REPORT #103 Sept 1999

Produced by the Belize Development Trust


There was an insert of 12 pages, a special supplement in the Miami Herald newspaper of Florida, all on Belize. Since it was in small print, the volume of information was probably double what is in the ususal REPORTER newspaper from the port town of Belize City, the old colonial capital.

It is a very nice review, upbeat and a real sales pitch. Government propoganda to be sure, but well done! Different economic sectors and government departments are covered, along with interviews by people running them as heads. One sort of hates to take a critique to such a thing; but since we are mainly interested in promoting dialogue and debate on the local Belizean scene, we shall do so. This foreign insert has otherwise done it's job and reached an audience of a million or so. Though I nearly threw it in the garbage, not realizing it was in the morning paper. After reading through the paper, I sort of was stumped for something to read with breakfast and kind of went through the usual throwaways, like the advertising inserts and only accidently stumbled across it. How many people actually read it, is a statistic that is hard to tell.

The covering page has rather handsome flattering pictures of our Prime Minister Said Musa and the Minister of Budget Planning and Management Ralph H. Fonseca. They seem to be wearing the same sort of shirt. Wonder if that is the new "uniform" in Belmopan? It used to be the Guayabera in George Price's day.

The article says that the public health system is weak. The agriculture sector is using out-dated equipment and there is no mention at all of any efforts to form citrus producers co- operatives, to enable small producers to achieve the cost efficiencies of size. The Prime Minister is quoted as saying his greatest challenge was restoring confidence in the economy when his party took power a year ago. I would agree with other observers that this aspect of his administration has been successful. The PM claims a surplus for the first year in office. Of U.S.A. $1.4 million. Revenues doubled and they managed to keep a tight lid on spending. At the beginning of the year, it certainly looked like it was going to be more of the same foreign loan borrowing and indeed the PUP party did arrange around a $140 million in foreign loans. But it is my understanding ( correct or not ) that they have not really utilized it yet. It is sort of an overdraft draw they can tap into if they want to. Whatever they are doing, the results are commendable. GDP growth is around 1.4% in the past year. I'm not sure how they calculate that and we don't get much government statistics and financial information via THE REPORTER newspaper, the main paper covering the economy and business in the nation of Belize.

There is talk in the article, of reforms in parliament and judiciary fields. This latter has had one result with the Village Councils ACT that is positive and two results that were negative to democracy and growth. The Town Act and the aborted Referendum ACT. The PUP record is not impressive for reform in parliament and observers beside myself look upon this propoganda as so much "Irish blarney" and political rhetoric meant to appease the masses. In other words, we are cynical and feel the PUP are lying through their teeth about real political restructuring. But we will wait one more year and see. Nothing done by then, political fighting should get hot and interesting.

Fonseca, Minister of Budget and Management says they got the fundamentals right in their first year. The clamp down on spending is certainly a rightful move and give him credit for that. The double revenues are a windfall and they do need to make what they can with that, while they can. He says, they are using a "rule of thumb" type guage of keeping the deficit at under 3% of GDP. Since I do not understand their GDP figures, I'm not sure what he is talking about in comparison to the national foreign loan debt. Whatever, it is working and I am happy to see that!

The goal Fonseca says, is to get our people working and living a dignified life. To do that, they are going to have to move to District autonomy and equal district financial sharing. Something they have not done yet. Otherwise, the improvements are simply a temporary accidental blip, or jagged sine wave in a longer term economic forecast, which is dismal in the longer term outlook, under the current hieracheal pyramid system of governing using a five year party swap ownership of the treasury plan.

Prime Minister Musa talks about the need to strengthen the Belize Dollar. He does not outline how they plan to do that though? The Educational system is the PM's main infra-structure target. In that, I think things are coming along very well. It is claimed that 30% of this past year's national budget was spent on education. Half of the nation's children DO NOT complete primary school. Those that do, particularly in the rural villages that are ISOLATED FROM the leader/rulers in the hierarchy in Belmopan the capital and the main port, the latter site a location of political concentrated power and bureaucratic civil service jobs privilege. The article states that only 34% of children attend a High School. This means two thirds of the children in the whole nation of six districts never see a high school. That is very much shameful. Even more so, when you guage the disparity between the opportunities for the port town children versus the obstacles facing remote rural village children in the other districts. There is a crisis in buildings, classroom and teacher/administrators around the districts. Education Minister Cordel Hyde speaks of all kinds of problems; but one notes his complaints as quoted; are mainly only orientated to the one port town, the capital of the Belize District from which he comes. The national population is 25% functionally illiterate, he says. Two Cuban experts in illiteracy have been imported. There is no mention of the Regional District Library project as part of a national attack on illiteracy for the other districts, as a tool to bring technology, reading, "How To build" magazines and internet computer access to information, to all Belizean citizens from all rural areas in all districts. How that project is coming we have not heard recently. But it is complimentary to business and education and a cheaper way of empowering rural village education, in the short term. Public libraries are part of education and economic growth. Minister Hyde did say the government wants increased reading and use of computers. He was short on specifics though. The Minister did complain about the overproduction of MBA's at the University level. The University Junior College system and High Schools has to find a way to cover more subject diversity, in order to serve the nation's needs. He accurately portrays the biggest resources of the nation as being the human resources and finding the educational subjects to empower the human resources in varying degrees in different district climates is a major challenge.

