REBALANCING GROWTH TO WORK FOR ALL BELIZEANS, BUDGET SPEECH, 2004-2005.
24 January, 2004.
WE HAVE COME A LONG WAY!
Please allow me to set the stage for this year’s budget speech with a
quotation from the first paragraph of our Prime Minister’s first budget
speech on March 16th. 1999. I quote “This budget is a budget that begins
to put into effect our commitment to change Belize for the better. It is
a budget that takes the brake off the economic train and gets it moving
again in a direction and at a pace that will benefit Belizeans
immediately as well as in the long run. It is the last budget of the
20th. Century and begins to set the framework for the shape of a new,
revitalized, modern Belizean economy for the new millennium. It is a
budget that heeds the voices of our people in all sectors- workers,
farmers, entrepreneurs, investors, the poor and the disadvantaged- and
creates the conditions necessary for jobs, for rewarding enterprise and
for providing improved public services to all our people.”
HERE WE ARE!
Madam Speaker, this year’s budget celebrates our Prime Minister’s bold
initiative played out from then until now. Despite the many challenges
of hurricanes, 9/11 and a world economic downturn, right thinking
Belizeans will agree that after the stagnation of the 1993 to 1998
years, today we are living in a new, revitalized and modern Belizean
economy. We are living in a good country! The economic train has long
had its brakes unlocked! Belizeans have proven their resilience when
they have truly been set free!
At the same time, I am not unaware of this turn in history with its
accompanying significant responsibility that has me here in all humility
today. We cannot go on then without congratulating the Prime Minister
for his bold and refreshing leadership that has put our PUP team
together, firmly supporting his visionary initiatives! And I thank all
of my colleagues for their support and wisdom over the years! I have
learnt something from each and every one of them! I thank you all!
Madam Speaker, this year’s budget will “Keep Belize Free”! This budget
will continue our Prime Minister’s policies that have almost doubled the
size of our economy in six years to $2bn with unprecedented growth. This
budget will also call on the new “Go Belize, Go PUP” spirit to rebalance
the opportunities presented by this growth. Rebalance our fiscal and
monetary measures to ensure that Belizeans who need a helping hand the
most- have that hand held out by a PUP government that listens and
cares- assisted by those in our society who have already directly
benefited from today’s new, revitalized and modern Belizean economy.
These rebalancing measures are all home-grown, not brought on by any
International Financial Agency, but are fiscally responsible and
assembled by a Belizean team of professionals and fine tuned by our
experienced members of Cabinet. These measures have nothing to do with
the “Cassandra stuck”, hysterical and monotonous howling of
“retrenchment and devaluation” from those void of ideas and trapped in
their own prison of cynicism and hate. On the contrary, they will secure
a much better paid but modernized public service, further strengthen the
Belize dollar, and most importantly allow all Belizeans more affordable
access to the new basics of life.
THE GLOBAL PICTURE
Thanks to the vision of Prime Ministers George Price and now Said Musa
creating a stable Belize, for the most part Belizeans have been
protected from a world in economic and political turmoil over the past
couple of years. The effects of global terrorism and deflation imported
from economies that have endangered their monetary bases to drive their
international trade left many developed and undeveloped countries with
huge deficits. Since the third quarter of 2003 however, many of the
developed countries led by the USA seem to be recovering and are posting
significant positive economic growth.
Regionally the economy of Latin America and the Caribbean grew by
some 1.5% in 2003 and is forecasted to grow to 3.5% in 2004. As a matter
of fact, 2004 projections register, the first year since 1997, that
there are no negative growth forecasts for any Latin American economy.
Despite this recovery in the region, experts insist that some 44.4% of
the population lives in poverty. Now on:
While the Central Bank, CSO, and the Ministry of Finance have attached
complete fiscal, monetary and economic tables, let us look at some basic
econometrics. Preliminary GDP estimates indicate a 4.9% GDP growth for
2003 driven by increased activities in the tourism, banana and shrimp
industries. With GDP growth for 2002 now confirmed at 4.3%, this means
that Belize’s economy has averaged 7% GDP growth over the last five
years with Prime Minister Musa’s economic management! No economy in the
region has achieved this! GDP at current market prices is at $2.0bn.
The Gross Official International Reserve position stood at US$84.6mn
at the end of 2003 covering over two months of imports.
