REPORT #454 December 2001

Produced by the Belize Development Trust

In the year 2000, the government revenue was about $360 Belize millions. We do not yet have the figures for the year 2001. But projections for the year 2002 include a drop in income to around $305 to $330 millions Belizean currency.

Monitoring government announcements, particularly from the Cabinet, the Economic Minister and the Prime Minister and various media sources, it would seem that the year 2003 will not produce enough Foreign Exchange to service the requirements of the country?

Besides the estimated $1.7 billion in foreign international debt principal and interest payments requiring foreign exchange. The GOB represented by the party dictatorship of the PUP political party has also given agreements to service major utility privately controlled monopolies with guaranteed foreign exchange repatriation of profits and dividends. Couple this with operating import requirements of the government in Foreign Exchange and the merchants and not even counting the productive sector equipment and other import requirements, there is not enough foreign exchange being generated to service the requirements of everybody.

Other problems face the PUP political party run government of Belize. The revenue cash stream from taxes for the Government are less than required to support the current organization of bureaucracy and political patronage cash flows. This has been compounded in recent years, by the political party borrowing foreign loans and spending at a rate, double the actual revenue from taxes that the government earns each year. In the words of Federal Reserve Chairman Greenspan of the USA. You can never tell when the bubble will stop expanding and burst. The bubble of PUP political party borrowing foreign loans and spending is still expanding, albeit at a slower rate. But when will the bubble burst? At some point reality has to come to the government of Belize? If they had a plan, of when to stop the growth economics promoted by the Economics Minister from Foreign Borrowed loans, and start paying off the excercise, it would seem now is as good a time to let the public know when the payback period starts for the $1.7 billion foreign debt, that Belize now owes. I for one, would like to see the plan prepared to amortize the loans?

In the meantime, it has reached the stage when revenue from taxes for the government is less than that required to cover the expenses of government and pay off foreign debt. In other words, we have less money flow coming in, than our operating costs and debts. So, what is the plan from the PUP to handle this situation, is the question?

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