REPORT #389 September 2000

Produced by the Belize Development Trust

Subject: Re: Bz-Culture: Belize Plans US$50 Million Bond to Develop Caribbean Resort!

If Ralph Fonseca and the PUP haven't learned from the lost $1 million in the Ramada, they should have. No way, would I approve of $50 million Bond loan debt for investment in only one resort when it is at the end of Hurricane Alley and likely to be wiped out by a Hurricane Tornado style. Those guys have never flown over a hurricane path through the Yucatan. It looks like somebody took a lawnmower, set inches from the ground. Nothing left standing, no ironwood trees, NADA!

They want to invest, they should be putting money into upgrading San Pedro to take 727 airplanes and be doing joint ventures with seasonal charter/aircraft lease people to run specials out of Frankfurt, London, Montreal and Toronto, particularly in the winter months. Direct to Caye Caulker and San Pedro. Now that would boost tourism and watch the investment dollars flow in from speculators. No government money, loans or otherwise at all needed for hotels after that.

I'll believe they are serious about tourism, when I see the government and tourist board advertising and leasing, or at least sharing the lease costs on airplane charters, direct flight from Toronto, Montreal, London and Frankfurt, during the Christmas, January College breaks. Thats what tourism needs. I'd start such a venture myself, but with government backing to cover the startup costs, would willingly go into it. Lease and advertise charter flights, round trip, three weeks to one month apart. Maybe two flight during season from each of the above destinations. Be glad to organize and run it, they want to put up some money. Got three sharp daughters experienced in the tourist business to help me. Tina, Wendy and Diane Auxillou.

For this season, you got about one month to get brochures in the hands of travel agents. Could be done, but need hurry! Advertising has to be out by Oct 1st.

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$1500 million.

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