Inflation that has averaged 1.1% over the past 5 years registered an
annualized November 2003 rate at 2.6%, as the impact of higher petroleum
prices affected all aspects of economic life internationally.
Real Sector Developments
Domestic exports were up by 21.5% in response to a combination of some
price improvements, expansion of regional sales, and exceptional surging
production. Leading the export rebound were marine products in
particular shrimp, banana, and sugar.
With a 4.6% increase in sugar export volume, revenues rose by 11.8% to
$73.7mn as prices strengthened in almost all markets. Sales within
CARICOM, where prices were more than double those on the world market,
expanded from 5,217 long tons in 2002 to 12,725 long tons in 2003. While
the appreciation of the Euro against the US dollar drove up the EU price
by US$0.03 per pound, the world sugar price remained practically
unchanged at US$0.06 per pound.
Marine exports rose by $40mn to $110.2mn as farmed shrimp rebounded from
the Taura virus and hurricane setbacks. The sluggish performance in
conch and lobster was more than offset by the near quadrupling in shrimp
production and its export sales. Timely stocking of ponds, pond
expansion and the use of a strain resistant to the Taura virus raised
shrimp production and exports. Shrimp exports were 16mn pounds at
$92.7mn or almost four times last years earnings, and indicators are for
a rebound in prices in 2004.
Extensive replanting of damaged plantations and investments aimed at
improving field irrigation and drainage resulted in banana exports of
74,935 metric tons valued at $52.6mn. This was almost double the volume
and revenue earned in the same period of the previous year when the
industry was still recovering from the effects of Hurricane Iris.
Exports reached some $78.6mn in 2003 although huge surplus stocks of
Brazilian orange juice pushed global prices downwards, despite a 9.0%
decline in US production.
The US market remained the major market (63.2%) for orange concentrate
followed by the Caribbean (29.2%) and Japan (7.5%).
Papaya exports increased to $16.6mn. Although production was up by
almost 50% the average price fell by 29.4% to BZ$0.48 per pound as
competition heated up from Brazil and Mexico.
Other Domestic Exports
The value of other domestic exports fell with much reduced exports of
fresh citrus but increased sales of black-eye peas and modest expansion
in veneer sheets/plywood and pepper sauce sales as well as increased
sales of other miscellaneous non-traditional products.
Agriculture for the local market had another year of significant
increase by some 20% placing more Belizean grown food on Belizean
With 10% growth in overnight and 80% growth in cruise arrivals,
developments in 2003 in the tourism industry were unprecedented.
Another terminal added to the Belize Tourism Village.
Consolidation works at the major archaeological sites.
Continued infrastructure development such as at Xunantunich, the
Northern and Western border facilities
Training of over 2,000 people in the industry
Upgraded tourism police unit including horse mounted police.
Commencement of the marine parade extension project to ease the traffic
Revision of cruise ship policy controlling the number of cruise ship
passengers to a maximum of 8,000 persons per day, the equivalent of 3-4
ships per day.
A commission launched to rationalize fees in the industry
The prospects for 2004 are also remarkable.
Construction of new cruise ship terminals
Upgrade of airport facilities
Cruise ship passengers projected to increase by 30%
Overnight arrivals projected to increase 4%-6%
As a government, we salute the thousands of men, women and youth who
have ignored the delirious outcries of those who only sulk and
criticize. We salute those who have gotten up early each morning to
continue building an even more diversified and efficient Belizean
economy as they provide more today than ever before for their loved
ones. Today we have with us The Presidents of the Corozal and Orange
Walk Cane Farmers Associations, Mr. Lisandro Murray and Mr. Arnulfo
Munoz, Mr. Mike Dunker and Mr. Alvin Henderson, representing the Shrimp
Association, Mrs. Bridget Cullerton and Mr. William Bowman representing
the Citrus Industry, Mr. Tony Zabaneh and Mr. Zaid Flores representing
the Banana Growers association, Mr. Enrique Carballo, a high tech papaya
grower working through DFC, Mr. Jose Marin, a well known tourism
operator and Mr. Luis Escobar a successful farmer, both share holders of
the Small Farmers and Business Bank, outstanding examples of the 3,000
more Belizeans who are shareholders and are making a difference. Also
representing the teachers, we have Mr. Anthony Fuentes. And thanks Mr.
