REPORT #379 September 2000

Produced by the Belize Development Trust

Sunday, Aug. 27, 2000 -- Amandala Belize
(This from our very own Mary T)
Discusses Bowen's Placencia shrimp farms
22 August, 2000
Russell Vellos, Editor
Amandala Press

Dear Editor:
Mr. Bowen's assertion to the contrary, no one in Placencia is trying to stop a "few hundred" acres of shrimp farms.

However, what we do need to stop are decisions based on inaccurate and inadequate information -- especially decisions that will affect the lives and livelihoods of almost everyone on the Placcncia Peninsula.

Most Belizeans know Placencia as a special place, with beautiful sandy beaches, great fishing, and outstanding diving and snorkeling.

Many Belizeans also have friends and family members in Placencia who have worked hard and now earn a good living as fishing and diving guides, tour operators, and restaurant and hotel owners.

To a great extent, the health of Placencia's beaches, fisheries, reef and economy depend on the health of the Placencia Lagoon, which nurtures much of the area's lobster, many, many species of fish possibly the world's second-largest number of endangered West Indies Antillean manatee, and significant numbers of endangered saltwater crocodiles. Plus, local residents still depend on the Lagoon for fish to feed their families.

Currently, five shrimp farms, hatcheries and processing plants occupy approximately 5,000 acres of pine savanna bordering the Lagoon. (Hardly the "few hundred" acres referenced by Mr. Bowen in last week's letter). Two new farms and two expansions have applied for operational permits.

The shrimp farming industry has acquired the reputation of "rape and run" for its practice of "raping" formerly pristine coastal environments, and then "running" to another location to stat the process all over again. The "rape" occurs when shrimp farms discharge into local waters substances such as ammonia, nitrites, nitrates, chlorine, antibiotics and pesticides which may be fatal to fish and contaminate drinking water supplies. (Some shrimp farm experts' estimate that every $1 USD earned by a shrimp farm causes $4.20 USD in damages to the communities in which the shrimp firm is located.)

Sediment from shrimp farm ponds can also negatively affect coral reefs and mangroves (especially the role of mangroves as nursery beds for fish species). Experiences in other areas such as Sinaloa, Mexico have demonstrated that the operation of a shrimp farm can seriously damage mangroves even if mangroves are not cut during the initial construction of a shrimp firm.

Any single firm alone might not do much to harm Placencia. And to be fair, many shrimp farm operators now understand that they simply cannot continue to rape and run - there just aren't that many places left in the world to rim to.

However, the cumulative impact of multiple farms, even those that are responsibly run, may pose a serious threat to the continued well being of the Placencia Peninsula. In fact, the International Finance Corporation, a potential source of loans to finance several of the shrimp farm expansions, including Mr. Bowen's, has specifically recognized the threat to the Lagoon, and states that:

"The potential risks that such a rapid development [of shrimp farms] may have on other land uses (especially tourism and fisheries), the environment and the industry itself (through disease risk and Water quality problems) are widely recognized (public, NGO, government and the industry). Further, the cumulative impacts of several aquaculture operations operating in close proximity to the ecologically sensitive Placencia Lagoon/Monkey River ecosystems has not been comprehensively addressed"

A study completed in 1997 by the United Nations Development Program for the Belize Coastal Zone Management Agency titled "A Review of the Environmental Impact of Aquaculture in Belize and Guidelines for Sustainable Development" also explicitly states that shrimp firm development in this area was already reaching the limits of sustainability in 1997. (The authors of this report are not environmentalists, but aquaculture experts who believe that a properly managed aquaculture industry can benefit Belize.)

Therefore, what needs to occur is a rigorous, independent baseline study of the Lagoon to determine the cumulative impact of all proposed new and expanded shrimp firms, hatcheries and processing plants, as well as other pressures facing the Lagoon such as tourist attractions and hotels, sanitary wastes, agricultural run-off and, residential and commercial developments. Only then will Belize decision makers have the information needed for rational judgments about the Lagoon that will benefit and preserve, rather than destroy, the very things that make Placencia such a unique place to visit, work, live and raise a family.

