Global financial crisis hits home
The global economic crisis was first seen on Wall Street when stocks began to plummet in the past months. It has found its way around the world from the United States and has affected global financial markets, particularly in Europe and Asia. Governments of developed countries around the world have been meeting and discussing bail out plans to save their economies. The U.S. government has its own seven hundred billion dollar bailout plan and European nations have allocated two point three trillion dollars in guarantees and other measures to keep their economies afloat. And according to Kevin Herrera, President of the Belize Chamber of Commerce and Alan Slusher, President of the Board of Directors of the Central Bank, Belize is also affected by the world crisis.
Alan Slusher, Chairman, Board of Directors, Central Bank of Belize
“There have been job loses in the U.S. over the last year of between three quarters of a million and a million jobs and it will be unreasonable not to expect that some Belizean-Americans would have lost jobs as a result and there would be a decline in remittance to us. There is not much we can do about that except to ask people to be very careful in the management of their finances. There are likely to be some job losses in Belize too as a result of the impact on tourism. As noted in the Central Bank’s release, tourism numbers are already down compared to last year.”
Kevin Herrera, C.E.O., Chamber of Commerce
“Another area I think is the real estate market, especially the real estate that are targeted to finance. That you will see a downturn in and I think we’ve gotten some feedback that that has slowed. With respect to exports, I think the impact is more that there seems to be some reduction in world prices and a number of our exports. What that trend will be and if it’s the global financial crisis that is causing it, I know that some of our commodities—a number of our commodity products will see a reduction in prices as well. Another area, some of our members complained about is that freight has certainly gone up. I’ve heard numbers quoted as high as forty-five percent in certain areas. Acquisition costs have gone up and again I’ve gotten numbers like twenty percent acquisition cost increase. So I think we need to brace ourselves and monitor the situation for it closely. I’m hoping that as part of an overall national response and we’re working on this to set up a mechanism to dialogue and set up some strategies to deal with it from a Belizean standpoint”
Alan Slusher
“Belize has been affected in three main areas; tourism, property development, sales that are directed at foreigners and family remittances from people abroad back. In the tourism and property development areas the downturn is already quite visible. I don’t know precisely what the impact on family remittance is but we expect that there will be some decrease. We have been trying to find out whether any of our goods exporters are likely to be affected. We don’t think so and we have not heard comments anywhere; either from the producers or from the banking system. In relation to the financial sector, the foreign reserves are safe. Central Bank has always had a very conservative investment strategy and that conservatism has intensified beginning late last year when the crisis in the financial center started.”
Slusher says that the offshore and local banking institutions have been consulted and they are reasonably sure that they will not be affected by the global financial crisis. Belize’s fixed exchange rate with the United States is held firmly in place by official foreign reserves holdings at three hundred and ten million dollars.
