Try as he might, Prime Minister Hon Dean Barrow could not sugar coat the bitter pill that there are tough economic times ahead for Belize, when he held his second quarterly press conference at Belize Biltmore Plaza Hotel on Wednesday morning, June 13.
While he assured the nation that there is no way the government would raise taxes, which would stifle economic growth, he admitted the government would have to find ways to curb spending, without compromising its pro-poor programs.
The delay in presenting the annual budget, which is normally ready in late March, to June 29 already had most Belizeans suspecting the government was strapped for cash, and so it was no surprise when Barrow said the government anticipates a calamitous $30 million shortfall in revenue from oil exports, as a result of the steep drop in global oil prices and local oil production tapering off at Belize Natural Energy.
This may be good news for consumers at the pump, but it means government will have to implement some serious belt-tightening and austerity measures. “We need to find more oil,” Barrow summed up.
It’s no secret that the government is seeking to restructure the Superbond debt and get relief from the Superbond holders. In this regard, the government is seeking to get a partial guarantee from the Inter-American Development Bank, which the IDB board would have to approve, as well as some assistance from the International Monetary Fund. But to win over the support of international financial institutions, the government will have to demonstrate financial discipline and prudence.
On a positive note, tourist arrivals for the first quarter had increased 8.5% over the same period last year, and the trend has been increasing over the second quarter. The tourism sector is anticipating a 10% increase in visitor arrivals and earnings by the end of the year, Minister of Tourism Hon. Manuel Heredia told The Reporter.
The agricultural sector is also doing well, as this year’s sugar cane harvest which ended on Saturday, June 9, reported a record amount of cane milled, over a million tonnes with a little over 114,000 tonnes of sugar produced. This represents a vast improvement over the past five years’ slump of 90,000 tonnes annual production.
And just as Barrow had announced the write-off of $17 million in non-performing home mortgages as a Christmas gift to Belizeans late last year, he announced further write-offs of both housing loans and student loans at the Development Finance Corporation. All loans where the original amount borrowed was $20,000 or less and all student loans of $6,000 or less, the remaining debt would be completely forgiven provided the borrowers had paid off 20% of the debt. The cost of these proposed write-offs will be offset against a debt which the DFC would be repaying to government in 2018.
Homeowners at Mahogany Heights will also have their mortgages written off, with no conditions, as the Government cannot guarantee undisputed ownership to the land on which their homes are built.
This is because the previous PUP administration, which bought the land for the housing development, bought from someone who had the right political connections, but as it turned out, was not the true owner of the land, so Government did not get a proper title.
Motorists may also expect some relief at the pumps, not just from lower world oil prices, but also because a new entity will manage Belize’s foreign purchases of fuel.
Venezuela has long offered Belize some savings through economies of scale, if Belize were to buy Venezuelan fuel under its Petrocaribe initiative, but the local fuel company, Esso, had refused to deal with Venezuela, because they preferred their own suppliers in the United States.
Now a company called PUMA, a subsidiary of another multinational called Trafigura, is looking to explore the Petrocaribe option. Buying fuel from Venezuela won’t be any cheaper than world market prices, but Venezuela would allow government to defer part of the cost through a long-term, low interest credit. This would be over $100 million per year, which the government could then use for its social programmes to benefit the Belizean people.
With crime a major concern to all Belizeans, the issue of the Gang Truce might be considered a dead issue. But Barrow said the government would continue the gang truce work programme, which provides work four days a week for Belizeans who have been affiliated with gangs to give them a source of income and so keep them out of trouble.
He pledged that government would continue to provide jobs for anyone, who, despite their criminal past, demonstrated that they were willing to abide by the law and work for a living.
Even Barrow could not ignore the ongoing series of shootings and murders, which have continued unabated despite the truce. He refuted any suggested that there is only a nominal truce, and said that not all the gang members who were invited to participate in the truce had accepted the invitation. He said that some of the ongoing violence was being perpetrated by gangs who were not included in the truce.