Belmopan - 17 January, 2003.
THE BIG PICTURE
This, the fifth and
last budget of this Parliament, like the four before it, is designed to
rationally manage the transformation of our economy from the stagnant
mess we inherited in 1998 to the vibrant and productive economy that the
people of Belize swept us into office to achieve. Our government's
ability to effectively deal with change has been tested and proven time
and time again, as we faced and dealt with destructive hurricanes, the
challenges of globalization and the global fallout of the terrorist
attacks on September 11, 2001. The imperative need for proven managers
to deal with change compels Belizeans to once again entrust the duty of
nation building to a PUP government whose hallmarks include compassion
If the last century
was difficult for underdeveloped countries to grow and prosper in the
harsh realities of world domination by the powerful few, we are learning
that the 21st Century is far meaner, more competitive and more demanding
of prudent planning and bold initiatives for small countries. But even
the world's mightiest nations are facing difficulties. The United States
of America, the world's largest economy, grew in 2002 by a meager 2.4%.
In Europe, growth is expected at less than 1%. And in Japan, the economy
will actually shrink by half a percent. Expectations have become so low
that the 1.6% growth forecast for Britain is considered robust and
Canada's 3.4% is ranked as stellar.
Closer to home, both
the Caribbean and Latin American regions experienced shrinking GDPs.
Television images of social unrest in the face of massive unemployment
and growing poverty have accompanied these depressing economic data,
particularly in South America, where economic instability threatens
In the Caribbean,
lower discretionary income for potential travelers in its major tourism
markets of North America and Europe, coupled with the threat of
terrorism and the after- shocks of 9/11 have crippled the vital tourist
industry of many countries, with resulting increased unemployment and
loss of revenues.
In this ocean of
lackluster economic performance and despair, Belize makes its mark by
posting a formidable 4.4% growth in GDP for 2002. That didn't come easy,
nor automatically. It is a result of this government's prudent yet bold
management of our economy.
How then has our
economy fared over the past year?
Belizeans will be
proud to know that we are beneficiaries of a growing $1.7 billion
economy, up by over $100 million from 2001. This new economic activity,
standing on a balanced base of agriculture, aquaculture, tourism &
services and manufacturing & construction, has driven unemployment even
lower, down to 9.1% in 2002 from 11% in 2001.
expansion were gross international reserves of $US 114.3 million as of
the end of 2002, up by 2.1% from the previous year and covering almost
exactly the optimal position of 3 months of imports.
climbed to $589 million, while imports fell for the first time in many
years, beginning what we expect will be a trend of reducing the trade
deficit. Confidence in government's fiscal and monetary policies was
underscored by yet another expansion in credit to the private sector,
which grew by $110 million to $885.1 million.
And for the first
time in modern Belize, the domestic overdraft of Central Government was
not used, showing a positive $2.1 million, with additional deposits of
$22 million at the end of 2002.
For our economy to
grow by $100 million and for 2,000 more Belizeans to find jobs in 2002,
the engines of the real economy were firing on full throttle, led
principally by the phenomenal growth in the tourism and services sector
and by transport and communications. Understandably, weak performances
came from the citrus and banana belt, where the destruction wrought by
Hurricane Iris is still taking its toll.
As we review the
national performance, let us start in the North, where sugar exports
earned $65.8 million on sales of 102,923 long tons of sugar exports.
This production represents an increase of 10.8% in value and 14.9% in
volume. Sugar prices in both the European and US markets increased
slightly, while the price of Molasses grew by 23%. Molasses sales
totaled 29,099 long tons, earning $2.8 million, a 62.4% increase
compared to 2001.
2003 should witness
a further rebounding of sugar production by a projected 3.5% and a
further rise in dollars earned, particularly in a growing European sugar
In the South, on the
heels of the record 2000/2001 citrus harvest, the 2002 performance is
less upbeat. Revenues for the year fell all around, from citrus juices
by a third to $51.1 million and from concentrate by $18.6 million,
representing a drop of 25.6% in citrus deliveries.
The growers and the
nation can be encouraged, however, by the forecast of a solid 34.5%
increase for 2003.
Banana exports fell
by 18.7% compared to 2001 but, like citrus, the projection is for a
robust 2003 crop.
