In 2004 the WTO as part of its mandate and as a requirement of member countries undertook to review Belize’s trade policy regime.  Their observations noted the significant steps Belize had made in liberalizing various aspects of its trade regime whilst also seeking to protect selected domestic industries.  Belize as a small middle income developing country has an open economy that is characterized by an export mix that consist of both tourism services along with a few basket of commodities and other goods.  Trade plays an important role in the economy as trade to GDP ratio has consistently increased to above 120% of GDP.  This therefore, means that most of what the economy produces is for an export market.  This would therefore, expect one to conclude that because trade is so vital to the economy’s existence, that trade policy supported by an investment policy would also be deemed important by the government.  However, the level of attention and public information coming from the Ministry of Foreign Trade and the Belize Trade and Investment Development Service (BELTRAIDE) has been rather dismal.   There is the need for systematic emphasis on the development of quality and standards of products and a phased approach to protectionism that will enable quality product to be provided to both the domestic and international market.

Belize as a member of CARICOM ought to be actively engaging in bilateral and regional trade negotiations with Canada and the USA under the US-Caribbean Basin Trade Partnership Act (CBTPA).  Full implementation and market access arrangements under the Economic Partnership Agreement (EPA) between Caribbean Forum countries (CARIFORUM) and the European Union (EU) ought to be made available to the business community so that firms are made well aware of the market access arrangements that they can avail themselves of and any accompanying assistances. As a member of the WTO Belize can continue to take steps to liberalize its trade in services and increase the benefits to be derived from such engagement.   Various service sectors are already engaged in international trade, outlining and creating a road map is not the paramount required at this point, but rather the supporting policies included alongside capacity development and training so that the engagement in developing meaningful roadmaps would be assured so that service providers benefit from the market access already negotiated.  The WTO noted in its recent assessment of trade development globally, that in keeping trade open has been and remains crucial in providing opportunities for countries to emerge from the global crisis, in particular at times when public deficits are growing for many.  The Government of Belize seems to not have realized the importance of trade policy and a complimentary investment regime that would allow for Belize to strengthen its competitiveness as she continues to engage in the global economy.  As we enter the second half of 2010 the WTO is once again scheduled to undertaken their second Trade Policy Review, it would be interesting to note the progress made to date.  Over the past two years, the reactionary response by Government to domestic issues and no meaningful policy response to the global recession have left the Belizean economy just hanging by a tread.   The business of a political party winning an election could never be an end to itself.  The responsibility of governance is a whole other level and it certainly involves giving Belizean citizens, private and corporate a fighting chance to compete to survive in a globalized world.

Gwyneth Sydney Nah

Comments welcomed at GwynethNah@gmail.com

Positive recorded economic growth must be carefully examined within the broader context of a country’s overall state of wellbeing within the economy and its people.  Any country that has the required legal and regulatory framework that allows for freedom of economic enterprise can experience natural economic growth, but not necessarily economic development.  Development that is sustainable is characterized by a fundamental improvement in people’s livelihood and economic, political, and social wellbeing, which is assessed through the use of various indicators such as the human development index (HDI), poverty assessment and equality in addition to GDP.  Therefore in reviewing GDP performance one must not lose sight of the big picture, that Belizeans continue to find it difficult to find jobs, businesses are closing and cutting staff and crime has taken the society hostage.  Also, the predictability of future economic performance cannot always be easily made, when countries like Belize are susceptible to exogenous shocks that can negatively impact on its economy.

GDP as previously defined in this column, is the main measurement of economic activity within an economy.  It measures the real value of output produced, by all economic activity carried out within a country regardless of ownership (domestic or foreign) and it is calculated without subtracting any allowances for capital formation, which is the addition of plant and equipment within firms.  For comparative purposes constant prices are used which are prices that are adjusted for inflation using a reference year as a benchmark.  As all economist would note, GDP is a measurement with its own shortcomings as it fails to take account of several areas such as services provided by homemakers and the value of transactions individuals would do for themselves; under-ground or illegal activity are not recorded; improvement in quality of output; the social cost of negative by-products and their effect on the environment and lastly GDP fails to measure any changes in wellbeing or standard of living.  As most Belizeans can attest to, recordings of positive economic growth does not necessarily relates to a positive impact on the 43% of the population classified as poor or vulnerable to poverty.   For comparative purposes and to determine changes in GDP, a review is undertaken of the value of output for the same period in year 1 and year 2.  Therefore, for us to understand the performance or change in GDP for 1^st quarter 2010 it is compared to 1^st quarter 2009, with the change recorded as either positive or negative.  However, at times it is important to assess GDP performance from one quarter to the other consecutively.

Overall, the 1^st quarter of 2010 recorded positive economic growth of 3.5%.   On the surface this is a feather in GOB’s cap, however Belizeans need to be weary of placing much confidence and hope in any sustained recovery.  The nature and structure of economic activity in Belize, from the major economic sectors such as agriculture and tourism, shows the first half of the year as the period where output is the highest, this is due to seasonality.  Historical data on GDP does support this assertion as well, with output being less in the second half of the year.

