i am curious to know what the belizean government has wasted so much money on. are there specific projects that have created black holes of loss? i'd be interested in doing some research if i knew.

cheers

How long do you want the list to be? LOL

I think that is one of the complaints that the IMF has against Belize and other small nations. It has a big portion of it funds going to such things as government buildings instead of government programs that aid the people.
Two such examples would be the new Central Bank Building and one that has had ongoing problems for several years is the Karl Huesner(sp) Memorial Hospital. Oops I forgot the tourist village that is located downtown right by the swingbridge. That was suppose to be a winner, but think its is now been a loser for many years.
Some of the winners are the Southern Hospital, the completion of the Hummingbird and the paving of the Southern Highway. Also the new airport gets my vote.

What about all the Dodge diesel pickup trucks that were donated to the government?
They all seem to have disappeared ages ago.

[This message has been edited by kcbc (edited 01-31-2002).]

One of the reasons the PUP was elected was they promised to build 10,000 concrete houses in new subdivisions to give folks more permanent and hurricane resistant structures to live in in Belize City. And they were going to create thousands of new jobs. Both of those lofty promises were on the basis of GOB borrowed funds and neither of the promises quite panned out according to plans.
But the debt was incurred and is owing.

Voters were lead to believe the houses would be free, which they're not. The cost for them is reduced, but buyers still have to qualify for the loan which is where the newly created jobs came into the picture.

Well, it looked good on paper but it turns out there aren't many takers so the developments stand largely empty though the houses are there and so is the government's outstanding debt.

And, I reckon, some brother-in-law and his government official relative made some money on the transaction at the expense of the people of Belize.

[This message has been edited by ckocian (edited 02-02-2002).]

bywarren

Thanks for reposting. It is sooo interesting that I decided to post it.

Since this "calculation" was made in 2000
I wonder what the same calculation would show now ????

REPORT #288 May 2000
BELIZE DOLLAR IS WORTH .03 CENTS USA? PLAYING WITH THE NUMBERS AND TRYING TO FIGURE THE STATE OF THE BELIZEAN ECONOMY!


Produced by the Belize Development Trust


If the Belize Dollar is worth only .03 USA cents by some calculations, in May, 2000, and the official exchange rate is $2 Belize dollars for $1 USA dollar, or a Belize dollar is officially exchanged for .50 cents USA. How does the government do this magic illusion? Is there sleight of hand, some magic trick to guaranteeing .50 cents USA for a Belize Dollar, when the economic figures say it is only worth about .03 cents USA?
Don't you always wonder what the government is really saying, when they announce those complicated balance sheets and fiscal reports? Can you figure things out more simply? We know it is only human nature for politicians to lie and put the best face on things and bureaucrats are no stranger to this phenomena either. What really is the state of the economy of Belize?

One of the ways of guaranteeing an official exchange rate, is like one of those one armed bandit gambling machines. They work on percentages. They only permit a certain amount of people to get their money exchanged. In Belize, this is done by foreign exchange permits, bank commissions and a host of rationing and control regulations by Central Bank that control the flow of foreign exchange. Sort of like the machine that will only pay out a certain number of times when you gamble.

In reality, a dollar currency, in which the exchange rate is guaranteed usually also has what they call a dollar standard. A dollar standard in Argentina currency has to have as much USA dollars in foreign reserves, equal to the amount of Argentine currency in circulation. This is not the case in Belize. In Belize, the official exchange rate is done on FAITH, like your local religion. You have to believe in the exchange rate.

If the Belize dollar official exchange rate, done on religious FAITH, were backed by a dollar standard. What really would we have economically? We know the annual government revenue runs between $280 million to $380 million Belize currency. We also know that the Foreign National Debt is somewhere between $900 million and $1200 million Belize dollars. If you take an average of $330 annual revenue and an average of foreign debt of $1050 million and add them together, we get a figure of $1380 Belizean million currency. This should then be the amount of Belizean currency in circulation. We don't know actually how much money is printed in Belize and is in circulation. But that number of $1350 million Belizean sounds fairly accurate. We also know from a recent government press release of last week, that they only have $28 million USA in reserves.

At the official rate of exchange, the actual foreign reserves should be $675 USA millions. But we only have $28 million USA, so we are not using a DOLLAR STANDARD like Argentina. Even allowing for some juggling with the figures, it is still going to come out with more Belizean money being printed and in circulation than we have backed by a Dollar Standard with foreign reserves.