Youth for the Future, Nuri Mohammed, for being with us. You all
represent the true Belizean heroes who have achieved this proud $2bn
new, revitalized and modern Belizean economy. Give them the recognition
they well deserve!
Based on preliminary figures for imports and exports the trade deficit
should increase by only $6mn for 2003 with the increase in imports led
by higher fuel prices and huge investments in EPZs.
ON MONETARY SECTOR DEVELOPMENTS
During the year, broad money (M2) expanded by 3.9% to $1.1 billion
driven mainly by a robust 14.2% growth in loans to the private sector.
Narrow money (M1) increased by $11mn driven mainly by an $8.0mn increase
in currency held by the public. In contrast, quasi-money rose sharply by
$34.7mn, as the $43.0mn increase in time deposits that was attributable
to business enterprises and individuals was partially offset by a slight
decline in regular savings deposits.
The weighted average interest rate spread accruing to commercial banks
declined markedly by 60 basis points to 9.4% (October 2003) reflecting a
20 basis points decline in the weighted average lending rate alongside a
40 basis points rise in the weighted average deposit rate. The weighted
average lending rate is now at 14.3% and the weighted average deposit
rate is at 4.9%.
Commercial bank Loans and Advances:
Expanded by $137.4mn (15%) to $1,041.9mn led by a $126.9mn rise in loans
to the private sector. Net credit to Central Government and other public
sector entities increased by $10.5mn. Private sector credit covered all
sectors of the economy, with the tertiary (transportation, distribution,
real-estate and tourism) and secondary (commercial construction and
utilities) sectors receiving $53.1mn and $48.1mn, respectively. The
former reflected increases for aviation transportation, tourism, and
distributive trade activities. The most significant loans to the
secondary sector went for commercial construction and utilities.
While by year end it had increased to $51mn, there was a $9.0mn decline
in excess statutory liquidity reflecting significant increases in
lending to the private sector, and proactive measures taken by the
Central Bank to balance portfolios. In contrast, primary liquidity
increased by $13.2mn with a $15.5mn rise in daily average holdings of
cash reserves relative to a $2.3mn increase in required cash reserves.
Public Sector External Debt
The public sector’s disbursed outstanding debt rose by $99.9mn with
disbursements of $163.1mn outweighing amortization payments of $66.3mn,
and valuation adjustments of $3mn. The Central Bank reports a total
public sector external debt of US$674.4mn of which Central Government’s
share is US$545.5mn or 56% of GDP. The domestic debt is at Bze.
Interest and other payments amounted to $61.5mn. The effects of the
debt refinancing will reduce debt service payments by US$22.5mn in 2004.
Also the UK government’s approval of Commonwealth Debt Initiative relief
allows some $5mn for our pro-poor strategies and recognizes our
seriousness about debt management. The Toledo Development Corporation
can now boast a 100% budget increase.
Over the past six years, we have been faced with the wreckage of the
UDP crashed economic train, hurricanes, 9/11 and global turmoil. Only
commitment to work, our manifesto as our political bible and calculated
risk management driven by bold and deliberate expansionary policy could
have grown a new, revitalized and modern Belizean economy. Today as we
celebrate remarkable accomplishments, as a part of rebalancing growth,
we must also share our experiences with others and take advantage of
their own responses to challenges. In order to broaden the management on
our Public sector debt, a broad based Debt Management Board co-chaired
by the Governor of the Central Bank and the Financial Secretary has been
established. This Board will also have the benefit of invited IDB
sponsored consultants to get the best unbiased opinions on specific
Belizeans can be assured that there is no debt service crisis, and
all the international financial agencies agree to that. As the tables
show, we have actually brought down our external debt service ratio from
15.3% to 12.2%. Our debt restructuring has not only proven international
investor confidence in this government’s debt management, but also
pushed some 70% of our debt amortization past 10 years! With this
government’s growth policies and intense debt and risk management, there
will never be a debt crisis! Yet we cannot speak of debt without
reporting on a:
DFC ADAPTING TO REBALANCE GROWTH
The most significant disbursement to Central Government came from the
Bear Stearns bond issue (US$100.0mn), which was used for the refinancing
of existing DFC debt.
