Election year budget packed with optimism
To absolutely nobody’s surprise, the budget speech presented by Prime Minister Said Musa was big on pleasure and small on pain…and with a general election likely between now and the April first date of implementation, any other strategy would have bordered on the absurd. While the Opposition will no doubt characterize the numbers as bogus, Mr. Barrow won’t have his say until next week. For today, the floor belonged to Said Musa. News 5’s Janelle Chanona reports from Belmopan.
Janelle Chanona, Reporting
This morning, a confident Said Musa, flanked by members of his government and cheered on by party supporters, walked up Independence Hill to present his fifth budget in as many years. Within minutes of the House coming to order, Prime Minister Musa took the podium.
Prime Minister Said Musa
“With your permission, I will now present the budget speech.”
Musa was quick to establish the context of his speech, pointing to Belize’s continued growth in “an ocean of lacklustre economic performance and despair.”
Prime Minister Said Musa
“Belizeans will be proud to know that we are beneficiaries of a growing one point seven billion economy, up by over one hundred million dollars from 2001. This new economic activity, standing on a balanced base of agriculture, aquaculture, tourism and services, manufacturing and construction has driven unemployment even lower, down to nine point one percent in 2002 from eleven percent in 2001. Underpinning this expansion were gross international reserves of U.S. one hundred and fourteen point three million dollars as of the end of 2002, up by two point one percent from the previous year, and covering almost exactly the optimal position of three months of imports. Total exports climbed to five hundred and eighty-nine million dollars, while imports fell for the first time in many years, beginning what we expect will be a trend of reducing the trade deficit”
According to the Prime Minister, the four point four percent growth in Belize’s Gross Domestic Product for 2002 came from both traditional and non-traditional activities.
The value of sugar exports grew ten point eight percent to sixty-five point eight million dollars and G.O.B. projects a further three point five percent growth in sugar revenues in 2003.
While production and income fell sharply in the citrus industry, the P.M. was quick to forecast a thirty-four point five percent increase in 2003 based on recent developments, such as higher prices and expanded production.
For Bananas, exports also fell, this time by eighteen point seven percent. But as the industry rebounds from the devastating impact of Hurricane Iris, the P.M. predicts a robust 2003 crop.
In marine products, sixty point eight million dollars came from exports of shrimp, lobster, fish and conch. G.O.B. is banking to more than double that figure, to one hundred and thirty-seven million in 2003, largely from increases in farmed shrimp and tilapia.
But Belize’s poster product had to be tourism. With cruise arrivals dramatic five hundred percent increase in 2002, a respectable one point eight percent growth in overnight arrivals, and additional airline service to Belize, tourism is expected to provide some major bucks next year.
As for Government’s financial performance, Musa said the year ending on the last day of March 2003, will equal or better projections.
Prime Minister Said Musa
“This fiscal year, we expect capital receipts of thirty-two point three million dollars, principally from previous equity investments along with ten million dollars in capital grants which, when added to the unprecedented recurrent surplus of thirty-five million, make seventy-seven point three million available for capital two investments.
Capital two investments are expected to reach seventy-three point five million, thus producing an operating surplus of three point eight million. Add to this twelve point two million in foreign grants, and some sixteen million will become available for capital three expenditure along with an additional sixty seven point eight million dollars in foreign financing. The bottom line for all these numbers is that we will achieve our target of reducing the overall fiscal deficit to less than five percent of the G.D.P.”
Against that background, the P.M. outlined his plans for 2003-2004.
Prime Minister Said Musa
“The 2203/2004 Budget proposes a continued responsible and compassionate approach to managing the people’s money. We project recurrent revenues of four hundred and forty-eight point one million, and recurrent expenses of four seventeen point one million, yielding a recurrent surplus of thirty-one million dollars. This surplus, almost at the same level of this year, emerges even after we keep our sacred commitments of salary increases to all public officers, teachers, police officers, soldiers, doctors and nurses. On April first, 2003, we commence a three-year salary increase package of eight percent for junior officers and five percent for senior officers, compounded each subsequent year to achieve a cumulative increase of twenty-six percent for junior officers and sixteen percent for the senior ranks. These increases will also benefit all government pensioners. This government promised to negotiate in good faith and deliver when we could afford to, and this year we are proud to reward the work of our public servants.
When the recurrent surplus of thirty-one million dollars is added to the twenty-two million in capital revenue and ten million in capital grants, this yields sixty-three million for Capital Two investments. Since Capital Two is programmed to spend sixty point eight million for the new fiscal year, an operational surplus of two point two million is achieved, which together with eight point six million in foreign grants, provides ten point eight million for capital three investments. Capital three investments will total seventy-seven point three million dollars.”
Included in those capital projects are plans to invest nine million in hurricane preparedness, five million for an Orange Walk Bypass, four point five in extending Centres for Employment Training countrywide, five million for low cost housing, seven point eight million for poverty reduction programs, three point eight million for agriculture.
Prime Minister Said Musa
“And Belizeans will be more at peace knowing that when sickness strikes, the N.H.I. will afford them quality health care, not just on the Southside of Belize City as it has for the past two years, but everywhere in the country. Today, our government places on record its intention to introduce the N.H.I. package of healthcare benefits to the northside of Belize City in 2003, and to subsequently roll out the N.H.I. to all districts, as the public sector health reform projects near completion. This will be accomplished by utilizing the Social Security mechanism, without introducing any new taxes.”
Not only did the P.M. refrain from new taxes, he also said that come April first, the income tax exemption would rise from twenty to twenty-five thousand dollars. But the most dramatic disclosure of the day was government’s announcement that by this summer, without Chalillo, many Belizeans will pay less for electricity.
Ralph Fonseca, Minister of Budget Management
“It’s not something that we’re convincing them overnight. We said almost five years ago, that electricity rates would come down. This was a planned thing from that time, from the time we privatised B.E.L., written into privatisation agreement with the people that bought B.E.L., was this idea that they would have to bring down the rates, first to the commercial sector, to be more internationally competitive, because that again widens the pie. And then once you have a pie at a point where they have the volumes that they need to be internationally competitive, then you help those people that need it most, the small and medium size consumers. So this is a planned thing that has been taking place over a long period of time. Obviously, it would have been better. It would have been a bigger decrease if we could have built Chalillo. So those people who have stopped us from building Chalillo, I don’t know how they sleep at night, when they think that there are people out there paying more for electricity now than they should have been paying if we had Chalillo built ahead of time. But as the Prime Minister also said, we will build Chalillo.”
Janelle Chanona
“When will we see lower rates on consumer’s bills?”
Ralph Fonseca
“Effective April first, as the Prime Minister said.”
The budget will be debated next Friday, on January twenty-fourth. Janelle Chanona for News 5.