From the sea, Belize
earned $60.8 million on the export of 6.6 million pounds of marine
products. The 2003 projection for marine products, fish, conch, lobster
and shrimps, including farmed shrimps, is for earnings of $137 million,
more than double this year's record.
And with the
involvement of all districts, tourism has truly blossomed in Belize,
even as it has plummeted in the Caribbean and other regions of the
world. In 2002, overnight arrivals grew by 1.8%, totaling an expected
199,493 bona fide visitors. Lending the ultimate world-standard stamp of
approval to our destination, four new international flights have
recently started service: US Air from Charlotte, Air Jamaica from
Montego Bay, Continental from Newark and American's second flight from
Miami. And I am happy to announce here today that Austrian Airlines has
indicated its intention to begin regular flights to Belize via Havana
Cruise tourism has
led the growth trend in the service industry with a increase from under
15,000 in 1998 to over 300,000 in 2002, the highest growth rate in the
entire hemisphere for this industry. Reversing the seasonality weakness
of tourism, cruise ships will now arrive January to December in 2003 and
is expected to grow further in a rationally managed manner.
also showed strong earnings growth in 2002: papayas, for example,
generated a 50% increase to $15.5 million and sawn wood rose by 13% to
conducive to growth and development has been a major priority for this
government. A lowering in 2002 by 90 basis points or almost 1% of the
weighted average lending rate has meant lower interest rates from
lending institutions for Belizeans borrowing for new homes, cars or
US$125 million Bears Stearns Bond Issue reduced the Central Bank's
long-term foreign liabilities by $72.5 million. The effect of this
landmark debt restructuring will be to reduce debt service payments in
2003 and beyond.
To build, we must
borrow, and we have done so responsibly. The Public Sector outstanding
external debt stood at US$525 million or 62% of GDP at the end of 2002.
Though up by 10.7% compared to 2001, Central Government's portion is
$404.2 million or 47%, well below the level of 60% of GDP. In fact,
public sector debt outside of Central Government actually declined $15.3
million, since it also benefited from the debt restructuring.
PAYS OFF 2002/03
After the shocks of
four storms in three years, we pledged fiscal discipline. It has paid
off handsomely, and we will start 2003 with a recurrent surplus of $35
million, more than three times the surplus achieved last year. Recurrent
revenues of $412.9 million, and recurrent expenditures of $377.9
million, are expected.
managers of the people's money, we have been aided by a new computerized
Fund's Control Program that prohibits Ministries' spending beyond
approved budget allocations. Tighter management of utility expenses,
fuel costs, our vehicles fleet and foreign travel have yielded positive
This fiscal year we
expect capital receipts of $32.3 million, principally from previous
equity investments along with $10 million in capital grants which, when
added to the unprecedented recurrent surplus of $35 million, make $77.3
million available for Capital II investments. Capital II investments are
expected to reach $73.5 million, thus producing an operating surplus of
$3.8 million. Add to this $12.2 million in foreign grants and some $16
million will become available for Capital III expenditure, along with an
additional $67.8 million in foreign financing.
The bottom line for
all these numbers is that we will achieve our target of reducing the
overall fiscal deficit to less than 5% of GDP.
THE 2003/04 BUDGET
The 2003/04 Budget
proposes a continued responsible and compassionate approach to managing
the people's money. We project recurrent revenues of $448.1 million and
recurrent expenses of $417.1 million, yielding a recurrent surplus of
This surplus, almost
at the same level of this year, emerges even after we keep our sacred
commitments of salary increases to all public officers, teachers,
policemen, soldiers, doctors and nurses. On April 1, 2003 we commence a
three-year salary increase package of 8% for junior officers and 5% for
senior officers, compounded each subsequent year to achieve a cumulative
increase of 26% for junior officers and 16% for the senior ranks. These
increases will also benefit all government pensioners. This government
promised to negotiate in good faith and to deliver when we could afford
to, and this year we are proud to reward the work of our public
When the recurrent
surplus of $31 million is added to $22 million in capital revenue and
$10 million in capital grants, this yields $63 million for Capital II
investments. Since Capital II is programmed to spend $60.8 million for
the new fiscal year, an operational surplus of $2.2 million is achieved,
which together with $8.6 million in foreign grants, provides $10.8
million for Capital III investments. Capital III investments will total
In summary, when all
expenditure is netted against all revenue and grants, the overall fiscal
deficit is projected at $51.5 million, or 2.8% of GDP, which is
comfortably below our target of 3% of GDP. When you take into account
the $1 billion in lost earnings and the massive reconstruction costs
following three years of hurricanes, we believe that we have achieved
our objective of investing in our people today without burdening future
investments proposed in Budget 2003/04 are many and they are targeted to
improve our quality of life and our productivity:
We will invest $9
million for Hurricane Preparedness, for retrofitting 350 schools and
public buildings, constructing 9 new buildings for shelters and
We will invest $7.8 million for SIF, CDI and BNTF projects specifically
targeting disadvantaged and poor rural areas, in initiatives such as
potable water, classrooms, rural housing, income generating projects and
We will invest $3.8
million to further strengthen our agricultural sector, through BAHA and
CARD, in order to improve the variety, quality, packaging and promotion
of our products.