Belize has the highest GDP in Central America at USA $2000. The next general elections are in 2003. Central Bank Governor Keith Arnold says his focus is on the Trust business and shipping. While he says they have lots of regulations ( God forbid that as a policy!), the financial sector is very narrow. He does not see Belize competing with more successful tax havens. He is right about that, but does not diplomatically ( politically correct bureaucratise lingo ) state the reasons. My own observations say it is because of foreign exchange fees, lack of a free wheeling dual Belize dollar and USA dollar accounts without the requirements of foreign exchange permits and because the Income Tax frightens away any foreign deposit money. These of course are outside the purvue of the Central Bank. Change those, and you change the whole development of Belize ballgame. He brags about a 1996 Offshore Money Laundering Act. Probably to appease the USA and the U.K.; but is generally just so much hot air and paper balloons in any pragmatic sense. The Central Bank wants a flagship bank for the country. I wonder what he calls "Barclays Bank"? Am I misunderstanding him here? There is no patriotic inspiration offered, in the form of encouraging legislation to allow small Belizean privately owned rural district banks to be formed, to compete with foreign banks now dominating the local district areas under the umbrella deposit requirements of the port town branches. His misguided orientation is strictly to foreigners. How Belize can build an international banking system with such a foreign narrow outlook is beyond me. The national development priorities and interests are not being served here. He complains of illiquidity in the system and I have to agree with him. It is a political legislative problem not a Central Bank problem.

There is a section on a Trade and Investment Promotion Service. Which basically reads like employment patronage jobs for favorites of political parties in power. Dr. Louis J. Zabaneh the Executive Chairman of the Trade and Investment Promotion Service claim $29 million in results from domestic and international entities in expanding their operations. How true that is and how they arrive at those figures would be interesting reading.

In the electrical field there is talk of BEL being sold off. It states in the article for Hon. Maxwell Samuels, Minister of Public Untilities, Transport and Communications; that independent generating companies are being encouraged to contribute additional input to the national grid. I was not under that impression at all and would like clarifications and examples, if any? Perhaps THE REPORTER could do an exploratory article on this announcement? What price pray tell, are BEL paying for electricity from independent generating companies? Keeping in mind that San Pedro are claiming they pay .18 cents USA per Kilowatt to BEL for Mexican produced electricity. An aircooled Lister diesel generator for a small house or business in the 3 kw to 8 kw range will allow an owner to produce electricity at 4 to 6 cents US per kilowatt. Admittedly at extra personal labor and some nuisance.

He states that no rural village will be without electricity in four more years. While the good minister states unloading port machinery is not too good, he is evasive in his statements about contracting out to private companies for such services in ports and unloading and loading. While he reiterates that the government is determined to reduce the cost of operations and will open the door to private investment, it reads more like rhetoric for public mass consumption than any real change in political climate. Nor would such a thing work under the current Constitution; because it caters to GREED and SELF ENRICHMENT of bureaucrats and politicians in the form of favoritism, bribes and that sort of thing. Most knowledgeable investors both local and foreign would be well aware their contract would only be valid for one administration. Hence no real improvement is possible. The solution to investment in sea ports and airports by private investment is a change in the political constitution. Without this, any meaningful long term large investments are but a dream, a castle of clouds in the sky. BTL the telephone company is oft quoted as an investment example and MCI has a stake in it as the example. This does not mention the fact that the investment deal here is a monopoly with no social conscience to develop rural Belizean villages with land lines and telephones, leaving much of the country after decades still without telephone services. Nor does it mention the monopoly setup, aided and abetted by fellow investor, the GOB, whereas they rake off around a guaranteed 18% dividend for investors. Under those kind of robber baron, tactics where an investment is protect by law, has sovereign status, but no obligations to develop the nation; only cream off the icing off the cake from proven profitable areas; such an investment may be good for foreign money, but certainly does not develop the potentials around the nation. It is a policy guaranteed to keep Belize in the poor third world.

Mr. Folgarait, Chief Executive Officer of the Belize Water and Sewage Authority and Ray Lightburn, political patronage reward, Executive Chairman are quoted in the article as saying that their mandate to maintain and operate the water distribution and sewage system ( mostly only one town in the country ) was impeded by bureaucratic inertia before they took office a year ago. I wonder what that means and how they plan to change the cost functions of this service? It was left out of the article. Can they do anything under the system?

