belize can do this right—but only if we remain honest about the external pressures shaping our choices, deliberate about the frameworks we adopt, and firm in the principle that incentives must serve the country first, even as investors earn their return.

That is what Belize Incentives for All is about.