Normally, we would call this inflationary. That the Belize currency is severly inflated. The only real solidity in this economic picture, is that the Belizean public believe in the Government official rate and have religious FAITH in the PUP to make good on the inflated official rate. Unfortunately, foreign lenders to the government of Belize do not have the same FAITH. They insist on being paid in foreign exchange, not in Belizean currency.

What this tells us about the economy, is that the government needs to save more foreign exchange in the reserves. Belize needs another $647 USA millions in our foreign reserves.

Hence, when the Education Department is planning a 10 year program of investing, a minor trickle of money in new schools and classroom building per year at the rate of $8 million Belize dollars annually, we don't have the money ourselves. So they borrow it from the World Bank to the tune of $80 million Bz. Why would the World Bank lend money to Belize to build schools if the money is so inflated? Well, they are going to insist that the money be paid back with interest in FOREIGN EXCHANGE. They are not interested in your Belizean currency. To make sure inflation doesn't get any worse, they are putting all kinds of strings on the loans and spending. What the World Bank does and IMF does, is figure what the GROWTH RATE is for Belize. This is why Musa and Fonseca are trumpeting in international forums that Belize has a 6% GROWTH RATE and project a 10% GROWTH RATE. If you use the GROWTH RATE as an indicator, it means the total annual government revenues are going to increase each year for the foreseeable future by that same amount. So, there will theoretically be some money to meet the interest payments, if not the principal on the loans. Of course, the kicker in all this, is you keep your fingers crossed behind your back when you sign those loan agreements. You wish and pray for no hurricanes hitting Belize during the next ten years. You pray and wish for sugar prices to go up. You pray and wish for some new industry to come into Belize to provide revenue and diversificiation. Praying is a bit like working with those one armed bandit slot machines. It's a gamble!

One interesting rough calculation is that at the current average government annual revenue, just paying back the loan money now outstanding from tax revenues as they stand right now this date of late May, 2000; it will take around 24 years and more, to pay back what we currently owe as a people, the loans the government has taken in your name.

There is also the fact, that theoretically the U.K. Will write off some loans if they fit poverty program investing. Now that our famous Peer of the Realm has fled Belize for Turks and Caicos and English politics and citizenship, the U.K. Just might give some debt forgiveness this year for fighting poverty programs. I suppose the house building can be called poverty programs, since the Belizean middle class are a lot lower than those in the U.K., for services and gadgets and comforts of an industrialized temperate zoned climate country. Anyway, poverty is what they are selling in Belmopan. Of course the U.K., poverty write offs last year on the loans we owe, were cancelled by the U.K. Supposedly, because of our fancy bi-national local bigwig investor, playing in the politics in England. So again, a little praying and keep your fingers crossed.

It is not clear if Taiwan will write off any loans, but you never know? Something could happen! Theoretically, once the mortgage scheme goes into action in a year or so, the Taiwanese loans will get met by mortgage sales to Barbados, whoever buys the secondary mortgages. So, the PUP are probably on the right track here with some of the Taiwanese loan money. The catch if any, is going to be changing Belizean currency mortgage payments into U.S. Dollars. Without adequate foreign reserves that is a nitty gritty point. It is hoped increased tourism will bring in more US dollar exchange and maybe, just maybe ,somebody in the government will actually put the money in foreign reserves and not spend it on something else. We are after all fighting inflation here. Trying to make the real value of the Belizean dollar now around .03 cents USA, actually be worth the official rate of .50 USA cents.

You will know when we have arrived as a country of stability and economic strength in the world, when the foreign reserves are more than the actual Belizean currency in circulation. When the Belizean dollar is not only actually worth the .50 USA cents, but may actually be worth more than the US dollar. Like in the Bahama's, Cayman Islands and Switzerland as examples. Then Belize will have really arrived!

Posts that reak of politics, politicians and political infighting do not interest me as these are the things that have brought Belize to the point where we are now.

How about some refreshing ideas on how to correct the situation based on non-political
idealism.

While we as individuals don't have the wherewithal to implement such actions, I am aware that there are people who read these posts that do.

My suggestion for immediate assistance in reducing the shortage of Belize Dollars and perhaps help rejuvinate the economy.....