We will invest $9.5
million in the Southern Highway, as we near completion of these 105
miles of paved road that link Toledo, a district bursting with
potential, to the rest of Belize.
We will invest $5
million on the Orange Walk Bypass to improve safety and reduce
congestion in Orange Walk Town, and $3.9 million to improve streets and
drains in our municipalities.
We will invest $4.5
million on expanding and improving our secondary education system, on
teaching our youth a trade by extending nationwide Centers for
Employment Training Programs and on curriculum and classroom expansion.
In the new budget, overall investment in education will once again
exceed $100 million dollars.
And, again this
year, $5 million is allocated to low cost housing for Belizeans.
Some $13.8 million
will be invested in the Blue Creek Road, the San Pedro Pier, the Young
Bank Bridge and the extension of Marine Parade, all projects that will
immediately impact on trade, transportation and tourism.
investments to be made include better land management and distribution,
tourism infrastructure and public health sector improvements, through
ongoing co-financed projects.
QUALITY OF LIFE AND
In addition to new
projects, we are determined to address the primary functions of
government - personal security, access to quality and affordable health
care and education, and opportunities for our youth and for our women.
Department, with the assistance of the BDF, will continue to tilt the
balance on our streets squarely in favor of law and order, especially
with more Police recruits, a new fleet of 100 patrol vehicles with a
modern management and maintenance program, new equipment and staff at
the Forensic Lab and new uniforms and gear for the Police officers.
The root causes of
crime must and are being confronted, but causes cannot be excuses for
The Commissioner of
Police and his team will continue to aggressively monitor deportees,
patrol special policing zones, promote neighborhood watch groups,
improve communication systems, work with private security firms and
prosecute criminals. There is no relenting in this war to make Belize
safer and more peaceful.
And Belizeans will
be more at peace knowing that when sickness strikes, the NHI will afford
them quality healthcare, not just on the Southside of Belize City, as it
has for the past two years, but everywhere in the country. Today, our
government places on record its intention to introduce the NHI package
of health care benefits to the North side of Belize City in 2003, and to
subsequently roll out the NHI to all districts, as the public sector
health reform projects near completion. This will be accomplished by
utilizing the Social Security mechanism, without introducing any new
taxes. All Belizeans should have access to specialist doctors and
equipment, benefit from quality medicines and have a choice in health
Those afflicted by
the terrible HIV/AIDS disease deserve our special attention, especially
if we hope to contain this epidemic affecting all humanity. We will
continue our special program for anti-retroviral medications and step up
AIDS awareness programs.
One crucial sector
of citizens at risk is our youth, who will continue to receive our
attention through programs like an expanded Youth for the Future, the
Youth Cadet Corp, the Youth Enterprise Fund and more investment in
sports. We will invest more resources this year in Scouts, Girl Guides,
Cubs, Brownies, YMCA and YWCA, in order to offer more alternatives to
For the most needy
in our community, those who receive weekly social assistance, we will
double the grants that Social Development and Social Security offer,
arranging for delivery of this stipend where possible.
For our elderly
women over the age of 65, who have given so selflessly to raise our
families and keep the home, we will extend non-contributory Social
Security benefits to them all.
Poverty may never
completely disappear, but neither should our will to help every Belizean
family lift itself from this unacceptable condition.