Table 1

^{Source: Statistical Institute of Belize}

As can be noted in table 1 the value of output from all sectors increased positively when compared to last year, although the majority of those increases were below 5% with the exception of government services, hotels and restaurants, construction and manufacturing.  The fishing sector is the only one that recorded a significant decline of 33.3%.  Overall output was driven by the performance of the manufacturing sector, which recorded growth of 9% due in part to increased petroleum production.  The continuous expansion of the oil sector brings to bear the need for Government to have adequate regulatory policies in place that will ensure the levels of transparency in drilling operations and adherence to sustainable practices that will not jeopardize the environment.   The hotel and restaurant sector recorded an 8.4% increase from last year.  This is due to some increases in cruise tourist arrivals and overnight arrivals this year.   An important observation is the rather small increase in taxes on products, which only increased by 1.3%.  This is a direct result of total products actually being consumed or purchased not increasing significantly.  It will be interesting to review the output from taxes in the 2^nd quarter of 2010 since this would capture the period which the increase in GST was instituted.

As the data verifies and Government is quick to take credit for the positive growth recorded for the 1^st quarter, Belizeans must be mindful that economic recovery remains tenuous, as this is due to all the challenges noted in last weeks’ issue that examined the global context and the IMF’s observation of Belize’s economy.  The risk to several sectors remains acute with the increase escalation of crime in Belize; the tourism sector can expect some negative effects with reduced arrivals on shore.  The commodity sectors such as sugar, bananas and citrus will be vulnerable to global shocks compounded with domestic management and regulatory challenges.   In the case of sugar, the current management issues and fragmentation of sugar cane farmers, continue to result in reduced sugar cane production.   Thus, the challenges of development continue to remain pertinent and ought to be reflected in Government’s economic policy formulation and response.  For it is important to distinguish that economic growth is not synonymous with economic development.  Belizeans continue to face the many challenges of low employment levels, rising cost of living and an increasing threat to their personal security.  Consequently, Government must address meaningfully Belize’s prospects for sustained economic growth that will result in an improved quality of life for all Belizeans, not just the choice few that continue to benefit.

Gwyneth Sydney Nah

Comments welcome at GwynethNah@gmail.com

Economic activity when previously assessed was noted to be poor with negative growth recorded for 3 consecutive quarters with some positive improvement noted in the fourth quarter of 2009.  The IMF concurred in their observation that inflation is on the increase due to increased fuel prices.  For 2010 the IMF is projecting some modest level of economic growth due in part to some slight recovery in export prices of commodities alongside some tourism receipts.  They also noted in their consultations that despite the recent tax revenue adjustment with the increase in GST to 12.5% this would not be sufficient to bridge government’s fiscal deficit for FY 2010/11, but instead that gap is expected to widen.  Government continues to maintain current expenditures without any evidence of cutbacks; while the public debt continues to remain high.  The IMF further noted in their preliminary statement that the banking sector appears very liquid but their concerns were registered for the high levels of nonperforming loans.  This observation was substantiated by this columnist review of the banks’ performance as at the end of March 2010, which recorded that the Heritage Bank Ltd and Belize Bank Ltd both had adversely classified loans as a percentage of total loans in excess of 28% of their loan portfolios.  The IMF advised Central Bank to be vigilant in its supervision of both domestic and offshore banks to ensure that there are sufficient loan loss provisions to cover nonperforming loans.  An elaboration of the IMF’s observation on their mission to Belize and clear recommendations to ensure sustainable economic recovery would be outlined when their Article IV consultation report is completed in a few months.  Thereafter further assessment could be conducted on specific recommendation put forward to government.

The IMF as part of its annual research and economic forecasting produces a regional economic outlook for the western hemisphere, the most recent being published in May 2010.  A review of their projections for Belize’s economic performance is dismal as all projections for 2010 into 2011 is that the global shocks will persist resulting on low growth performance.  The IMF in their analysis of regional economies classifies Belize as a tourism intensive commodity importing country.  This is due to the fact that tourism revenue is an important component of GDP along with the economy being further characterized by a high external debt burden and limited integration with external financial markets.   This characterization puts Belize alongside other CARICOM countries such as The Bahamas, Jamaica, Barbados and Grenada among others.  All indication for the remainder of 2010 is that these economies are expected to perform worst than other economies in the Americas.  This is due to the fact that weak employment and labour market performance in the developed economies are directly linked to tourism arrivals in the Caribbean, which has experienced continuous decline.  In addition to low levels of revenue from tourism, the elevation in commodity prices will weigh negatively on these economies.  The fact that Belize among other CARICOM countries has an extremely high external debt limits the ability for governments to have implemented any sustained or meaningful fiscal stimulus, so the effects of such policy options were never forthcoming, as is evident in Belize.

