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#459268 - 03/02/13 01:47 PM Budget Boasts of Great Growth, No New Taxes
Marty Offline

Heaps Bombast On Opposition

Today was Budget Day in Belmopan - and it was also the first post Superbond Budget. You might think that would lend itself to an air of celebration, or lightness, but in the budget titled "Achieving debt sustainability, Stimulating economic expansion" it was all business, with more than a little self-congratulation. Jules Vasquez was in Belmopan for his 19th Budget Presentation - and he has this report"..

Hon. Dean Barrow, Prime Minister
"This Budget will see absolutely no new taxes and no overall spending cuts."

Jules Vasquez reporting
And that's because of unmatched economic growth:

Hon. Dean Barrow, Prime Minister
"Our economy grew by 5.3% during 2012, well above the 1.9% recorded for 2011 and just about the best in the Anglophone Caribbean."

The projection for next year is that growth will continue at a more modest pace of 3% - but the growth in revenue from taxes will benefit public officers:

Hon. Dean Barrow, Prime Minister
"I say again with great pride that we do not propose to increase any taxes in this new budget. Instead, we sound the tocsin of improved administration and efficiency of collection. And we believe that Public Officers will answer the call. For they, and we, know that, in the face of declining petroleum revenues and grants, it on this that the salary increases depend; it is this that must carry the day."

"Even as we reject austerity we do not embrace profligacy. We therefore walk the fine line of, on the one hand, responding to the pressing social and citizen security needs at home; responding to any reasonable and affordable wage concerns of our public officers and teachers; responding to the need for investment in new physical infrastructure."

And while the public officers will benefit from that surplus- the rural poor will benefit from an expansion in the food pantry program:

Hon. Dean Barrow, Prime Minister
"We will expand our support to the indigent and the working poor through the Food Pantry Program, giving this basic nutritional and survival assistance to more citizens, including now in some rural areas."

And in a budget that was restrained in its optimism, this was the only other palliative that stood out:

Hon. Dean Barrow, Prime Minister
"And there is a sixty million dollar infrastructure package to be financed and implemented via the newly registered, wholly GOB-owned, private company called Belize Infrastructure Limited. This is the special-purpose vehicle that will create jobs, stimulate demand, purchase private sector material and supplies, and generally raise that tide that will float all Belizean boats."

And that major public sector funded spending is what you might call an outgrowth of the Barrow Economic Doctrine, which the Prime Minister laid bare today:

Hon. Dean Barrow, Prime Minister
"We have been forthright in embracing and promoting-indeed proselytizing-the role of the state in driving economic development; in stimulating demand; in stepping into the breach always, but especially when there is any slackening of private sector activity. It has been our practical and philosophical conviction that big government is a necessity for small countries. We will therefore continue to ramp up the public sector investment programme."

But public spending will be tightly reigned in:

Hon. Dean Barrow, Prime Minister
"Fiscal discipline must continue, and expenditure restraint-though not wholesale contraction- must remain at the front of our agenda as we manage our public finances into the medium term."

And that somber tone hung over the proceedings as PM Barrow made the case to creditors that his government, just back form renegotiating was contrite and conservative. And the Superbond played a large part in today's budget presentation: it received six mentions in three different parts of a speech that had no shortage of self-congratulation for taming the debt monster:

Hon. Dean Barrow, Prime Minister
"The superbond-that bane of our existence, that monster of our nightmare- has been tackled and tamed. Not vanquished, mind you, but put on a leash and confined to its lair."

"According to the international sovereign restructuring playbook, nobody gets debt relief even as they are growing their economy by over 5%. Nobody gets debt relief while attracting signature foreign direct investments such as the ASR $100m in the sugar industry. And nobody gets debt relief while steadfastly refusing to surrender fiscal and monetary sovereignty to any IMF Program."

"So let the haters choke on their bile. This singular triumph of the UDP shall forever stand in contrast to the kleptocracy of their record."

And Prime Minister Barrow kept to that very harsh partisan line, throughout a speech that was replete - unusually so - with references to the other side:

Hon. Dean Barrow, Prime Minister
"Of course, while we can now feel very good about Belize, it is not all rose coloured lenses or sunlit vistas. For one thing, there is still a superbond hangover. We have taken our alka seltzer and tomato juice. But though the "goma" has lessened it will never completely disappear."

"Those that have condemned us to this perpetual migraine say they are tired of hearing about it, but I endorse the words of the Minister of Housing: you will hear about it till you are dead because we have to continue paying it till we are all dead."

"In reflecting on their vermin-like behaviour, I am reminded of what Mirabeau said of Talleyrand in the days before the French Revolution, and I paraphrase: he would sell his soul for money, and he would be right, for he would be receiving gold in exchange for excrement. That, Mr Speaker, could well be the epitaph of those on the other side."

And in a speech that was heavier on bombast from the past than it was on moral lift for the future - Barrow ended by - as best he could, mustering a positive outlook:

Hon. Dean Barrow, Prime Minister
"The superbond has had its claws drawn. The asphyxia of austerity has been rejected. There is unprecedented economic growth. There is tangible increase in social protection. There is abundant liquidity in the banking system for private sector access to credit. There is security for our currency backstopped by impregnable reserves."

The budget speech lasted an hour and fifteen minutes -slightly shorter than Mr. Barrow's Presentations customarily are. It will be debated on the 21st. and 22nd of March.