MONEY BACK TO THE
To rise from
poverty, a person often just needs one chance, one break in life. As we
continue the education revolution, we will launch a new program to
tackle an issue that has been dear to the PUP from its inception - land
reform. Land as a marketable asset is a powerful weapon in poverty
alleviation, tested and proven by the PUP in the 1950's with the land
reform of that era; that is how the modern nation of Belize afforded
tens of thousands of citizens a share of the nation's wealth. We will
spearhead another phase of this land revolution, offering once again
tens of thousands of Belizeans the chance to own a piece of the jewel.
We will start this year with a target of 6,000 house lots for first-time
citizens that chance for a better quality of life, with more
opportunities to get a good education, better housing, access to water,
electricity and telephone, has been at the heart of our core objectives
from the founding of our Party. And so our government also proposes,
effective April 1, to put more money in the hands of the people by
raising the level of those exempted from personal income taxes from
$20,000 to $25,000. 2,500 more Belizeans will pay no income taxes
whatsoever, which takes the grand total to 50,500 Belizeans that pay no
income taxes. Our goal is to eliminate personal income taxes completely,
placing this money in the pockets of the hardworking men and women of
There is one other
sweeping initiative that this budget offers to put more money back into
the pockets of our people. Starting April 1, 2003, the kilowatt cost of
electricity will fall by 31% for small and medium consumers.
Over the past three
years, three separate and significant reductions in electricity rates
were implemented through the Public Utilities Commission and provided to
electricity consumers by Belize Electricity Limited.
On April 1, 2000
over 600 commercial customers benefited from a restructuring of the
commercial tariff and a reduction in rates, resulting in savings of over
$2,000,000 per annum.
On July 1, 2001 a
new Industrial Rate was approved that provided large industries such as
the Citrus Industry and the Aquaculture industry a chance to be more
Between 2000 and
2003 the PUC regulated and implemented a reduction in the cost recovery
allowed to BEL for the transmission, distribution, and commercial
aspects of their operations. This reduction was used to offset the ever
increasing international oil prices and their inflationary effect on the
cost of electricity, and to finance the rehabilitation work required to
re-establish power after Hurricane Keith and Iris. This, in effect, was
a rate reduction in real terms and provided stability and reliability in
electricity supply to consumers.
The Government now
intends to round out its rate reduction program by providing relief to
small and medium residential consumers. The Public Utilities Commission
and Belize Electricity Limited will increase the upper limit for
qualification for the Social Rate Category from 50 to 125 kwh per month.
initiative, some 14, 500 small and medium residential consumers will
enter the program, bringing the total number of households benefiting
from the program to 24,000 or 42% of the total customers served by BEL.
This means that a qualifying customer who's monthly electricity bill
averages 100 kwh per month will be paying $21 instead of $30.50, an
effective savings of $9.50 or 31 %.
Upon completion of
this initiative, the Government, despite increasing international oil
prices and several major hurricanes, would have provided significant
rate reductions across the consumer spectrum, facilitating businesses
and being socially responsible.
NO TURNING BACK
The people of Belize voted for our government because we are the Party
of hope, the Party of vision, the Party of possibility and the Party of
results. Look at the last 4 ½ years and the difference is unmistakable:
We inherited a $1.2
billion economy limping along at 1.4% growth, and we have expanded it to
a $ 1.7 billion economy growing an average 6.5% over the last four
We met unemployment
at 14.3% and slashed it to 9.1%;
We found 73,330
Belizeans working in 1998 and today there are 90,800 Belizean workers -
17,500 more people on the job;
We inherited foreign
reserves of US$42.2 million in 1998, and we have built this to an
impressive $US114.3 million;
We found the average
lending rate at 16.3%, and it is now down to 14.5%
We met the 15% Value Added Tax and the 5% tax on savings and we got rid
of both of them.
There is no turning
We have taken citrus
and bananas to historic highs in production, tripled receipts from
papayas and fruits and tree crops, doubled farm shrimps exports, doubled
vegetable harvests and hot pepper exports;
We have stood firm
by our cane farmers, offering almost $6 million in fuel subsidy, $1
million in price support, title to cane lands and quotas and credit
lines of over $6.2 million.