The dilemma for Belize and the current government is how best to develop and implement economic policies to ensure economic growth in the face of prolonged recessionary conditions.  The recovery of the tourism sector will be slow in coming and will required some targeted efforts by government to market Belize as a choice destination.  The current level of external debt makes access to external financing rather limited.  So with limited borrowing opportunities and government increased levels of domestic debt that has been assumed over the recent years due to significant legal judgments against the government, the question is where will fiscal support come from.  Government will be forced to reassess current expenditures to guarantee value for money spent, so that it contributes to increased productivity.  This position also extends to the Social Security Board.  The state pension fund makes a notable contribution to GDP, but its investment portfolio did not reflected any meaningful growth for 2009.    The question is asked where is the people’s money going.  This writer opines that the expectation is that SSB funds are being earmarked for investment in Belize Telemedia Ltd; however such an investment would not fit the risk profile for a pension fund.  The IMF in their forecast challenges governments of the Caribbean and this writer concurs that government must be able to devise the necessary economic policies that will allow for the economy to weather the storm of recession that continues to blow.  While the grass grows, the cows starve and Belizeans are in need of a better possibility because people’s livelihoods remain at stake.

Gwyneth Sydney Nah

Comments welcome at GwynethNah@gmail.com

In 1998 subsequent to hurricane Mitch, the Government of the day saw the need to invest in infrastructure and institutional capacity to address hurricane preparedness which resulted in an investment of some US$32M.  That ambitious undertaking by Government resulted in several notable accomplishments; the construction of regional hurricane shelters, retrofitting of some 250 existing shelters; drainage infrastructure in Belize City; and most importantly the institutional strengthening of the NEMO.  In 2006 a national hazard mitigation plan was developed that sets out a series of strategic interventions and actions necessary to enable Belize to mitigate against the devastating effects of disasters.  The main goal of reducing risk of disasters was clearly identified as the need to integrate hazard risk reduction into national development plans.  The plan speaks to several areas where such intervention and integration would be required to address natural disasters such as effects of climate change, hurricanes, earthquakes, flooding; and technological hazards or man-made disasters such as fires, oil spills and infrastructure failings.   The guiding principles enunciated in the national plan notes the following:

ü  The value of vulnerability assessment and reduction;

ü  The importance of an integrated approach to hazard risk management and development

planning;

ü  The requirement for community mobilization and public education;

ü  The need for protection of the environment, and

ü  The need for good governance.

Today some four years later several areas outlined in the national mitigation plan continue to require attention by Government.  Of note is the importance of hazard mitigation plans to address specific disasters such as flooding, fire and hazardous waste, oil spills, food security and civil unrest.  These are all disasters that Belizeans are at risk for all year around and therefore adequate preparation is an imperative.  Preparedness and risk reduction also requires collaboration between the public and private sector to accomplish this objective.  The Red Cross in Belize must be commended for their continuous efforts at developing the institutional and human capacity required as first responders to disasters.  However, this essential partnership between private and public sector must be one based on a people-centered approach with the creation of early warning systems.  Early warning and early action is what is required to save lives and reduce people’s vulnerability to hazard risk.  Risk mitigation can only be adequately addressed when there is clear understanding of the risk to Belize’s sustainable development.  This very important acknowledgement must be what underpins the formulation of Horizon 2030 or any public sector development plan.

For the private sector and businesses, their economic investment is sufficient incentive to ensure the levels of preparedness and mitigation efforts required to address any disaster.  Preparation of disaster plans is important so that businesses are certain of their response mechanism in the event of any disaster.  Investment in training staff and developing some response plan would allow for greater levels of recovery for businesses, especially those located in vulnerable areas of the country.  The dilemma for businesses under the current environment is how best to address these pressing issues of mitigation and preparedness in the face of a less than prosperous economic climate.  Nonetheless, the expense is an important investment that must compliment the efforts of the public sector.  As Belizeans maintain their readiness in high gear throughout the remainder of the current hurricane season, the call must be made on Government to make the necessary efforts to ensure that maintenance programs are addressed for hurricane shelters, the utilization of an emergency communication network is addressed and appropriate early warning systems are instituted.

Gwyneth Sydney Nah

Comments welcome at GwynethNah@gmail.com

In examining the cost of crime it must be addressed from several perspectives.  Firstly there is the cost associated with the anticipation of crime, such as preventative methods that are employed to protect oneself and property, for example increased security services.  Secondly, there is the cost assessed as a consequence of crime, this cost can be assessed as the cash outlay for lost of property or cost of prison place, but there is also the intangible cost due to psychological trauma and injury.   Lastly, cost is assessed for responding to crime.  This is the cost for the government to provide police services and the cost for utilizing the judiciary system to prosecute criminals.  The aforementioned measurement techniques must be underpinned by a clear understanding of how cost is determined and who bears the cost of crime.  Therefore, a scientific methodology must be so established that it encompasses the full and true cost in any assessment that is undertaken.  Some key principles must be examined.