Channel 7


Leader Of The Opposition Not Impressed Or Inspired

The Leader of the Opposition will lead off that debate - and today after the House Meeting we asked him for his initial impression. Not surprisingly, he wasn't impressed or inspired:..

Hon. Francis Fonseca
"To borrow your word I think it's a superficial budget. I think it did not excite my senses at all. It was very difficult to see through it but I want to give the process the benefit of the doubt. I want to be able to go back and look at the budget, look at all these figures - that's what we will do as a party now and of course we will hold consultations as we did last year with the private sector, with the unions, church communities, university students so that we can share with them what is in the budget."

It is customary media practice to interview Leaders of the Opposition after the Budget Presentation for an initial response; Fonseca's was the shortest we've ever done.

Channel 7


Elrington Lashes Courtenay In House

As we told you at the top of the newscast, it was Budget Day in Belmopan. And while the Budget was the biggest news of the day, the hottest news came on the adjournment when opposition members spoke on matters of national interest. Representative for Orange Walk Central John Briceno raised an issue that his bosum companion Eamon Courtenay raised in a letter to the Amandala two weeks ago -in which Courtenay questioned the competence of current foreign minister Wilfred Elrington. Briceno got a fiery reply from Elrington, only thing is Elrington was answering to Courtenay - who was also a formers foreign minister. Here's how it started:

Hon. John Briceno
"Isn't it in the best interest of Belize now that negotiations are over that the Foreign Minister brings to this Honorable house a amendment to the Maritime Areas Act to claim the full amount of our territorial sea Mr. Speaker."

Hon. Wilfred Elrington
"When we go to the maritime borders we will have to agree particularly down south with Belize, Honduras and Guatemala. But the basic international position is that it is going to be the equi-distant point between the three countries. That is the basic position, but it does not yet been established definitively in international law. I don't like to enter gutter politics but I know where the skeletons are buried, I know because I have live long and I've been very careful and I note and store things down. I don't want to be provoked. I don't want to enter into unnecessary discussion and debate and certainly I don't expect to be guided in my job by a person whom the leadership of the other side to which he has always belong. Found him to be unworthy to represent the nation and in such a serious manner as demonstrated by withdrawing his credentials and recalling him even while he was in the midst of an international meeting. That kind of person can't guide and inform me, don't have anything to say to me that I am prepared to listen to."

We should note that while the rancor between Elrington and Courtenay is playing out at the political level, the two also have a legal battle ongoing in court.

And the other heated moment came when Toledo West Representative Mike Espat was speaking on a matter of public interest - but the Government side was trying to shut him down because the matter had already been raised by one of his colleagues. That led to some hard talk from the speaker:..

Hon. Mike Espat
"I am talking about people who paid and can't get their surveys. I am not blaming the Minister."

Hon. Patrick Faber
"You sit down; I have a point of order."

Hon. Mike Espat
"What's your point?"

Hon. Patrick Faber
"Sit down and I will proceed."

Speaker of the House
"I want both of you to sit down. How about that. Sit down."

Channel 7


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#459277 - 03/02/13 02:14 PM Re: Budget Boasts of Great Growth, No New Taxes [Re: Marty]
Marty Offline

Foreign direct investments and tourism up

In the banking and financial sectors, Prime Minister Barrow also reported that there is excess liquidity in commercial bank holdings due, in large part, to foreign direct investments, as well as tourism.  The surplus, he said, serves to limit the interest rates currently applied to loans.  

Prime Minister Dean Barrow

“Reflective of the strong economic performance, the broad money supply expanded by eleven percent led by higher foreign inflows and supplemented by growth in credit to the private sector, which occurred even after taking into account thirty-seven point three million dollars in loan write-offs during the year. Most of the credit went towards personal financing and the building and construction sub-sector. The build-up in net foreign assets was largely attributable to elevated inflows from foreign direct investment and tourism even as the external current account deficit widened. The accumulation of foreign assets and credit growth contributed to the continued rise in cash and statutory bank liquidity. At the end of the year, commercial bank holdings of cash and statutory liquid balances were respectively eighty-one point seven percent and sixty-one point three above required levels.

The high level of liquidity facilitated a hundred and three basis points fall in the weighted average lending rate to eleven point nine-nine percent as all loan categories recorded rate cuts, the most notable being one hundred and thirty-nine basis points for residential construction and one hundred and twenty-nine basis points for personal loans. The weighted average deposit rate also fell to two point five-five percent (the lowest level since 1977) chiefly due to a one hundred and forty-two basis points fall in the time deposit rate. As a result, the weighted average spread increased by seven basis points to nine point four-four. I should at this juncture, Mr. Speaker, note that since December 2008, the weighted average lending rate has fallen by two hundred and eleven basis points and, the weighted average deposit rate went down by three hundred and eighty basis points. Accordingly, the weighted average interest rate spread increased by one hundred and sixty-nine basis points during the period.

Mr. Speaker, credit unions continue to play a leading role in Belize’s development. Lending by the five largest credit unions rose by thirty-six point two million dollars to four hundred and three million dollars during 2012, and this was almost twice the twenty point eight million dollars recorded for 2011. The loans extended for agriculture, individuals, real estate and residential construction overshadowed the repayments for home improvement and manufacturing. The quality of the credit union sector’s loan portfolio continues to improve, and as of December 2012, the NPLs ratio fell well below the five percent threshold to three point five percent.”

Channel 5


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