Unlike most islands in the Caribbean and other countries in Central America, Belize's economy was not founded on the cash crop of sugarcane, but on forestry products and logging. As a result, Belize experienced different economic conditions than in sugarcane-dominated British colonies elsewhere in the Caribbean.
Settlers in Belize created many small timber works along rivers, creeks, and lagoons in order to conveniently export the cut logwood, which was the country's first exported product. However, logwood didn't remain the primary export of Belize because the abundance of logwood outweighed the amount needed in the market. Also, the newly developed man-made dyes in Europe were cheaper, which made the need for logwood dye obsolete. Exporting mahogany turned out to be more the profitable and enduring alternative to exporting logwood.
Until the middle of the 20th century, mahogany commanded the political, social, and economic life of Belize. In the 18th century, mahogany wood was considered valuable by many workers in many different trades, including European cabinet makers, shipbuilders, and builders of railroad carriers. The forests of Belize were rich in mahogany, and the British settlers were anxious to begin cutting the precious wood. Because mahogany took more work, land, and money to log than logwood, settlements in Belize underwent some drastic changes. For instance, an elite group of wealthy individuals dominated the ownership of the land and labor.
The mahogany logging industry also suffered from fluctuations in the market, just as logwood had. In some years, the demand for mahogany was high and prices were good; during other years, the mahogany industry suffered losses. Although the export of this wood was high, prices began to drop, and between 1835 and 1841, the price of mahogany dropped by 50 percent. Another problem was that no new trees were being planted. Because mahogany trees take many years to reach maturity, loggers were forced to head deeper into forests in search of more trees. This increased labor effort increased the cost of logging. With market prices dropping and logging costs rising, the mahogany logging industry became less profitable.
Since British settlers had to export their wood and needed to import their supplies, merchants and traders in Belize became wealthy and powerful. Trade with Central America, which sent about four-fifths of its trade through Belize, grew substantially in the 1920s. Merchants also profited from the trade of contraband with the confederates during the U.S. Civil War.
Settlers in Belize tried to produce sugarcane in hopes of becoming as profitable as the sugarcane plantations in the Caribbean. But the cultivation of sugarcane crops didn't last very long during the 19th century, and many plantations closed. Settlers made other attempts in commercial agriculture, including the farming of crops like bananas, coconuts, and cacao, and the production of cohune oil. Unfortunately, many farmers that tried to develop commercial agriculture in Belize failed.
One reason for their lack of success was the British taxation on crops from Belize, which was higher than in other colonies. Because products from Belize were more expensive, very few people bought them. In turn, agriculture wasn't profitable during the period. However, there was a turn of events in Belize's history that effected the agriculture industry.
In the middle of the 20th century, the foundation of Belize's economy shifted from the forestry industry to plantation-style agriculture with the cultivation of citrus and bananas in the south and sugarcane in the north. Today, the main segments of Belize's economy are agriculture, the manufacturing of agro-products, and the service and tourism industry. These three areas generate the most in foreign exchange earnings. About 60 percent of the country's earnings from merchandise exports come from bananas, citrus, and sugar. Belize's primary trading partners are the United States and the United Kingdom. Environmental resources like land, water, and forests are great strengths of the Belizean economy, creating great opportunities for eco-tourism.
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