In any discussion on the cost of crime, ones immediate interpretation is the consideration of the economic cost of crime.  Economic cost is usually understood to mean financial cost – any cost that can be easily quantified and expressed in dollars and cents; for example the value of a stolen car or the cost per day for keeping a prisoner at Kolbe Foundation.  However, economic cost is sometimes distinguished differently from social cost or the cost to society that is not easily quantifiable in cash terms.  Crimes such as violence against a person or lost of life have far more intangible cost that is sometimes difficult to reduce to cash terms.  Thus, to provide a comprehensive view of the full and true cost of crime, both the economic and social cost of crime ought to be assessed, however this would mean having to place a cash value on physical and emotional suffering which may prove difficult.

A second key principle that must be borne in mind when assessing the cost of crime is the concept of opportunity cost.  This economic concept is one that places a value on a resource in its alternative use.  Utilizing this principle one is able to value the human, physical and financial resources that would be made available for some alternative use other than crime prevention, detection or prosecution.  In economics the best measure of opportunity cost of a resource is its market value or price.  For example the opportunity cost for purchasing burglar bars for one’s home if $300 is equal to $300 that cannot be made available for food or educational expenses.  Opportunity cost is not always easily measured as there are some resources that have no market value.  For example the emotional suffering a person endures for having to stay indoors at night in Belize City for fear of crime, does not carry a market value, but represents an opportunity cost to the extent that the person would value going out and spending time with family and friends.  In the case of government resources, opportunity cost are far easier to determine; for example spending $1M for the operation of a project coordination unit versus investing that $1M in building new classrooms.  The opportunity cost can be easily quantified.

Another key principle that must be considered when assessing cost of crime is transfer payments.  A transfer payment is the legal transfer of resources from one party to another.  Examples of transfer payments are social security payments, social assistance or gambling.  Transfer payments are not regarded as a loss to society but as a cost to society.  In the case of a property crime, property is transferred from the owner/victim to the offender; this is considered an unwanted transfer and therefore must be considered as a cost of crime.  Transfer payments also occur with insurance claims.  Potential victims take out insurance policy for their lives and property and pay a premium.  Victims of crime who have insurance would receive monies from the insurance company after any losses they would have had as a result of crime.  Therefore, there is a transfer of resources from the potential victims who pay insurance premiums to the actual victims who receive compensation.  Another form of transfer payment would be any compensation paid to victims of crime or their families when there is the loss of life or property due to the negligence of the government.  Such form of transfer payment does not occur in Belize, but in other countries like the US and UK if the police are found responsible for the death of an individual there is some financial compensation that would be paid.  In Belize no such responsibility is taken on board for Belizeans who lose their lives while in police custody or at the hands of the police directly.  Thus, transfer payments are cost that must be accounted for and where they are not being made in the case of the government such consideration must be provided.

Beyond having a clear understanding of the underlying principles that underpins any assessment of the cost of crime, cost can be disaggregated by those who bear the cost of crime.  Firstly, there are victims be them individuals, households, businesses, organizations or institutions who face economic costs as a consequence of crime and opportunity cost of time spent dealing with crime.  Secondly, potential victims also bear cost in anticipation of crime by taking measures to reduce risk of victimization, such as security services, alarm systems, insurance premiums and the cost of government crime prevention activities.  Lastly, society also bears the cost of crime through resources spent to bring offenders and criminals to justice through the use of the justice system which involves the police department, director of public prosecution, magistrates and judges, courts, legal aid, prison and probate services.  These are all costs that tax payers bear as they are expenses undertaken by government to provide those services.

By having an appreciation of how the cost of crime can be assessed, the benefits of such an assessment can then be utilized as the basis for developing any crime reduction program.  Through the use of cost benefit analysis adequate and meaningful crime prevention program could be assessed and evaluated.  In the case of the Restore Belize Plan, it is evident that the full cost and benefit of such an effort has not been clearly conceived.  The government has presented an estimate of some $30M to implement this program, however the benefits of such a huge expenditure remain uncertain as well as the source of funding for this effort.  Therefore, when financial resources are limited and difficult to come by, the onus on government is even more so to conduct the level of technical analysis to ensure that the Belizean society will get value for money spent.  If the capacity is not resident with government, engaging the academic community would prove beneficial in driving policy development in Belize.

Gwyneth Sydney Nah

Comments welcome at GwynethNah@gmail.com

This write will critically examine Government’s response to crime by way of this recent proposal and the accompanying cabinet changes.  However, to meaningfully address the potential benefits of these changes it is imperative that there is some appreciation for examining the economic and social cost of crime in Belize.  It is by assessing what is the cost implication of crime that policy decisions can be made that provide for the optimal utilization of limited resources.  Developing countries like Belize are plagues with many challenges and limited resources, therefore policy decisions must be so informed that they create the greatest impact at all times.

