Central bankers meet in Belize; fear oil-fuelled inflation

No matter where you travel across the Caribbean, one of the most imposing buildings in any country is invariably its Central Bank. And that’s fine, because no matter how badly a nation’s economy may be functioning, in the world of high finance, the impression of strength and stability is crucial. News Five’s Janelle Chanona reports on a gathering of those people who work behind all those fancy facades.

Janelle Chanona, Reporting
This morning Central bankers from across the region gathered in Belize City to participate in the thirty-ninth Annual Caribbean Centre for Monetary Studies Conference. Under the theme, Economic and Social Development Trends and Prospects in the Caribbean, over the next three days the delegates will share experiences and strategize for the future.

Joseph Waight, Financial Secretary of Belize
“We all have problems and we all have very little time to overcome them. In times like these, we need the individual and collective advice of the best and brightest minds of the region.”

Dr. Marion Williams, Chair, Executive Committee, Centre for Monetary Studies
“It is true that our economies are much more diversified than they were in the past and therefore we are less dependent on a single country like the U.S., but if it really becomes extreme there will be implications for all of us.”

One of the key resource persons in the Caribbean is Dr. Marion Williams, Governor of the Central Bank of Barbados and Chairperson of the Executive Committee of the Centre for Monetary Studies. According to Williams, management of the region’s financial assets over the next year will be crucial.

Dr. Marion Williams
“One of the challenges will be to prevent or seek to prevent wage-price inflation and that is going to be a challenge that will require the cooperation of labour unions, government, and the private sector. I think also the issue of the value of, or the cost of imported items is also a major challenge. I don’t know, however, that much can be done in this area except that we have to increase productivity across the region in order to ensure that our businesses are able to meet these challenges.”

Closer to home, local financial experts say rising oil prices will have significant impact on small open economies like that of Belize.

Joseph Waight
“Not only will there be a price effect, that is because it s oil runs the economy, it could affect our prices internally, it certainly will have an effect on our level of reserves, we have to find the foreign currency to pay it, and it will put pressure on incomes, especially on the lower income people. Government will have to look at it very carefully to see—we cannot sustain the loss, we cannot sustain, we cannot moderate the price very carefully, we have to pass on most of it, but we are aware it will affect our competitiveness and it will put a severe pressure on the upward price of things in Belize. Indeed there is a tax element to the price of oil and sometimes the Government may move that back just a little but there is a limit it can actually roll back, so we are looking at tough times ahead and we don’t see any immediate relief in sight.”

And while a commercial petroleum find in Spanish Lookout may represent a silver lining to the oil price cloud, Waight advises Belizeans to brace for the worse.

Joseph Waight
“We are hoping that domestic production will help to alleviate a little and there’s a move by the oil people to try to do a little refining for the local market. But remember, that too will have to be subject to some sort of tax, excise tax or so to equalize, but the best thing we can do is try to ration, not ration, but to conserve and use more public transport and those types of things.”

And that’s advice that will no doubt reverberate across the Caribbean. The three-day conference is being hosted by the Belize Central Bank at the Belize Biltmore Plaza and will end on Friday. Reporting for News Five, I am Janelle Chanona.

As part of the Monetary Studies Conference, the Caribbean Development Bank’s Director of Economics and Programming, Belizean Alan Slusher, will on Wednesday night deliver the twenty-second Adlith Brown Memorial Lecture at the Jungle Pavilion at Old Belize. His address, which begins at seven, is titled “Caribbean Development: Issues and Prospects.”