We have led a
tourism boom, with four consecutive years of increases in overnights
tourist arrivals, a 2000% increase in cruise ship arrivals, a doubling
of hotel occupancy and a 25% increase in tourism receipts;
We have launched the
International Free Zone at the Airport and will shortly embark on the
Western and Southern Free Zones, creating thousands of new jobs;
There is no turning back!
We have built 900
new classrooms, we are installing 5000 new computers, we have made
available $20 million dollars for student loans and created a new
University of Belize as highlights of the education revolution;
We have started NHI
for affordable quality health care for the 27,000 Belizeans who
registered on the south side. At the same time, we have improved public
clinics and health posts and placed nurses and nurses' aides in almost
every village and doctors in many remote areas.
We have increased
the minimum wage for domestic workers and shop assistants and introduced
progressive policies for gender equality, the elderly and families and
There is no turning
We have introduced
competition to telecommunication, driving down rates on long distance
calls and soon on cellular telephones and the Internet too;
We have expanded
water systems and electricity to almost every village, doubled the
capacity of water supply to Belize City and vastly improved the
efficiency of water delivery;
We have started the
process of building Chalillo for cleaner, cheaper and more independent
energy, to bring down electricity rates while installing over 5,000
public lights in every district;
There is no turning
We have led a
housing boom of over 8000 new houses, creating model communities like
Democracia, Los Lagos, Maxboro, Fresh Pond, Santa Rita, Orchid Gardens
Extension, Piccini Extension, Mile 8 ½, Hillside View in Santa Elena ,
San Pablo in San Pedro Ambergris, and Yarborough Development;
We have raised the
salaries and benefits of Police Officers, upgraded 57 police stations
and substations, built 12 new stations, opened a new Joint Intelligence
Gathering Center and re-energized the fight for law and order;
We have removed the
requirement for Ministerial approval to mortgage leased properties,
provided thousands of new housing and farms lots and introduced a modern
land management system with more than 120,000 registered parcels;
We have expanded the
Senate to make it more representative, funded the Ombudsman and
Contractor General, appointed more judges and a new DPP with security of
tenure, elected Mayors directly, empowered Village Councils and even
funded constituency offices for Opposition Members of the House;
We have amended the
Fiscal Incentives Act to accommodate small and micro enterprises,
addressing the urgent need to give tax breaks to Belizean small
There is no turning
In just this term of
office, we have made available $16.5 million to micro enterprises and to
farmers, creating 5,685 jobs through the Small Farmers and Business Bank
In just this term of
office, 10,000 loans have been processed at the DFC, valued at $302.8
million and generating in excess of 5,000 new jobs.
In just this term of
office, 95 companies have qualified for Development Concessions,
bringing $434.4 million in total investment and employing 5,378
In just this term of
office, 98 new companies have received Export Processing Zone status,
delivering 2,331 jobs and investments valued at $248.8 million.
In just this term of
office, the expansion of the Corozal Free Zone has attracted an
additional $50 million in fresh investments, providing an additional
MOMENT OF TRUTH
There can be no
turning back, Madam Speaker, because this PUP government has been the
best government for Belize.
A far better
government than the one before and a far better government than those
across the aisle now offer Belize.
John Kennedy told us
that "Change is the law of life; those who live only for the past and
the present are certain to miss the future."
This PUP government
has proven its capacity to manage change and face all challenges! We are
the Party of change: attracting young and qualified representatives,
re-inventing itself, creating novel ways to deliver land, houses,
healthcare, education and personal security to the people we serve.
There is one constant: we are not motivated by hate, malice or
vindictiveness but by our unwavering confidence in the talent, fortitude
and wisdom of the Belizean people. The people are the most powerful
engine of economic growth and it is in the people that we have made the
biggest investments these past five years.
This is the year of
truth for our nation, when the people will decide in free and fair
elections which party they wish to be their government. We cannot turn
back the clock or go back to the world as it was. We must keep moving
forward. We must be bold, innovative, compassionate and always changing
to meet the challenges of the times. That is the hallmark of the PUP. -
the Party with vision and a history of performance; the Party that is
committed to peace, prosperity and justice for all; the Party that,
especially now, the people of Belize want to see in government.
Let's go Belize. No