Plan Restore Belize, is premised on re-establishing security through outreach rehabilitation and education and is accompanied with an institutional arrangement that leaves much to be desired.  The Crime Control and Criminal Justice Act, Chapter 102 of the laws of Belize allows for the establishment and functioning of a Crime Control Council.  This Council has representatives from the churches, cabinet ministers, non-governmental organization (NGO), business community, judiciary, bar association and one representative nominated by the leader of the opposition.  Among the many function of this Council is to “liaise with a broad spectrum of community-based and social-service organizations to develop a coordinated team-approach to reducing gang violence or the effects of substance abuse or other criminal activities”.  The law therefore currently provides for a coordinating function to be executed by this Council and to make recommendations to the Prime Minister for legislative reforms necessary in the pursuit of its objectives.  In the exercise of its functions the Council can establish committees of its own members and may co-opt other persons for specific purposes.  Therefore, with the existence of a coordinating mechanism already, it begs the question why the establishment of a parallel framework is being presented at this juncture, with no legal teeth.  The Restore Belize Council as proposed is merely a cabinet sub-committee of ministers.  While the Program Steering Committee which is a subordinate body is yet another coordinating group of ministry chief executive officers, representatives of the business community, NGO’s and Community Based Organizations (CBO).  Under the current economic constraints faced by the Government this proposal is hollow in nature and places further strain on limited financial resources.  A full-time Program Coordinating Unit will be ineffective in intervening in any meaningful way to prod ministries to execute their responsibilities; that is the function of cabinet and the Prime Minister.  This writer thus opines that a more meaningful proposal could have been one that provided greater expansion, accompanying funding mechanism and strengthening of the Crime Control Council.

The objectives of the sub-committees to be established addresses all key areas that ought to have been reflected in work programs of the existing ministries.  Police department reform, municipal government infrastructure and aesthetics, human development, legislative reform and communication are areas that ought to have continuous attention through the respective line ministries.  Furthermore, the attention of those areas must be a national one and not geographically targeted as can be expected with the creation of safe zones.  The creation of safe zones albeit a new proposal, is an existing mandate of the police department through its community outreach programs.  The accompanying budget that will be expended in the execution and implementation of these initiatives in the long term will reflect an increased cost to addressing crime in Belize and by extension an increased burden on tax payers.  It is important that as an initial step efforts should be made to assess the economic and social cost of crime to inform policy decision making.  In the absence of data on costing, the evaluation and appraisal of Government’s current effort will be most challenging.  From the presentation made by the Prime Minister one can surmise that verifiable indicators that would measure the progress of Plan Restore Belize may be lacking.  In as much as there is possibly an inclination to give this Plan a chance, critical analysis at this stage is imperative if the desired effects are to be realized.  Few would be able to argue against the seeming inconsistencies in the presentation.  One such inconsistency is the explanation for the non-renewal of the Chief Justice’s appointment based on age criteria when this position was not applied with the appointment of the new Attorney General.  The cabinet changes as the Opposition so rightly identified are simply musical chair changes.  The people’s call for Government to act must not be used as the impetus to expand cabinet, which is glaringly evident from the changes made.  When results are not forthcoming one would not be surprised to hear the explanation that a portfolio for education and youth is too burdensome.

In the next edition of this column this writer will examine the multifaceted impact of crime and the importance of assessing the cost incurred in the anticipation of crime, as a consequence of crime and the cost associated in responding to crime.

Gwyneth Sydney Nah

Comments welcome at GwynethNah@gmail.com

It is a known fact that the cost of financing in Belize is high and accessing credit not as easy.  Average interest rates on deposits in 2009 were 6.19% while at March 31, 2010 a slight reduction to 5.86% can be noted.  A review over the same period revealed the weighted average interest rate on lending actually increased from 14.07% in 2009 to 14.22% for this year.  It is important to note that lending rates vary significantly between mortgages and consumer loans.  Scotia Bank does record the lowest residential mortgage rate at 11%, with Belize Bank and Heritage Bank recording the highest rate of 13%.  Thus the movement between average lending rate and average deposit rate shows very little adjustment on the bank’s interest rate spread which averaged 8.21% in 2009 and now in 2010 is 8.03%.  The interest rate difference between deposits and lending is the operating cost and profit margin of the institutions managing these deposits and making funds available for lending; taking into account the taxes payable by the banks.  So with the banks passing on their operating cost to consumers, it begs the question how can interest rates be expected to decline when some banks continue to record positive profit margins.

A review of the financial position of the commercial banks in Belize as at March 31, 2010 illustrates the level of profits that are being realized despite the fact that Belize’s economy is still in the midst of a recession.   A review of the banks profitability can be noted by their return on assets (ROA) and return on equity (ROE).  ROA measures the banks’ profits for every $1 of assets, with 1% being the benchmark.  The higher the ratio the more income is being generated from a given level of assets.  At the end of the first quarter of this year all banks recorded negative returns with the exception of Atlantic and Scotia Bank, with the highest being 3.7% after tax for Scotiabank Belize.  ROE on the other hand measures profitability from the shareholders perspective and likewise all banks with the exception of Atlantic and Scotia Bank recorded negative returns.  The ROE could be further analyzed by decomposition of the ratio (DuPont analysis) to ascertain what is driving the high returns.  This writer would opine that both banks have been the beneficiary of large term deposits and operational accounts from public and private institutions such as the DFC, Social Security Board and Belize Telemedia Ltd.  So in effect, it is the Government that is contributing to the profit margins for those banks, instead of having financial decisions made based on risk and return analysis.