Friends of Placencia Lagoon (FPL) is a new community group formed to raise money for this study and to work toward the responsible and sustainable development of the Placencia Lagoon. Fm sure they would be overjoyed to learn that Mr. Bowen and other area shrimp farm operators want to work with them in achieving these objectives FPL can be reached by email at:

[email protected]

Sincerely, Mary V. Toy

But critics argue that it is based on flawed statistics. International debt is calculated at $650 million, but last count showed over $1400 million in foreign national debt.

The government in the meantime is keeping the foreign national debt a BIG SECRET.


THE REPORTER Sunday, August 27, 2000
S & P gives Belize economy BB rating

An assessment of the Belize economy by Standard & Poor, one of the highly regarded US assessment experts of economic trends, has assigned its double HI single B foreign sovereign currency credit rating to the government of Belize.

Standard & Poor noted that Belize has a stable outlook reflecting Standard & Poor's expectation that the government will significantly scale back its capital spending or find other revenue sources to fund its programmes as privatization programmes wind down over the next two years. "Fiscal consolidation should facilitate lower lending rates and higher financial intervention which in turn would support sustainable private sector driven economic growth," the report said.

"If the borrowing requirement is allowed to rise, external pressures likely will mount, resulting in a weaker credit standing."

It added: "Supporting the expected fiscal consolidation efforts are strong growth prospects in nontraditional agriculture, shrimp farming, tourism and other services.

"Better regulation in the utilities sector, an end tote private monopoly of telephony and continued trade liberalization should also improve the competitive environment," the assessment said.

The ratings, which are better than most observers expected, are constrained by ongoing fiscal imbalances and little opportunity for local current financing which restricts monetary flexibility and strains external liquidity, the S & P said.

It goes on to report that 'non-financial public sector deficits exceeded 4 percent on average over the last seven years. In fiscal 1999 and 2000 (years beginning April 1) privatization revenues reduced the borrowing requirement to 2.6 percent and 1.3 percent GDP respectively. "However, in prior years heavy reliance on Central Bank financing pressured international reserves and left the burden of macroeconomic adjustments to credit policy. With low foreign exchange reserves, a long-standing fixed exchange rate regime and no active domestic Treasury Bill market to facilitate monetary intervention, monetary policy tools are limited to bank reserve requirements, which at 24 percent contribute to high real interest rates.

"Reserve coverage is low, at an estimated 1.9 months of imports in 2000 and intermittently importers have to queue for foreign exchange for as long as several weeks," S & P pointed out. The report described Belize's economy as: "A low income narrowly based and import-dependent economy, vulnerable to adverse external developments. Two important crops, sugar and bananas, account for 14 percent and 9 percent of exports of goods of nonfactor services respectively... They are profitable only with preferential trade treatment, the continuation of which is uncertain, especially in the case of bananas.

"Rapid growth in citrus and shrimp exports, each to about 9 percent of exports, will reduce this vulnerability, although they too are susceptible to commodity price pressures and adverse weather conditions. Economic efficiency is hampered by significant, albeit reduced protectionism and comparatively high utility rates."

The report continues: General government debt is estimated to fall just under 50 percent of GDP this year. Public sector external debt is estimated at about 45 percent of exports of goods add services, down significantly from almost 60 percent in 1998, before the government privatization programme was well underway.

Regarding Belize's political stability. S & P said:

"Belize has had a solid multiracial parliamentary democracy since its independence in 1981. Power has regularly alternated between the two main political parties. In the past, government has taken difficult economic stabilization measures when faced with adverse circumstances."

Front Page - Amandala - August 27, 2000

Belize Plans US$50 Million Bond to Develop Caribbean Resort
MEXICO CITY Aug. 23 (Bloomsburg News)
Belize lay sell a 550 million bond next year to finance a four-star hotel on a Caribbean island that inspired the Madonna song "La Isla Bonita."

The island of San Pedro, off The northern coast of the Central American country has excellent diving along its reefs as well as deep sea fishing. In recent years, the island, which forbids cars on most roads, has attracted the wealthy, who have built secluded vacation houses.

