IMF says Belize’s Economy is Robust

The Island Newspaper, Ambergris Caye, Belize            Vol. 15, No. 18            May 5, 2005

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After the riots, strikes, and constant shortage of one utility or the other, Belize received unexpected news last Tuesday. After a meeting with the International Monetary Fund (IMF) in Belize, the Belize Business Bureau’s (BBB) executive committee stated that IMF had described Belize’s economy as “robust.”

        After meeting with Belize’s industry representatives, including cane farmers, the Belize Chamber of Commerce and Industry, Central Bank and Ministry of Finance, along with the tourism sector, IMF representatives stated that all discussions were “frank and friendly.” Other IMF conclusions included: economy growth has increased by 50% and the need for Belize to keep away from fraudulent investments;IMF reiterated the recommendation they had previously given Belize to minimize their consumption, particularly by the public sector. It was agreed that Government of Belize needs to “tighten its belt” for a prudent time so as to maintain fiscal deficit under three percent.

        Other conclusions by the IMF team were that that the peg of the Belize dollar to the US dollar is excellent and devaluation would not be good. IMF stated that the present tax system is not keeping with growth. They endorsed the Government of Belize’s intention for further tax reform. The team also agreed that anti-trust legislation would be an asset to the country’s economic outlook, however with respect to foreign direct investment, Belize and small countries must seek genuine investors with a “social face.”

        It was concluded that a second tier bank is the way forward for the facilitating of affordable financing in the rural areas and for the productive sector, and IMF also noted that the profitability of the monopolies might be skewing the profit and losses of the small and medium enterprises.

        IMF consultants said that while the Belize Sugar Industry (BSI) was in need of urgent attention, BSI was regarded as efficient when compared to other countries in the Caribbean. Although findings revealed that the foreign reserves are healthy for the fiscal year 2005-2006, with respect to the continued rise in electricity, further co-generation expansion is needed

        Finally, IMF stated unequivocally that there is an urgent need to come to a social consensus to move Belize forward; continued social upheaval as in the immediate past and present was the way down the road to economic and social collapse after which recovery would be painful and lengthy.

        The IMF team consisted of Bernard Fritz-Krockon, Mission Chief, along with Was McGrew, Mariana Torres, and Gamal El-Masry. Accompanying the team was Central Bank of Belize representative Yvette Alvarez. Representing the BBB executive committee were President Dr. Cardo Martinez, Bridgett Cullerton (General Manager for the Citrus Growers Association), Meilton Auil (General Manager for JMA Motors), Ricardo Pelayo (Manager for IBD Division Atlantic Bank of Belize Limited), Elizabeth Ross (President for the Caye Caulker business Association), Lloyd Carillo (General Manager for the St. Francis Credit Union), Giacomo Sanchez (President for the Institute of Chartered Accountants), and Misael Flores and Arturo Lizarraga (financial consultants).
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