Weak U.S. dollar has mixed effect on Belize
If you have been watching U.S. television news you would have noticed that Americans, long bedeviled by a seemingly endless war in Iraq, having something else worry about: the economy. And rightly so. With the dollar at an all time low against the Euro and other currencies, the price of oil at an all time high, home foreclosures reaching record levels, unemployment and inflation up and G.D.P. down … Uncle Sam is taking some heavy licks.
But what about Belize? Unfortunately, with our blue note tied to the big green one up north, our fate is in many ways tied to theirs—but not completely. First, the bad news: with a falling dollar all goods and services imported from Europe or Japan will have a tendency to cost more. This means everything from Dutch cheese to English chocolates to Japanese cars. And for those few Belizeans wealthy enough to visit Europe—forget it—a day in London or Paris will cost more than a week in San Pedro.
Another negative effect of a shaky U.S. economy is that Americans will tend to travel less … and recent arrival figures for Belize do show a slowdown. But that situation is not clear, because the same factors that make Europe impossible for Belizean travelers mean that U.S. vacationers will also abandon the continent for places cheaper and closer to home—like Belize. The stronger Euro also makes Belize and other “dollar destinations” a real bargain for Europeans, who, along with newly empowered Canadians, should show up here in greatly increased numbers. The same holds true for foreign buyers of Belizean vacation homes and condominiums.
Another group to benefit from a battered dollar are those Belizeans who sell their goods and services abroad. The sugar industry, Belize’s biggest exporter to Europe, has been benefiting from a rising Euro for years and stands to do so again. According to Belize Sugar Industries C.E.O. Joey Montalvo, the company has sold forward for the next two years at favourable exchange rates and that revenue enhancing move should largely compensate for lower prices following the phasing out of E.U. subsidies. The same should be true for the banana industry, but unfortunately it seems that under their present marketing arrangements, Belizean growers sell to the Irish marketing company Fyffes at a fixed price in U.S. dollars—so it is Fyffes that reaps the windfall profit on the currency exchange. As for the average Belizean on a budget, the best advice is to look for goods from the U.S., Central America, Mexico or China … or better still, buy Belizean.
