No knowledge of the Basics of Investment: Is the UDP Ignorant or just plain stupid

Contrary to popular belief, economies are not backed by gold reserves locked away in a vault at Fort Knox. Maybe some in this government believe that we have large gold deposits hidden somewhere, but those of us who have some understanding how an economy operates knows that it is all about building trust and confidence. If the people in the government understood this, then they would not be leaking confidential banking information to the irresponsible buffoons over at Wave and the Guardian.

The Importance of Belizean Investors

Too often, we as Belizeans complain that there are too many foreigners taking over our country! However, whenever there is a Belizean who is smart-enough, brave-enough, or experienced-enough to invest in Belize, some in our society, especially within this government seem to pray that these people fail. From afar, this looks to be the position that the media organs of this present government have embraced. I guess they really do not understand the potential repercussions of their actions.

Mr. Emory King used to say: “If you want to make a million dollars in Belize, you must invest ten million.” Becoming successful in business in Belize is no easy task, especially if you are competing in an industry that has foreign competition or if you are affiliated with the PUP when in opposition.

The reality is that there is no such thing as cheap capital in Belize. While foreign investors have access to cheap credit, Belizean investors are saddled with huge bank payments that range from fifteen to twenty percent. Belizean investors also have to worry about fending off the sharks from the political arena. The truth is if you are a local  investor, especially one affiliated with the PUP, you are as good as f_@*!d! That is just the cold, harsh reality of life and business in Belize today. For that reason, I have hope that our Party will unite sooner rather than later! But that discussion if for another time!

From my perspective, local investment is as or may be more important than that of money coming from abroad. Firstly, most of the money earned in Belize from local businesses stay here and is not repatriated. Secondly, the government does not have to worry about bending over and granting all sorts of fiscal incentives. And lastly, Belizean owners tend to treat their workers with more respect and regard compared to most foreign investors. Now do not get me wrong, I am not against foreign investors, there is a place for them in our economy as well.

The Roles of Banks in Our Economy

Research shows that there is a direct relationship between the performance of the banking industry and that of the economy.  There is enough evidence to support that whenever there are fluctuations in bank credit there are fluctuations in economic activity. There is also evidence that underscores the fact that bank asset holdings adjust before changes in economic activity and that the banking system’s security-to-asset ratio strongly predicts economic growth. By analyzing the terms of bank lending over the business cycle, it has been proven that variations in lending terms are consistent with the argument that restrictions on bank credit adversely affect the economy.

Trust and confidence are the socio-psychological attributes that everyone considers to be essential to get the local economy going. How do you build them if the population does not have confidence in our government? The reality is that no confidence building can take place without political and economic leaders basing their policies on equity and sustainability. People have to see and experience fairness. They have to see and experience social, economic and ecological sustainability rather than some short-term measures and rhetoric.

I cannot express my disappointment in the Prime Minister for allowing his people to vilify hardworking Belizean investors who have had the courage to invest major money into our country. To tell you the truth, it is a damn shame!!!

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