The Development Finance Corporation (DFC) has been one of the primary
vehicles used to assist the government in carrying out its economic and
social mandate. Since 1998 the portfolio of the DFC has increased from
BZ$65m to BZ$327m in 2003. With over $600mn in assets, in order to
achieve its mandate, the DFC promoted development through the financing
of viable and environmentally sustainable projects in agriculture,
tourism, manufacturing, services, housing and education sectors.
Using various financial instruments such as securitization of its
mortgages on the regional and North American markets, bonds, etc., the
DFC was able to utilize its existing assets to acquire funds for further
lending. As DFC grew the economy of Belize grew consistently every year.
This translated into thousands of Belizeans getting opportunities that
they did not have prior to 1998. Financing was provided by DFC to every
sector of the economy especially when challenged by hurricanes. Hundreds
of Belizeans are studying today on special DFC loans. Over 13,000 loans
were disbursed by the DFC since 1998. The role of the DFC since 1998 has
ensured our economic renaissance.
With a refreshed banking community now involved in all sectors of the
economy, the DFC is being restructured to refocus on its core operations
and concentrate on the demands of the most needy areas of the society
that require urgent development. DFC’s debt has been restructured and
the successful liquidation of some of its assets is providing the
necessary funding to repay Central Government for restructuring costs
and meet future debt payments for the next five years. This will
significantly flatten our debt service curve and end once and for all
speculation about DFC’s debt. So now we turn to:
THE 2003/2004 FISCAL OUTTURN
From 1998 to this year, our government has spent some 1 billion Belize
dollars on capital projects from North to South, from East to West of
our great country. Roads, bridges, canals, schools, libraries, computer
centers, clinics, community centers, cultural centers, hurricane
shelters, playfields, rural water systems, public lighting and many
other infrastructural assets not there or in total disrepair in 1998 are
now a part of the modern Belize in which we are so proud.
On recurrent expenditure, since 1998, we have also kept our promises
to public officers and restored many benefits robbed by the UDP, and
this year we completed the first year of a three year salary increase
that provides yearly increases of 5 to 8% with 8% for the most. We have
not retrenched! Retrenchment is not the PUP way! In fact today
government has over 7,000 established and un-established staff, not to
mention thousands of teachers, on the payroll. We have produced
government’s financial statements, ignored since 1978, right up to 1998,
and today the Auditor General has in hand statements bringing us up to
2002-a remarkable accomplishment by any standards but particularly for a
government with tremendous challenges!
Still on recurrent expenditure, in 1998, we spent $61mn on Education
and $24.7mn on Health. This year we spent over 50% more with $94.1mn on
Education and $41.7mn on Health. This government has put the money where
it is most needed! No government has ever increased the stock of public
housing as this one has! No government in our history has had to rebuild
after four storms in as many years! Recovery has been so remarkable that
many have forgotten the trauma!
Still on recurrent expenditure, we have practically computerized all
government accounting including payroll. Today’s estimates reflect full
computerization including a summary page which meets international
standards and an obvious change from the past. We are now moving toward
an electronic Treasury in 2004. Yes, payments and collections will be
done electronically, to and from your living room or your office!
Collections and payments previously dispersed over relevant departments
will be brought together to one point at electronic treasuries
nationwide hooked to electronic banking and Government’s computer
center. This is a good example of the modern government that we are
creating for better efficiency, the best customer service and real time
financial updates. In the future electronic processing with the push of
a button will ensure that we no longer have to wait years for financial
statements. And no, the treasury staff will not be retrenched, some will
be re-deployed, re-trained, if necessary, to do more productive and less
repetitive work, increasing their employment values tremendously and
providing more efficient service to the tax payer who is becoming more
and more aware of his or her purchasing power and its accompanying
The working Belizean has no time for discourteous or arrogant
bureaucratic attitude! Our government knows this, and the serious public
officer knows this! A good example has been the management and staff of
the once Printing Department who said “unshackle us from government
bureaucracy. Give us a chance, and we will not only provide a better
service for the public sector, but we will compete with the private
sector”. Our government provided them with the opportunity by
transferring the asset as equity in the DFC, and the DFC gave them a
loan based on the revenue stream potential of the assets. A win/win
situation for government, staff and taxpayer, by producing a fixed cost
for specific services, a reduced bureaucracy, and Belizeans taking
control of their own destiny. However this simple common sense
initiative has been opposed by those who fought against Independence,
ridiculed the vision of Belmopan, cried out when the old central market
was torn down to be replaced by a modern structure, joined economic
saboteurs to stop hydroelectricity and even today are impervious to the
new realities of the marketplace.