Another pointed issue is the availability and return on government securities.  Treasury Notes current return for a one year paper is 6.0% interest rate and for a two year maturity interest rate is 7.0%.  The objective of the legislative amendments was to have banks be mandated to hold larger quantities of these securities in an effort to drive interest rates closer to those levels.  However, as at March of this year ScotiaBank held the most with $60.6M and Heritage Bank the least with only $10.1M.

Government intervention through the Central Bank of Belize will be slow to manifest itself, due in the main to the fact that Government lacks the institutional capacity to avail itself of the tools required to effectively guide monetary policies.  The Central Bank has indicated the existence of a monetary policy reform project that has been in operation since 2009, further implementation in 2010 should see the formulation of liquidity management policy.    However, the implementation of any such policy remains elusive has the Government and Central Bank have both demonstrated impotence in meaningfully addressing interest rates.  Therefore, consumers are left to wait and see how best to survive under the current economic climate and play hop-scotch between the various banks while Government tries to get a grip on the financial situation.  While the ideas are being marinated, Belizeans continue to lose their homes.

Gwyneth Sydney Nah

Send comments to GwynethNah@gmail.com

The mission as stated by the CCJ in execution of its function in its original jurisdiction is to “ensure uniform interpretation and application of the Revised Treaty of Chaguaramas, thereby underpinning and advancing the CARICOM Single Market and Economy.”  It is of utmost importance for Belizeans to understand the function of the CCJ in this capacity.  In its original jurisdiction it means any person, legal entity or member state of CARICOM that is aggrieved can take a dispute to the Court.  It is there to resolve any dispute arising from benefits or interpretation of the Treaty of Chaguaramas and its subsequent revisions that established the Caribbean Community and the CARICOM Single Market and Economy (CSME).  Therefore the Court could deliver judgment on disputes between any CARICOM member country party to the Agreement that established the CCJ; disputes between any CARICOM member country and CARICOM organs and any application from nationals concerning the interpretation and application of the Treaty.  The CCJ is therefore placed as the center piece in the institutional framework that supports the fluid and smooth functioning of the CSME.  Such a legal infrastructure is one that will provide the assurances on the unimpeded economic benefits that ought to be accrued from the free movement of factors within and throughout the CSME.  The CCJ is thus important in ensuring that the region and member states operate within an investment climate that is attractive and supports the competitive production of goods and services that is deemed a critical aspect of any country’s development policy.

With Government making the necessary steps to incorporate in national legislation the position of the CCJ, they have an obligation to go further in ensuring that the supporting institutions provide the level of education and dissemination of information on the implications to the business community and Belizean nationals overall.  This responsibility falls directly to the Ministry of Foreign Trade and the Attorney General’s Office of International Agreements.  The reality for Belizean businesses is that they must be made aware of the various provisions, requirements and obligations on Government under the CSME.  This can only be accomplished if there is a sustained education campaign to make the public aware.  The most recent fiasco with investors and fisher folk from Jamaica seeking to establish a processing facility clearly highlight the need for both the public and private sector to be made aware of rights and obligations under the CSME.  The principle of non-discrimination and national treatment underpins the core value of the regional integration being fostered.  This overarching foundation is to ensure that persons and businesses are not unfairly disadvantaged in pursuing economic benefits within the CSME.  Another important responsibility also lies with the private sector with respect to the provision of services.  The need to have Mutual Recognition Agreements in place for professional services require greater participation and insight from the professional associations such as the Association of Professional Engineers, Association of Architects, Association of Realtors and Real Estate Agents among others that may not be so well established.  Consequently, the private sector also has an important role to play in the education process and this can start with the Chamber of Commerce and Business Bureau.

This writer opines that the most recent passage of the Supreme Court of Judicature (Amendment) Act of 2010 would definitely come to be challenged and questioned by the CCJ sometime in the near future.  The far reaching implications of this piece of legislation will by no means find favor with investors from within CARICOM that may choose to look at Belize as a destination for their investment. As the benefits that ought to accrue under the CSME and the nondiscriminatory requirement for nationals and non-nationals in the free movement of capital may be incongruous with the position espoused by the Supreme Court of Judicature (Amendment) Act of 2010.  Thus, the challenge remains rather pertinent as to how the current administration will ensure that in meeting with its commitment to the CSME that Belize’s investment policy framework is one that remains attractive.  It is thus important that in all of Government’s undertakings full consideration is given to the wider implications of national decisions, as Belize’s development may continue to be compromised.