BTL states their monopoly will be over in 2002. It will be interesting to see the legislature of that day, meet the challenges of competitors wanting to share BTL's land lines and other services in competition at a fair price. How the government politicians will meet that one, is yet to be seen. There is more than one way to make a monoply as somebody else pointed out on the Belize Culture List. Wary cynicism is the rule.

Dr. Henry Canton is Minister of Works, traditionally the biggest salaried job in the cabinet. The work on roads is going to be never ending for the next 50 years, even if you had all the money you needed. He says, they have 28 bridges in blueprints that need building, but no money for them? Guess we need a grant factory at the Ministry of Works to get grants for bridges from Brunei, Kuwait, Dubai, Quatar and elsewhere? Hire six people to write and submit GRANTS Mr. Minister, a full time job. One grant will pay for them all. The port Belize City, only one town again in the nation is going to get another $140 million to improve their sewer system. A bottomless sink pit for sure. $30 million is budgeted for the other 5 district town drainages. Currently $240 million worth of road construction is underway and another $112 million is in the pipeline. It makes you wonder why UCB is overproducing MBA's and Accountants? Why not civil engineers and practical people who can fix, build and run machinery to make roads? That is where the business opportunities are! The minister says he needs a way to finance a system of maintaining roads, particularly during our two rainy seasons. He claims that the Ministry of Works will be hiring in Stann Creek and Toledo District the local indigineous people to clean road shoulders and drains. Give me a break Mr. Minister! That is such an oligarchy outdated attitude, it wants relegating to the last century. That is insulting and so out of touch with reality. Use prisoners in chain gangs to do that on their good behavior. Indigeneous people are as smart as anybody in the Cabinet. Get in touch with your counterparts in Telecommunications, Education and such; and get some libraries with internet computers, electricity, tools, roads and telephones and you will see a boom in business in those indigeneous areas that will make the Belize City port crowd look trivial. You guys in Cabinet don't supply the infra-structure tools, no development can happen. You supply it and you watch those campesinos build a better richer lifestyle than most of that politico crowd in the port town can accomplish living off the salaried public treasury.

Ms Menzies is quoted on foreign investments in ports, canneries, port cranes, freezers and such; as saying that government is not forseeing in the near future any privatization tenders for such things. They have not even got mentally prepared for private enterprise doing things as outsourcing on contracts in the government yet. Nor have they even learned how to do such things at the government level yet, or words to that effect. Seems like workshops and seminars and stuff are needed in Belmopan bureaucratic and political circles. Also district government circles if they ever get district governments? Political Parties are the biggest enemy of Belize, because they do not want to dilute their hieracheal power to rank and file elected representatives in District governments through Constitutional Reform.

Shrimp farms are doing explosive growth in Belize. Soon to reach USA $100 million in sales. Lobster is still doing well. Daniel Silva, Minister of Agricuture, Fisheries and Cooperatives says a lot of niche marketing is opening up in the private sector. They are even finding markets in Honduras and Guatemala and Mexico for agricultural products. He says, we only need a 10 million people market niche out of the 150 million people living in the three bordering countries and we can sell all we can produce. The minister says in the article that even Belize needs to improve it's import substitution agricultural needs. The problems apparently are still price controls, permits, bureaucrats, transportation, storage and processing. Not counting the lack of co-operative field officers to build co- operatives among the new immigrant campesinos putting in farms along the newer roads.

Hon. John Briceno, the Deputy Prime Minister has a nice photo. He covers the usual stuff on ecology, synergy, and all the latest jargon lingo. I see, he is still dreaming of exporting wood manufactured products. Maybe next door to Mexico and Guatemala but hardly to North America and Europe. If he wants a lesson in that, take $12,000 of your own money and make some stuff and send it off to buyers in foreign parts. You will quickly learn it cannot be shipped for various and sundry reasons and get there in saleable economically priced competition. Count that one out! That is a tired old dream, or song, coming out of decades of Belmopan tax paid salaried dreamers. Humberto Paredes says indigenous communities are managing and protecting areas adjoining their traditional living space. It is a prime focus for management of eco-tourism.

Tourism Minister Mark Espat, says we don't need more rooms, we need to fill the ones we have. They are empty too long. He hints that government is going to spend money on the port Belize City crowd of business people for the cruise ship stuff. Coming from Caye Caulker, I cannot understand why the port city business people can't go to the bank and borrow the money themselves, just like islanders on Caye Caulker and San Pedro do? That whole government financed cruise ship thing, stinks of a taxpayer ripoff, by the port city intelligentsia business crowd. A very unfair advantage against tourist operators around the nation. The Minister expects the Stann Creek and Toledo District to come into their own tourism very soon.

The average hotel has only eleven rooms in Belize and most of them do not know how to sell to the tour operator wholesaler in Europe and North America. They have conflicting prices for transients and foreign bookings. Nor is the quality that high, though I would dispute that in many cases. Seminars in marketing to wholesale tourist operators in foreign parts should be held around Belize the nation.

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