Last Friday, the Prime Minster of Belize, Honorable Dean Barrow made his second budget presentation since taking office in 2008. Before tabling his budget for fiscal year 2009-2010, PM Barrow explained that despite the many difficulties faced by the international financial crisis; the 2008-2009 budget has exceeded expectations and that this year his UDP lead government is bound for a fruitful year.
PM Barrow first explained that the Statistical Institute of Belize reported that the economy grew by 3.8% during 2008. But while the economy grew, PM Barrow also pointed out the shortfall faced during his first year in government. PM Barrow explained that there was a reduction in the unemployment rate to 8.1% from 8.5% in 2007 citing that it can be attributed to all the infrastructure jobs that were created. The PM stated that growth in consumer price contributed to an inflation rate of 6.4% from 2.3% in 2007. While the PM reported that generally citrus and banana saw a slight growth, annual papaya production was down 12.7% to 63.7 million pounds. The 2007/2008 sugarcane deliveries declined by 18.4% to 980,114 long tons, compared to the 2006/2007 crop. PM Barrow attributed those shortfalls as a result of tropical storm Arthur and the froghopper infestation faced by the cane farmers. The fall in sugar output to 78,235 long tons, the lowest output in the last twelve years, was even sharper at 19.5% due to a 2.9% worsening in the cane/sugar ratio, meaning of course that more sugarcane was required to produce a ton of sugar.
But those were not the only figures that were bad news; PM Barrow went on to explain that this year was not good for tourism. “Tourist arrivals declined as stay-over visitors fell for the first time in 12 years with a 2.4% decrease to 236,926 persons, and the number of cruise ship disembarkations also fell for a fourth consecutive year, with a 4.1% reduction,” stated PM Barrow adding that it is a direct result of the global recession.
But while the global economic downturn will continue to affect some sectors like tourism and the international prices for Belize’s exports, the Statistical Institute of Belize is still projecting G.D.P. growth to be between 2.5% and 3.0% for 2009.
But PM Barrow made firm on his commitment to “a better way,” stating that he will address areas of priority. “Government is holding high its commitment to the education, health, social and physical wellbeing of the Belizean public. To this end, we are allocating additional budget expenditures to those priority areas of education, health, food security and the physical infrastructure,” outlined the PM.
And how does the government plan to make good on their commitment? The PM stated that a part of it will come from Tax payers in the $1.00 increase at the fuel pump. “There has been as long a spell of incredibly low pump prices as we could possibly have managed. I also note that the increase we are proposing is only $1.00 per gallon on gasoline and diesel. This amounts to less than one half of the taxes that were removed over the last year. It will still keep diesel at below the $6.00 per gallon mark. This single step will yield thirty million dollars and that took us half way to closing the financing gap. Government’s economic diplomacy did the rest and we are now, so to speak, home free,” announced the Prime Minister. The economic government diplomacy that the PM was referring to came from a number of sources, stated the PM, “This financing requirement will be met from the following already secured sources of financing: 1) Draw downs of approximately US$28.8 million in project related loans already committed for the Capital III Program. 2) Drawdown of US$7.5 million from a new IDB Social-Fiscal Policy Based Loan. 3) A drawdown of US$20 million from a new Republic of China (ROC) Budget Support Loan, and 4) a moderate amount of domestic financing equivalent to US$5.2 million drawn from balances in the Petrocaribe Fund.”
For 2009-2010 the Prime Minister is budgeting over eight hundred and seven million dollars in revenues and grants, with eight hundred and fifty-nine million in expenditures. Her Majesty’s Loyal Opposition, People’s United Party will get a chance to debate the budget on March 19th.