"We will need to go to the private capital markets in the US.," said Keith Arnold, the governor of the Central Bank of Belize, in a telephone interview from Belize City. "Not this year but certainly next year."

The Belize Government has already received a "BB" credit rating from Standard & Poors, two notches below investment grade. And in June, Belize obtained a $29 million loan through a private offering led by Salomon Smith Barney. The five-year, 9.25 percent bond was sold to yield about 11.25 percent, Arnold said. The new bond will be a public offering.

Belize has worked to make itself attractive to investors. S&P said the government has followed conservative economic policies such as selling off state-owned companies and running a budget deficit lower than 2 percent of Gross Domestic Product.

Belize has already sold off its telephone and electricity companies and plans to sell its state water authority as well as ports and airports to help raise cash for infrastructure spending. The government is particularly focused on the tourism industry, which it hopes to develop taking advantage of the country's coral reefs, tropical forests and Mayan ruins.

Until recently Belize has financed new infrastructure with the help of loans from the World Bank and the U.K., U.S. and Taiwanese governments. Now, it wants to borrow more to expand faster, Arnold said.

Historically, the Belizean economy has been dependent on agriculture exports, mainly sugar and bananas, and the government wants to reduce this reliance. In 1994 tourists spent $111.5 million, up from $108.3 million the year before, according to the Tourism Board.

The Central Bank expects the economy, which supports a population of about 250,000 people, to grow 5 percent this year.

(Ed. NOTE: An official of the Central Bank told the newspaper today that under government's "small equity investment program," which allows government to become a partner in businesses in the hotel industry, government, through the Ministry of Tourism, will invest the US$50 million in what is expected to be a hundred-million dollar plus hotel project on San Pedro.

The Government of Belize a couple years ago had invested US$1 million in the Ramada Hotel, which subsequently went into bankruptcy. Government lost its investment in the hotel when it was sold. Belize's public sector external debt is said to be, as of June this year, at approximately BZ$650 million. ( CRITICS SAY IT IS $1450 MILLION ). The truth is not known as it is a big political party secret by Minister of Finance Ralph Fonseca and Prime Minister Said Musa.

A Board of Village Council Association will substitute for a non-existant six District Governments. In an attempt to keep political control of the nation of Belize by townies of the old colonial capital, parasites that feed off government jobs rather than produce. A new National Board for Village Councils has been formed.

The new Village Councils ACT is pretty good actually and it remains to be seen how effectively that Village Councils can implement their liberties in building a rural democracy in Belize. Methinks the PUP political party miscalculated here! They did indeed rectify the miscalculation problem with a monopolized townie controlled Town Councils ACT, but the Village Councils ACT was pretty good. While Towns in the TOWN ACT are shut out of democracy, the Village Councils if left alone stand a good chance of bringing some sort or rural democracy to a nation that is dominated by townies of the old colonial capital.

The new relationship between 300 Village Councils of the Association scattered throughout the six rural districts and the national port townie controlled political party dominated national government in Belmopan is going to be exciting to watch. Who controls what is going to be a treat!

Money of course is at the root of all political control. The Village Councils immediately are having workshops to talk about finance, local priorities, policy making, and spending along with their relationship with the national government.

The townies of the port of Belize City of the old colonial capital are still well entrenched and in control so far. They control the Prime Minister position, the Ministery of Finance, the Interior Ministry and in a relic of Empire days, have a national oppressive political party controlled police force and army to enforce their will.

Options are severely limited for democratic developments in political priorities on the rural local scene with spending and such. He who has the money also calls the tune!

Foreign governments, foreign international bank lenders could however tilt the country of Belize into a more democratic mode and create more rural development, if they would concentrate on giving GRANTS for specific rural projects directly to the National Association of Village Councils Board, rather than filter the process through an expensive centralized government.

It is going to be interesting to watch, but the townies of Belize City still hold all the ACE cards with the national police, the army, courts, the rubber stamp political party legislature, the finance ministery and treasury and appointed pet Senate.

There is no separation in Belize between Executive Power and the Senate and Legislature. No checks and balances! No telling how far the PUP, or the UDP parties which are townie controlled will allow democracy to develop?

There are going to be some serious political tangles coming up, for sure!

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