When the dollars run out

Belize keeps selling off its assets to foreign companies. Now the country is bleeding itself dry to

When I first came to Belize at the time of its independence in 1981, this former British colony in Central America had an old-fashioned telephone system, fresh water piped in to nearly all towns and villages, and electricity that worked most of the time. These utilities were all in public ownership - assets that, however indirectly, were still the property of the Belizean people. Nothing was very cheap, but nothing was very expensive.

Today, the telephone company, Belize Telecommunications, is owned by Lord Ashcroft, the former treasurer of the Conservative Party; Belize Water Services by a British/Malaysian company called Biwater Shellabear; and the country's electricity supply is dominated by a Canadian hydro giant called Fortis Inc. All three of these companies - which take their dividends in US dollars - are bleeding the people and economy of Belize dry.

And now the postal service and post office, the public works department, the prison system and the port authority have been thrown into the fire sale of government goodies, as the People's United Party government searches desperately for funds to keep itself afloat. Essentially, the government will sell off Belize's assets to any foreigner who comes along with a few million dollars to spare. The ministry of housing is rumoured to be next.

Meanwhile, the Pine Ridge Forest Reserve (recently destroyed by pine bark beetles) has been leased for 50 years to a Canadian company for "reforestation", earning Belize $2m. The company, by planting trees, will earn "carbon credits"; under the1997 Kyoto Protocol on global warming, these can then be sold to Canadian power producers to offset their excessive carbon production.

Anger at the monopoly activities of Belize Tele-communications boiled over a few days before Christmas, when it delivered a surprise package of "price cuts". These cuts amounted to a small slice off the astronomical internet and overseas telephone charges, but a heavy increase in the local call, connection and service rates, which were already high. For example, line access and maintenance, which netted the company $10m in 2000, will now go up from $8 a month to $20 a month for residential phones, and from $20 a month to $50 a month for business phones. All software that can bypass the telephone system is banned; the telephone company is the exclusive "server"; and even aids such as Winfax are illegal. Users of the new "boxes" that allow cheap international telephone and internet connections are liable to large fines and even imprisonment.

Historically, Belize was dependent for its survival on sugar, citrus, bananas, fish and shrimp and, more recently, eco-tourism. It has been brought to its knees by a combination of the US-led World Trade Organisation drive against the Commonwealth preferential trade system and the sell-off of its public utilities to monopoly foreign ownership; 70 per cent of Belize's foreign earnings now go to paying off loans and meeting foreign-owned utility bills.

Within weeks of the sale of the water supply last year - the bill for this went through parliament at such speed that nobody had time to read it - Biwater Shellabear announced that it was raising the cost of sewerage connection from $80 to more than $1,000, then that it would not spend the $140m which it had promised on new capital investment because the company had been "tricked" in the fine print of the original purchase agreement.

Fortis, which now has control of Belize's electricity for 50 years, wants to build a new hydro dam. It is opposed by a remarkable alliance including not only Friends of the Earth, Greenpeace and the World Wildlife Fund, but also, it is claimed, Princess Anne, Robert F Kennedy Jr and the actor Harrison Ford (see www.stopfortis.com).

The valleys and plains that will be flooded if the dam is built are breeding areas for wildlife unique to Central America and home to a number of Mayan temples and archeological sites, as yet unexcavated. This area is the base of spectacularly beautiful attractions upon which Belize's entire inland tourism economy is dependent.

It has recently emerged that the bedrock at the site for the new dam is riddled with faults and was wrongly identified as granite by the experts from Fortis. According to one geologist: "The dam could collapse under pressure and wipe out entire towns and villages downstream."

"It's about bullying, it's about profiteering, it's a boondoggle that is the worst example of globalisation," said Robert F Kennedy Jr, an environmental lawyer and nephew of John F Kennedy, after he flew over the dam site just before Christmas. "A billion-dollar international company is going to enrich itself by impoverishing the people of Belize." The company has started bulldozing to get roads into the site, while denying in public that it has begun work.

Not all the members of the People's United Party are happy about the turn of events. Jorge Espat resigned in disgust as party chairman and minister of security. "Too few control too much," he said, "and too many have too little, a condition made worse by the conversion of public assets into unregulated private monopolies. How can we celebrate prosperity for the few? Trickle-down economics is a damned failure, and globalisation as we have experienced it so far will make us greater servants."

The people of Belize are fighting back, with all social classes and all ethnic groups - Creole, Garifuna, Mayan, mestizo, Chinese, east Indian, Lebanese or European - for once united. What worries the chamber of commerce is the shortage of US dollars, as the country's currency reserves are drained by payments to foreign-owned companies. All shipping companies into Belize now demand US dollars in advance, and Lord Ashcroft himself complains that he cannot get his dividends in dollars.

Even Belize's normally pacific Mennonite farmers, the backbone of the farming industry, are protesting because they are unable to get US dollars for fertilisers and animal feed.

Three weeks of marches in Belize City against the new telephone charges prompted the government to impose an order forcing the company to revert to the tariffs charged before 1 December, though the company insists that customers must pay the higher rates for the month of December. A march in the capital city of Belmopan against Fortis and its plans for the new dam led the government hastily to bus in a counter-march. Unfortunately, when they were interviewed on television, the pro-government marchers didn't know what they were marching for.

Now a new political group, We the People, which disdains the word "party", is emerging to fight the next election, due in two years. It has no financial backers, but it is rapidly gaining supporters, including a large majority of Belize's cane-workers in the north, who have struggled since the end of the Commonwealth preferences. They point out that if the government had opted for a biomass energy unit using cane waste, instead of the proposed dam, it could have revived the industry and employed thousands.

"What we have today is worse than colonialism," states Francis Gegg, a We the People candidate who will stand against Belize's prime minister, Said Musa. Estimates suggest that We the People could win 12 seats in a general election, leaving the opposition United Democratic Party with nine seats and the current ruling party with just eight.

This is the second article in a New Statesman series on privatisation around the world