Despite these doom and gloom Cassandras, we have ended our first year
of fiscal consolidation so close to that budgeted that even the most
warped cynics will have difficulty complaining.
Recurrent revenue estimated at $443.1mn is projected, based on
December figures, to conservatively produce $448.4mn. Recurrent
expenditure consumes this gain however, with the increase of fuel
prices, costs of debt restructuring and taking on more street lighting
and other utility services reaching $385.3mn or some $5.4mn above
budget. As per international standards this expenditure does not include
amortization which is accepted as a financing item below the line and
amounted to $43mn of our debt paid off.
Capital 2 or domestic capital expenditure is being contained to
$58.9mn against $60.8 budgeted. Capital 3 or foreign funded capital
projects will end up at $80.3mn against $77.3mn budgeted. Capital
revenue and grants are expected to reach $43.5mn.
Indexed Environmental Receipts met budget expectations at some
This all calculates to a recurrent surplus of $63.1mn and an overall
deficit of $32.5mn comparing well to a budgeted overall deficit of
$34.4mn. Calculated against GDP, this translates to a 2.14% overall
deficit well within our target of staying below 3% of GDP. In other
words Madam Speaker, the Prime Minister’s budget 2003/2004 has been
executed with its expected positive results for the health of Belize’s
fiscal position! We thank the public service and all Belizeans for
working with us to accomplish what some have declared as the impossible.
THE NEW BUDGET 2004/2005
Madam Speaker, for the new budget for 2004/2005, we have tried to build
from the experiences of the past while listening keenly to the needs of
all Belizeans from the largest corporation, to the hardest worker and
even to those who are not fortunate enough today to help themselves. We
are thankful for the confidence of the productive sector that has toiled
with us through tax reform to improving all factors of production,
creating one of the best business enabling environment in the developing
world. We continue to seek the distribution sector’s full cooperation to
play their proper and responsible role as their behavior can afford the
humblest among us the best opportunities or obstruct the inter-
dependent cycle of Belize’s economics as determined by production costs,
distribution margins and consumption capacity.
So this budget seeks to continue carefully stimulating efficient
growth while performing a rebalancing of our economy to ensure that this
growth works to make affordable even the new basic necessities
particularly benefiting low income Belizeans. These estimates take into
account rebalancing of some fiscal measures to fine tune our tax reform.
This program started in 1999 to accomplish this, and to build a more
shockproof economy; an economy more able to withstand external shocks
and those of nature, but more importantly an economy where we will never
have to suffer the shocks of social unrest because of an economic gap
that society cannot tolerate.
Based on this year’s performance, the new rebalancing measures and
conservatively projected growth of 4%, we have estimated some $491.3mn
in recurrent revenue and $424.4mn in recurrent expenditure. This should
provide a recurrent surplus of $66.9mn.
Capital 2 expenditure will be held to $52.3mn and capital 3
expenditure to $70.3mn with some $22mn in capital revenue and grants.
Amortization payments are projected at $47.5mn. Indexed Environmental
receipts are estimated at $7mn. This should leave us with an overall
deficit of just under 2% of GDP staying within our target of below 3% of
GDP. To accomplish this we now turn to:
REBALANCING FISCAL MEASURES & first
Commencing immediately, we intend to use the benefits from
computerization and broad based consultation to rationalize the entire
government’s vehicle fleet to standardize, eliminate waste and establish
tight mechanically driven controls. SUV’s not needed will be converted
to economical diesel fueled cars. Large inefficient pick-ups will be
similarly replaced by smaller diesel units, and vehicles being used to
drive around the corner to the office but busy at nights or on the
weekends for leisure will end up on the auction block.
Similarly with electronic records in hand, a Management Audit Team
will carefully analyze and propose remodeling the public service in full
consultation with the PSU to ensure that all are at productive work,
properly prepared and knowing where they will be going next-based on
performance. There will be no retrenchment! Now turning to:
REBALANCING TAX MEASURES
First in an effort to close loopholes the Office of Revenue in the
Ministry of Finance has recommended the following amendments to the tax
Amend Section 108(1) (a) to remove profession or vocation from this
subsection and give it its own subsection with a threshold of $20,000.00
Amend Section 108(1) (b) in respect of rental receipts and insert a
threshold of $800.00 per month.