1) Allow the banks of Belize to open USD
Dollar accounts. As in other foreign countries, non-nationals should be required to submit two letters attesting to their credibility. One being from a bank where the person has at least a 2 year banking history and the other could be a police background check such as is required for residency.

There are lots of people in the world looking for places to put money other than crooks. Safety / Retrivability / Annonimity / Interest are all concerns for these people.

2) USD Accounts should pay interest at a rate equal to the rates for savings in the country issuing the currency plus an 1% (+/_ depending on current need) incentive. AND, "no add-on taxes" as we have seen previously.

You might be surprised how fast a 1% over market interest rate will entice dollars to start flowing into Belize banks AND prevent the flow of dollars earned from leaving the country.

3) Allow the BZD:USD exchange rate to "float" depending on demand.

Do we really need the "Artificial Peg" of 2:1 ??? As we have seen this only entices the black market to siphon dollars out of the country by paying a little higher rate and prevents the Central Bank from having maneuvering room to adjust to current fiscal situations.

The Tourism sector would also be benefit.

4) Do away with USD exchange / withdrawal restriction for persons who have USD accounts in Belize, up to the amount in their account.

5) Promote a "Buy Belize" program and induce outside business to move some of their manufacturing facilities to Belize.

You can be sure that serious big businees
would not even consider moving operations to Belize if the have currency considerations.

6) Casa De Cambio... Who needs it ???.

[This message has been edited by bobby grimes (edited 01-31-2002).]

[This message has been edited by bobby grimes (edited 01-31-2002).]

SORRY...ITEM 1) Above should read USD instead of BZ.

Divein. I am glad you were able to find the information as to where the .03US$ to the Belize dollar came from. Remember, I only offered this because there seemed to be some confusion as to it's origin. And, I hope all who are following this will form their own opinion based on the logic behind the theories. Lan chose to discredit this paticular view based on the person who offered his views as opposed to the merit of the views. I am not indorsing those views. I am only presenting them to further this dialog. I think this is important enough for the future of Belize that those of us who care about Belize are willing to listen and learn from all views and form our opinions based on the value of the opinions and not the personality of those offering their opinions. If my views were judged on my personality, Marty would be editing out all of this. LOL

[This message has been edited by bywarren (edited 01-31-2002).]

bywarren

Sorry if I offended you..there was no intent.

Admittedly I first stated that the0.03 came from th IMF Brief.....I made a mistake.

You gave me the opportunity to correct the mistake by posting the correct reference.

Thanks

Bobby: Here is my take on your comments. You say:
"Posts that reak of politics, politicians and political infighting do not interest me as these are the things that have brought Belize to the point where we are now.
How about some refreshing ideas on how to correct the situation based on non-political
idealism."
If you are talking about posters who attempt to persuade us that the problem is primarily caused by one of the two tweedle-dum and tweedle-dee parties in Belize and that if dee is only replaced by dum, everything will be OK, then I wholeheartedly agree with you.

But if you mean to say that these issues should be discussed without mentioning POLITICS, then I have to disagree.

All of your solutions (most of which I agree with) involve POLITICS because they would require the government of Belize to change its POLICIES, its LAWS, or both. Hence, they require POLITICAL change, meaning a change in which the people who run the government behave.

More fundamentally, the policies you propose will not come about until the Belizean people decide to insist on the kind of POLITICAL change that will create true representative democracy rather than arbitrary decision making by a small cabal, unratified by the electorate or even by the electorate's purported representatives.
The policies you want will only be enacted by representatives who are following the wishes of their constituents, rather than the wishes of the privileged few who are lining their pockets. This will require great political change.
Lack of representative democracy and the resulting lack of accountability are at the root of these problems. These are "political" matters because they are the product of the manner in which those empowered to make economic decisions do so. There is no "non-political" solution to what is essentially a political problem.

For those of you who are interested in this topic, be sure to read the discussions on the Fountain Blue. It is just one other good example of why the Belize dollar is in trouble and in some peoples view, including this ones, doomed. No countries curency can exist in the open market when it is run like Belize. The real questions is, How Long Can the Country exist when it is run like Belize? It is time for Belizeans to wake up and smell the droppings. And please remember, I only make these comments out of my affection for Belize and it's people. Rather, some of it's people.