Prime Minister Dean Barrow’s quarterly press conference was held this morning. The topics varied from hot button issues and the economy, which is where we’ll start tonight. It is no secret that countries around the world are grappling with the economic recession ... and Belize is no different. Inflation is up, tourist arrivals are down 3.6% as of November, and the dramatic drop in fuel prices has severely cut into government’s revenue. There is some minor reprieve in an estimated overall G.D.P. growth of 2.8% for 2008 and the Prime Minister says that despite the alarm raised by an EIU report, the government’s reserves are holding steady.
Prime Minister Dean Barrow
“There was a much circulated E.I.U. report a couple of months ago that contained some alarming, but it turns out utterly wrongheaded, statistics. The increase in official reserves to 3 months worth of imports is holding steady, there will be a primary balance of 4.9% for the fiscal year 2008-2009 compared to 3.8% for fiscal year 2007-2008 and the overall fiscal deficit, the E.I.U. notwithstanding, is projected to be 0.7% of G.D.P., almost identical to that of the previous fiscal year.”
To tackle the deficit, Barrow says he is in negotiations with Taiwan for a concessionary loan. He also revealed that he may make a state visit to that country later this year.
Governments all over have devised ways to kick-start their economies and today the Prime Minister followed suit with his own stimulus plan which will go primarily for infrastructure development. Funding for the approximately $200 million package will come, not from the commercial banks, but rather in the form of loans from international financial institutions. Today Barrow revealed the details of that plan.
Prime Minister Dean Barrow
“There is the $60 million principally from the I.D.B., CABEI and OFID for the tourism project and solid waste management project. The loans from the I.D.B. and from the other sources are already approved, so that is in no sense a case of wishful thinking. So there's that $60 million, there is the $20 million from the C.B.D. for the D.F.C. and perhaps I should say here that I am trying to see how we can capitalize the new revised D.F.C. to the tune of more than the $20 million that the C.D.B. is lending us. It might have to be a little domestic borrowing, we’d have to persuade Social Security to invest in the D.F.C. But C.D.B. is giving us $20 million and in addition there is another $10 million from C.D.B. for the Belama drainage project and the improvement of the Northern Highway between the outskirts of Belize City and the Haulover Bridge; in fact, the transformation of that stretch of the Northern Highway into a 4-lane highway. There is another $10 million from the I.D.B. for infrastructure rehab on the Western Highway.”
“I mentioned the World Bank and its renewed lending to Belize this year of $30 million for urban renewal in the district towns. That money does not include Belize City or San Pedro, although they are trying to do a separate project for San Mateo in San Pedro. And it doesn’t include Belmopan, but again, where Belmopan is concerned on the committee to turn RECONDEV over to Belmopan, that should give them some increased revenue and they should be able to take care of business with that. But it will be about $5 million each for San Ignacio, Santa Elena, Punta Gorda, Dangriga, Orange Walk, Corozal, Benque Viejo. Under the continuing E.U. assistance, there is $20 million in grant funding for road infrastructure particularly in the north. We have applied for $20 million from the CARICOM petroleum fund for again, flood relief purposes, and the I.M.F. when they were here, wonder of all wonders, said we could get US$10 million without conditionalities for balance of payment support, again, as a consequence of the flood events. Completing the borrowing envelope, there is at least another $10 million coming among C.D.I., the Commonwealth Debt Initiative, the Social Investment Fund and the B.N.T.U. So, as I said, we are looking at around $200 million. That then is our version of the Stimulus Package that of course so very many countries in this world are resorting to. This will increase employment, pump money into the economy and create the rising tide designed to float all boats even in a time of recession.”
Belize City will also get its own $5 million urban rejuvenation project. The monies will come from the Petrocaribe Fund and abandoned deposits at the Central Bank. According to Barrow, that money will enable the resealing and rehabilitation of 19 miles of streets in the old capital, as well as beautification works.