Add a penalty of 10% for non-compliance of Section 112 (withholding tax
on gross contract payments).
Increase the rate of business tax on rental of property from 1.25% to 3%
on rentals over $800.00 per month.
Apply a withholding tax on winnings from slot machines and table games
of 15% on winnings in excess of $1,000.
Amend the act so that in cases where a taxpayer has income from more
than one source, the tax should be paid on the gross at the respective
rate for each class of income, provided the aggregate gross income
exceeds $20,000 in the year or $1,666.67 per month.
Administer EPZ legislation to the letter disallowing any exemptions on
fuel not used for energy generation or vehicles not directly involved
And last amend the Income Tax act for better tax administration as it
relates to Real Estate agents, placing the burden of payments on the
agent, and providing for special fines and penalties for violation.
While we live in a new, revitalized and modern economy, many look on
unable to feel the new day because the new way demands new basic
necessities to truly participate in our new society. In the past we have
removed import duties and taxes from most basic items ranging from basic
food items to electricity, water, stoves, fridges and even computers.
The efforts of this government, providing new jobs and generating more
credit through the DFC, the Small Farmers and Business Bank, lower
interest rates, Youth for the Future, the Renewed Marketing Board and
general economic growth have afforded most Belizeans these past staples
then considered as basics. But today how can a Belizean explore the
changing world if that Belizean cannot afford a computer. Long ago we
removed duties from computers. In some cases such as fridges and stoves,
we took away the import duties but sales taxes still apply.
In order to have these new basics reach all Belizeans we will now
remove import duties from a few last staples still paying duties- tea,
salt, yeast, baking powder, and toothpaste. Today we also remove import
duties from some new basic necessities- smoothing irons, metal buckets,
pampers, marley, linoleum, small table and floor fans, house hold
telephones, and scooters (50cc and smaller). In most cases these items
carried a 20% rate of import duty.
Recently we removed all duties on blank Cds for recording local music
on the recommendation of the Ministry of Culture, and today we continue
to keep our commitment to advancing culture in Belize by now removing
duties on all musical instruments and accessories, and all recorded
music products including CDs, gramophone records, cassettes, DVD-Audio
and Music videocassettes.
We are also removing sales tax from refrigerators (15cuft. and less)
and gas stoves (regular 30” and less). These measures will save
Belizeans hard earned money every week spent on basic items like tea and
toothpaste and big bucks on items like fans and scooters. What is sure,
is that now, we even have most modern basic necessities free of duties
and many free of taxes and for the most part have saved Belizeans some
20% on their costs.
In rebalancing to stay fiscally responsible and share the costs of
our new more shockproof economy and society, today we will increase
sales tax on all of the other goods and services except for
telecommunications by 1%, and the following items will join fuel,
alcohol, and tobacco at the higher rate of sales tax: telephones
(non-household), large fans, scooters (over 50cc), refrigerators (over
15cuft.), and stoves (other than the regular domestic gas stove).
But with all this, we are well aware that some, on the Southside of
Belize City and in the far flung villages of Toledo and South Stann
Creek, do not yet have the purchasing power to take advantage of this
rebalancing so we go even further. We must also:
REBALANCE POTENTIAL ECONOMIC GENERATORS
We have recently signaled cruise ship and tourism entities in general
that if they make significant investments in these areas, they will be
afforded EPZ status. And in the case of investments which will employ
thousands directly and indirectly, we will even consider exclusivity
tied to long term expansion commitments and subject to our laws. In the
special case of Belize City, we are so determined to develop the
Southside while maintaining our legal commitments, that we are offering
special incentives in line with responsible business plans to those
concerned in order to build the new Cruise Ship Terminals-both at Stake
Bank and the Port Of Belize. Our goal also includes operations at Stann
Creek and Toledo.
Additionally those who have fiscal incentives today are being asked
to include cut flowers and live local entertainment in their business
plans, and future incentives will include these as conditions. This
should expand greatly the market for Belizeans of humble means who can
plant flowers after training in their back yards, and many more who are
So that unemployed residents in that area can grasp the
opportunities, we are budgeting two million more for the Small Farmers
and Business Bank for this specific purpose and working in collaboration
with the Toledo Development Corporation, Youth for the Future, and the
Employment Agency. The Ministry of Tourism & Investment will also be
gearing up special programs for training and interfacing existing
services. For the South there will be added incentives for development.