Gwyneth Sydney Nah

GwynethNah@gmail.com

• Framing science policies that convert into practical programs that promote day-to-day economic growth;
• Attracting science and technology investors and industries, particularly in green technologies;
• Identifying strategic economic opportunities that cut across different ministries as well as creating synergies and efficiencies among ministries using technological tools;
• Developing the Belizean human capital in science, technology, engineering and mathematics (STEM) to advance national development; and
• Reviewing policy proposals for scientific soundness.

These laudable objectives of the PM’s Advisory Council are no doubt a key input in fostering Belize’s economic development as she strives towards industrialization.  Dr. Arlie Petters as a Belizean scientist must be greatly commended for his foresight and genius in being able to realize the establishment and need for such an initiative.  He chairs this Advisory Council and his credentials and achievements in astrophysics are world renowned.  This Advisory Council is expected to function under the aegis of the Petters Research Institute, based in Dangriga Town.  It must be noted that the members of the Advisory Council are majority scientist and professionals that are non-nationals such as Doctors Samuel Malone, George McLendon, Jeremiah Ostriker, Rochelle Schwartz-Bloom and Ms. Nancy Zeleniak.  A cursory review of their professional acumen reveals their expertise in the following areas: economics and mathematical modeling, chemistry and biochemistry, astrophysics, pharmacology, cancer biology, biological psychiatry and extensive experience in pharmaceutical and biotechnology development.  The only resident Belizeans on the Council are Doctors Bernard Bulwer, current director at the Karl Heusner Memorial Hospital and Kenrick Leslie, executive director of the Caribbean Community Climate Change Centre in Belmopan.  This columnist makes the insight that for the objectives that were established for this Advisory Body it would have been an imperative to see expertise in public policy and economic development; alongside the utilization of more Belizean social scientist that are well aware of the vagaries and nuances of development challenges in small states.  While this writer supports this new initiative, the remainder of this essay will focus on some areas that are deemed as important imperatives for the realization of successful utilization of the experts that have offered themselves to making significant contribution to Belize’s development.

Firstly, the existence and operation of a Science Advisory Council ought to have been conceived and operationalized through a holistic approach to policy formulation and development.  Like the current exercise for the preparation of Horizon 2030, these initiatives all fail to speak to any institutional arrangement that would support the implement and execution of these policy initiatives.  In order for policy implementation to be successful in Belize there requires a multi-sectoral approach that is evident in the establishment of a National Economic Council that has the required legislative backing.  For only with the existence of such an arrangement can policy formulation be made meaningful, thereby ensuring cohesion in all policies.

Secondly, the emphasis of a STEM educational approach while a necessary imperative for development does require some inputs that would warrant its success.  The United Nations Educational Scientific and Cultural Organization (UNESCO) in its 2005 World Summit on the Information Society, clearly elucidated some practical elements required to guarantee success in the partnerships in information and communication technologies for development (ICT4D).  These areas require attention in light of the broad mandate established for the PM’s Council of Science Advisors and the modus operandi of the current Government.

Firstly, the partnership must be based on trust; thus to give advice is one thing, but to follow advice requires acknowledgement of one’s shortcomings and conflict of interest may arise if there are economic interest at stake.  Secondly, this Council must have a clear focus on what it wishes to see accomplished in the medium to long term development horizon.  For the benefits of promoting STEM education are usually realized in the long term.  Therefore verifiable indicators and outputs must be sine qua non.  Thirdly, this partnership must have enthusiastic leaders and provide clear focus on sustainability of all efforts.  Lastly, and the most important element is the balance between demand and supply.  The importance of demand must clearly allow for the identification of whom and where is the drive for ICT4D initiatives.  For only if the Belizean people who ought to be the beneficiaries understand the need and how any initiative will enhance their livelihoods would policy be considered successful.  The dilemmas of development in small states are much different from the experiences and challenges faced by the industrialized countries, especially the USA.  On the supply side, knowing who are the partners and donors that would facilitate policy implementation is an important factor.  Research evidence has supported that when development initiatives are supply led and does not take account of the needs of the beneficiary communities then success may be minimal.   Whilst the elements addressed above are all key inputs, the overarching need for transparency and an ethos that speaks to ethical behavior must prevail.

This writer thus concludes, that the success of having these scientists at the disposal of Prime Minister Barrow and his Cabinet will be reflected in the benefits that would accrue to Belizeans over the next 3 years.  Dr. Petters must be applauded for his bold step, but his enthusiasm must be tamed by knowing the challenges and deficiencies of the other party that he has sought to assist.  Rest assured that Belize’s development is everyone’s responsibility and all inputs must be commended.

