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The "Corozal Free Zone"
(Actually, CFZ, which was on all the license plates, stood
for "Commercial Free Zone", but it's so close to Corozal...)
The Basic Idea.
The basic idea behind a free zone is that businesses locate there, and can
import goods duty free for manufacturing and resale. In the case of this
free zone, retail sales are not permitted to Belizeans or local gringos. Mexicans make up the
principal customers for shops here, but tourist gringos will also find some items at
remarkably good prices. These include tools, liquor, shoes, and quality
white goods.
 Big
Shops. The
Nike logo labels a shoe store, full of "brand name" shoes.
Prices are unbelievably low. (When something is unbelievable, perhaps you
shouldn't believe it, eh?) Cars park everywhere, anywhere. The
building on the left is new, built after the price of land skyrocketed.
The VW is the favorite vehicle of Mexicans, who manufacture them for the
world.
 Small
Shops are lined up along the newer streets like you see here. There
are literally hundreds of these shops going in -- and going out. The zone is
crying for manufacturing; instead they get more retailers.
The cars you see indicate that the Mexicans visiting the zone
are among the affluent few.
 Traffic
Jam. It's
late in the afternoon, and cars are backed up for a mile, from Mexico, across the
bridge and well into the zone. The free zone is hurting Chetumal's economy;
to make the zone harder to use, the Mexican
officios are searching every car.
The Old West. In the US, developers would have laid out the free zone, put
in streets, landscaping and services, and then the businesses would have come in
and begin to build and trade. Here, the developers didn't have much money,
so the businesses started up and now they are putting in streets and
services. Landscaping isn't very important to Belizeans, so who knows when
that will happen. Until it does, the place is really a mess.
My friend Harold likened the place to a boom town in the old West. He
finds it exciting and so do I. I just wish I could shop there!
Gambling. They just broke ground for the Free
Zone's first Casino. This will certainly change the complexion of the zone. Some suggest that people
might drive all the way from Cancún to gamble. Of course, Sr.
Ric y Sus Amigos hope that it will be a venue for live country music!!
"A Bird Nest on the Ground." It
costs 5000 dollah, plus a 1000 dollah annual fee to register as a merchant in
the zone. This makes the zone a "rich boy's club" Zone businessmen can buy a duty-free vehicle to use in the zone, and of course,
since no one lives in the zone, to commute to and from the zone.
Since the duty on a new Ford pickup is 38.5% (see here), this is incentive enough to attract
investors to the zone. In the past, a Belizean retailer could have a shop
in the zone and sell merchandise wholesale to his business in
Belize. This activity lowered prices significantly in
Corozal. UPDATE:
In fact, the wholesale prices were so low that the GOB decided that they were
being done out of some honest duty revenue, so, effective May 2001, there are no
wholesales to Belizean businesses. UPDATE:
Effective June 2001, wholesales of over $5000 are permitted. <grin>
The Fly in the Ointment. The free zone is
booming, primarily because of gasoline sales. The price of gas is a
critical success factor in taxi cab operation, and for now, gas is selling
tax-free in the zone at US prices. As the price of gas has gone up in the
US, the price in the zone has gone up. This could seriously impact the
zone, if a) Mexican gas gets cheaper or b) US prices go up
enough. NEW:
(Jul 2002) Oh, my gosh!! Pemex (Mexican gas
company) just cut their prices in Chetumal to 3 cents below
the price in the free zone. Stay tuned for latest
developments.
Another Fly (or maybe a scorpion). Gringo
tourists should be able to shop in the zone. After all, they are paying
$50 dollah a month to stay here as a tourist. However, petty officios at
the gate to the free zone will try to keep you out. (Why I don't
know.) I discuss this attitude elsewhere on this website, and it is well
described here. Lately,
they have been telling gringos that it is illegal to take pictures in the
zone. It isn't. Belize is a free country, and the zone is a part of
it.
New:
(Sep 2001) Holy Smoke -- Yet
Another Fly!! Wal-Mart has
stores in Merida, Cancun, and Villa
Hermosa. They're closing in on
Chetumal! I tried to get
official word from the Corp, but they're
not talking! Unofficially, we know
that they bought property in "Chet"
and they plan to use local Gringos as
employees, especially if they worked for Wal-Mart
before in the states. A Wal-Mart in
Chetumal would do amazing things to the
Free Zone. Belizeans can't shop in
the Free Zone, but they could shop at Wal-Mart.
Stay tuned for further developments!!
The Bottom Line. Mexicans bring pesos into the
zone. Those pesos flow into Belize, especially since 900 Belizeans work
here, and hundreds more support the zone from Belize City. This has
significantly improved the economy of Northern Belize in the past two
years.
NEW:
Links: Here is the
brand new web site for the Free Zone, done by my friends Jan
and Judy Wilson. On another site, KMPG did a nice analysis of the theoretical basis for the free zone
but it's gone now. Another (very funny) description can be found here,
along with pictures. NEWER: Oops. That description was too
funny for public consumption and doesn't seem to be available anymore.
Tooooo bad. Also, the KMPG site has disappeared. <hee, hee>
OOPS:
(2004) The CFCMA never paid Jan & Judy Wilson for the work they did, so they took
the site down! A very sanitized presentation can be found here.
There are so many shinanigans going on in the CFZ, they can't stand too much
publicity! Oh -- by the way, Wal-Mex (Mexican Wal-Mart) did come into
Chetumal, along with a big snazzy mall. Of course, you can't get the same cheap Chinese goods in Mexico so there's still
a fan club for the CFZ.
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