Today, the Deputy PM will also present amendments to the Land Tax Act
which pays special attention to encouraging ownership and development of
land in the South. While not increasing the tax rate in the country, we
will ensure that those who own small properties and less than 30 acres
pay only a token land tax while those who own larger properties will no
longer have to seek out the Department to find out what they owe or to
pay land taxes. The valuation process will be simplified by a modern and
just system of land “declared unimproved values” categorized by economic
location and use. The collection method will also be mechanized placing
the onus for payment on the owner, increasing penalties and the statute
of limitations. On consultation, most land owners, including large
owners, agree that a fixed system which allows for proper budgeting and
the relief of proper process, will improve our enabling environment.
Again here we are not increasing the tax rate, but we are rebalancing.
We are making sure that Belizeans, who can, pay, and those that need
time to grow economically are relieved.
The Deputy PM will also introduce amendments to the Land Tax act to
ensure collection of Speculation Tax by placing the burden of payment on
the owner and increasing fines and penalties. Speculation tax of course
only applies to property over 300 acres by accumulated ownership where
no productive use is being made of that land.
Lastly we will present amendments today which will be:
REBALANCING MONETARY POLICY
Amending the EPZ Act to disallow transactions in Belize Dollars and
increasing the fines and penalties for violations, and,
Amending the Casa de Cambio legislation to tighten up on reporting
requirements and increasing fines and penalties for violations in
general. But we must also be:
REBALANCING SECURITY MEASURES
Even the new more empowered society that we are creating must be
concerned about security. In 1998 we inherited a neglected and
demoralized security system. Since then we concluded and implemented a
complete Strategic Security Review. Today our police and BDF are better
equipped than ever before, and wide public consultations are followed up
by action with legislative changes, neighborhood watch, the 922 system,
cash for information and many other programs.
Internationally, we have seen a new defiance by a small minority of
criminals who unfortunately lead a larger group of young followers down
the wrong path. While Belize has been fortunate in that violence here
has not near reached the levels in nations around us, we have been
challenged. We met this challenge after many attempts by several
governments to negotiate order failed. We applied a determined proactive
and muscular strategy which targeted the known leaders who were
influencing our youth to mimic the worst of today’s ubiquitous TV
violence. We also put more and better trained police on the streets.
Police training today includes from gender awareness to the most
sophisticated of Forensic Science. As a result crime statistics have
gone down dramatically, but policemen have been injured and in some
cases killed. The most notorious of criminals have either left this
world, this country, are in jail or hiding. Most crimes of violence
today are of passion or related to burglary. Some say we have gone very
far, and some streets are terrified. Some would have us be even more
Today for a period of one month, we reopen conversation with these
young people at risk. Our community policing will reach out and test
their readiness to re enter society. Their response must be clear and
sincere backed by turning in weapons, sharing information and taking up
gainful employment. The Youth for the Future, Employment Agency and
Small Farmers and Business bank team will work with the police. This
rebalancing of security must not be misunderstood as a sign of weakness.
To continue, it must be visibly successful in 30 days. It was not I who
said that “freedom is not an issue until order is restored”, but we hear
clearly the mandate that we have from the Belizean people.