Gwyneth Sydney Nah

Comments welcome at GwynethNah@gmail.com

Prior to 2000 village councils throughout Belize functioned as ad hoc de facto groups selected under no clear process and functioned in a fashion that did not reflect a meaningful structure of governance.  In 2000 the PUP government heard the calls of the rural communities and driven by a grassroots movement to concretize and expand the free and democratic participation in the political framework, consultations resulted in the significant amendments to the Village Council Act (VCA), Chapter 88 of the Laws of Belize.  The main trust of the legislative amendment was to provide clearer guidelines for the functioning and operation of village councils by providing greater autonomy and the establishment of umbrella representative bodies that would provide a voice for village leaders.  This saw the creation of the District Association of Village Councils (DAVCO) and National Association of Village Councils (NAVCO).  Subsequent legislative amendments provided the regulations for the operation of DAVCO and NAVCO and other amendments sought to address increasing access to funding for village councils under the Intoxicating Liquor Licensing Act.  Thus, the strides that were made under the last administration were commendable, in providing the impetus for the decentralization of governance.  However, the time is ripe now for further inroads to be made to ensure that the sustainability and development of policies that are geared towards pro-poor development and risk management and mitigation are so enhanced.  This community driven development must be one that seeks to build upon and strengthen communities through a sustainable livelihood approach.  However, such an objective could only be fostered if the adequate attention is placed on enhancing the funding capacity for village councils.  For autonomy to govern without adequate funding mechanisms is like a shark without teeth.

Under the current legislations in place, villages derive their financing through fines and penalties paid in respect of non-compliance with various provisions of the VCA and other bylaws and legislations addressing inter alia; the collection of litter, operation of Water Boards, animal restrictions, maintenance of market stalls and slaughter houses, licensing fees for butchers, liquor licensing and any monies lawfully derived from fund raising activities.  Unlike municipal governments, central government provides no subvention for the operation of village councils.  Meager stipends of $50 monthly are provided for village council chairpersons.  In the 2009/10 FY monies voted for rural community development was a paltry $186,000 which when shared across almost 200 villages meant less than a $1,000 per village.  Through the institutional support provided by the NAVCO village leaders have voiced their need to have central government address avenues to enhance the financing structure of how the councils function in addition to ensuring respect and validity to the autonomy of these local government bodies.  The obvious need to have greater facilitation and less marginalization and victimization between area representatives and local leaders has fell on deaf ears.  Although it is evident that the current administration is short on ideas, this writer would opine that the decentralization started by the PUP administration now needs to go further to strengthen and give teeth to the autonomous functioning of these local government bodies.

Some ways in which further reforms could take place would be offered, which this write contends would be greatly supported by the PUP if they were in administration; as their stated position as presented by the leader of the opposition is one of facilitation of local leadership and independent grassroots movement.  An area that requires urgent attention firstly is funding.  A practical and pragmatic approach to the enhancement of individuals’ asset base is to allow for free and fair access to land within the communities.  The current existence and functioning of a Lots Committee within villages has been an area of direct conflict and contention between village leaders and area representatives.  The spirit of the law must prevail in making certain that local leaders, be them PUP, UDP or independent representatives drive the development and expansion of their communities.  Therefore the intervention by area representatives ought to be addressed by removing the unconstitutional authority that they have a stronghold on.  To make sure that this happens, a possible mechanism can see the payment of land rents collected by central government, passed on to the respective communities to finance their development projects.  The VCA also requires strengthening whereby the Minister responsible for Lands must not just consult the village councils, but more importantly seek their approve and support for development of lands and their designation within the communities.  Secondly, the appointment of Water Boards must be apolitical to guarantee accountability and transparency in their financial operations.  This can be accomplished by having the village councils appoint for themselves these bodies.  Financial sustainability of local government authorities is an imperative to realizing their development goals and objectives, by fostering greater commercial activities by village councils.  The NAVCO through its development partners provide for the institutional strengthening of these councils to enhance their management skills.  A government subvention would also contribute greatly to their development efforts; albeit such funding sources must be clearly based on development plans originating from within the communities.  The level of facilitation and corporation required between area representatives and local leaders is to provide support in areas such as security and law enforcement, natural disaster mitigation, enhancement of greater efficiency in the overall governance structure.

The aforementioned suggestions provide but only a snap shot of the direction that government and the political directorate needs to take to providing an avenue that engenders community driven development from the rural people of Belize.  Unlike PM Barrow’s perspective, there are no village idiots but rather talented and well educated persons within the rural communities, as many leaders, academicians, professionals and public officials all have origins from rural communities.  Consequently their heritage and return to these communities must capitalize and build on talent that is resident in these communities.  For it is only when Belizeans have confidence in the governance structure will their participation be meaningful.  Let the voice and the aspirations of villagers be heard and acted upon.  Let the election process proceed in a way that respects the growing clamor of villagers to be left alone so that unity can prevail.  This will allow for a higher caliber of leadership to emerge that will continue to drive a positive development agenda of meaningful reform.  The people of Belize spoke in 2008. They are speaking now; the PUP is listening and their commitment to serve the people is renewed. This foundation philosophy is once again being placed as the cornerstone in all their processes and decision making forum.

Gwyneth Sydney Nah

Send comments to GwynethNah@gmail.com