Minister of Economic Development addresses Chamber A.G.M.
In economic news today was the day that economy Czar Ralph Fonseca, also known as Minister of Budget Planning and Management, Economic Development, Investment and Trade, got a chance to take his message of growth economics directly to the people who are supposed to do the growing. Speaking at a midday luncheon of the Belize Business Bureau and the A.G.M. of the Chamber of Commerce a few hours later, Fonseca outlined his government’s plan to jump start the economy with lower interest rates, a friendlier tax system and restructured external debt. He also took the opportunity to invite the nation’s business community to help find a way to plug what he called the “large leaks of foreign exchange”… particularly those at the northern border.
Ralph Fonseca, Minister of Economic Development
“We all know that daily millions of pesos are purchased with our Belize dollars. These Belize dollars are then at night hand traded in our tourist centers for our hard-earned U.S. dollars. The next morning these U.S. dollars appear in Mexican banks searching for the best rate to purchase pesos and the leak or maybe the poor continues.
Today we invite you to join an appeal to shoppers, the tax committees and local merchants sensitizing them to the market realities. Our study reveals that this is a $150,000,000 drain on our reserves and if only 20 percent of this is net profit then our merchants are allowing some $30,000,000 in net earnings to escape.”
Q: “Can you really solve this problem or is it just one of those things that Belizeans just like to shop in Chetumal?”
Ralph Fonseca
“I think you have actually just put your fingers on it: Belizeans like to shop in Chetumal because their dollars have been made comfortable in Chetumal. And this is what I have said to the merchants, that they have created an environment in Belize which is not as comfortable as Chetumal’s. It is not just the costs of products, because our studies show that only some 30 percent of what is purchased over there comes at a cheaper price than prices in Belize. But it is the entire environment. Belizeans are being entertained, they are being made very comfortable over there. The merchants are going after the Belize dollar. We’re not doing that. So I have asked the merchants to join with us to go after the Belizean dollar; stop taking it for granted. “
Fonseca offered some economic targets for the next five years which include an annual average growth rate of between 8.5 and 9 percent and a reduction of the debt to G.D.P. ratio from its present 40 percent to a more manageable 30 percent. With regard to taxation, Fonseca said that the tax reform committee should finish its work by the end of this month and government should present formal proposals by the end of the year.