At the same time our refurbished prison now run by the Kolbe
Foundation, working closely with us, offers real rehabilitation
opportunities. On Immigration, we now have public ceremonies and soon
will have civics test to avoid any of the friction of the past. And if
we needed any further proof that we have also been dealing with the
causes of some crime, we now report on:
BELIZE SOCIAL SECURITY REBALANCING SOCIETY
In 1998 when we first came to government there were 55,134 insured
working Belizeans getting some $11.6mn in benefits for that year. We are
happy to report that at the end of 2003 some 71,260 were insured
receiving some $25mn in benefits, and this does not include the NHI
benefits enjoyed by residents of the Southside of Belize District. In
other words this government’s policies have provided at least 30% more
formal jobs since 1998 and probably as many informal opportunities. At
the same time those who need it most have received more than double the
benefits that they received in 1998. Additionally some 2,000 Belizeans
over 65 years, with no other means of income, have already received some
$1.3mn and 1,000 more applicants are being processed through the
committee headed by Canon Flowers. Also in 1998 Social Security’s assets
were at $192mn. Today they are over $286mn. Almost $100mn more working
to defend the needy when necessary. We are indeed rebalancing our
economy to work more for those who most need it. As a matter of fact
with today’s rebalancing measures, Prime Minister Said Musa’s government
A SPECIAL AND DELIBERATE SOCIAL SAFETY NET
This special social safety net deliberately carved out within Belize’s
national economy serves Belizeans who now earn $20,000 and less per
annum, own a humble lot and home or less than 30 acres of land in rural
areas, have average stoves, fridges, phones, fans, smoothing irons,
scooters, electricity, water and all the basic food, medicines and
necessities for decent living. These precious Belizeans have one thing
in common. These Belizeans can afford these new necessities because they
pay almost no taxes. These Belizeans join the benefits from our
successes, because of rebalanced economic growth, by a government and
the more fortunate among us, who understand that this is what a new,
revitalized, and modern economy demands. And by doing this, we forge
real hope for these Belizeans that with this social safety net created
is a ladder of opportunity for them to climb toward more prosperity. But
there are many:
MORE BENEFITS FROM REBALANCING GROWTH
While the Prime Minister will elaborate on the array of new and
continuing projects which will keep building our new, modern and
revitalized Belizean economy, we cannot leave out the huge investments
being made in good governance. These include more investments in the
Judiciary, a new San Pedro Court, expanded Contractor General and
Ombudsman offices, the new Governance Improvement Board, a Management
Audit, completed Financial Statements right up to 2002, funded
constituency offices for all 29 divisions, much better salaries for
members of the national assembly and the list goes on and on. We are all
REBALANCING GROWTH TO WORK FOR ALL BELIZEANS
We appeal to all Belizeans especially those on the other side to join in
and be a part of Belize’s new, revitalized, and modern Belizean economy.
We can meet the tide of free trade and globalization if we know where we
are going. Globalization has been defined by intellectuals as the “Death
of Distance”. We cannot empower our economy to compete globally without
cranking up our efficiencies on all the factors of production and
marketing. As global competition touch us, some workers may feel
threatened by these forces and need to know exactly how they will
benefit. We believe that Belize can be a competitive and lean economic
generator without being mean. All Belizeans must have education, good
health, a home, adequate transport and the new basic necessities. The
only way we can do this is to rebalance our growth to work for all
We also appeal to those Belizeans who will be assisting with this
rebalancing to understand that there is a cost for everything including
our special enabling environment moving toward a more shockproof
economy. These are the Belizeans who have excelled by grasping the
opportunities from our new, revitalized and modern economy.
Even the IMF’s Mr. Horst Kohler speaking on the “Social Dimensions of
Globalization” recently said: “Experience has shown, most recently in
Latin America, that social equity is a crucial pillar of political
stability and a sustained good investment climate. Social contracts
differ across countries. However, we should reflect whether and how John
Rawl’s “Difference Principle” in conceiving of a fair and just
society-“tolerate inequalities only when they benefit the least
well-off”, can be used in international policy development.”
WE HAVE COME A LONG WAY!
In 1998 there was no confidence in our economy. Growth hardly passed 1%,
and our recurrent account was in deficit. Yet the UDP had just
retrenched almost 1,000 public officers and at Christmas time. Still we
were paying a 15% VAT and even our savings were being taxed. The streets
of Belize were owned by gangs. Today we see a new Belize all around us.
No one can deny this. We are waging a real war against poverty,
ignorance and HIV/Aids. The police and the communities are taking back
the streets. After average growth of 7% over five years, we have a $2bn
economy. Public Officers are involved and better paid. Belizeans have
real opportunities and are engaged, and our Ministry of Investments is
kept busy by new investors all bullish on this new Belize. Since 1998
over 200 new ventures have been processed creating thousands of jobs.
Goods and services once obtained only by getting on a plane are now
around the corner. And this year with $127mn being spent on Education
and $57mn on Health, Belizeans have access to education and health like
never before. Thousands more Belizeans own their own homes, and after
today with this rebalancing of growth, thousands more will be able to
afford more of the new basic necessities. Our Belizean economy must work
for all Belizeans! All Belizeans must have real hope for meaningful
employment. We will not rest, until all Belizeans are working. “By the
might of truth and the grace of God”, we have come a long way! There can
be no turning back!