Belize Business News

The Belize Electricity Limited (BEL) has confirmed that one of its major creditors, First Caribbean International Bank, has discontinued its credit. It also said that Scotiabank is currently reviewing its credit arrangement with BEL.

Earlier, BEL reported in a press release that it was “experiencing severe financial difficulties” and therefore it had to require clients to pay the full cost of service installation upfront, and refunds will be provided when other clients connect to the line extension.

Recently, the Government of Belize had to provide a letter of credit for BEL for its credit arrangement with Comision Federal de Electricidad in Mexico. From this company BEL purchases a major percentage of the power it distributes in the local market.

The Ministry of Finance informed the public on lower Pump Prices for Fuel Products. The decreased prices came into force at midnight November 4, 2008.

The reduced prices for fuel products of Belize City Pump Prices per gallon have been changed the following way:
Premium Gasoline – from USD 10.44 to USD 7.41;
Regular Gasoline – from USD 10.11 to USD 7.05;
Kerosene Oil – from USD 9.17 to USD 6.79;
Diesel Oil - from USD 9.03 to USD 6.96.

Fuel products prices in the districts will also decrease commensurately.

According to the Ministry of Finance, in keeping with Government policy, any future changes of prices in acquisition cost will be passed on fully to the prices at the pump.

On November 3, the website of the Government of Belize published a press release to announce that the Belize Bureau of Standards will host a SME (Small and Medium Enterprises) Workshop on Labeling and Tourism.

The event is aimed to promote SME competitiveness in the Caribbean through International Standards. The workshop will be held on November 24. The one-day event is facilitated through the Caribbean Regional Organization for Standards and Quality (CROSQ) and the Inter-American Development Bank Multilateral International Fund (MIF) Project.

The 1st session will be entitled “SME Workshop on Labeling of Pre-packaged Food”, while the 2nd one “SME Workshop on Tour Guides and Tour Operators”.

The objectives of the workshop are as follows:
- sensitizing participants as to the importance of standards to their business;
- familiarizing participants with the standards development process and their role in that process;
- exposing participants to the Draft Standards for their input into its contents.

In accordance with a new survey published by the Statistical Unit of Belize, the cost of living in Belize increased dramatically – it jumped 10% between August 2007 and August 2008. This is the highest increase in the last 25 years that was fuelled by run-away inflation topping 17.9%.

The main cause of inflation in Belize is the increase of food and fuel prices. Talking about the food, beverage and tobacco group rose by 65.5%, flour rose by 65.5%, rice rose by 54.9%, while bread by 34.6%.

Also, medical care rose by 4.2% and utilities (water, electricity and fuel) rose by 4.6%. Diesel rose by 44%, gasoline – by 9.3 %, while butane – by 20.6%.

According to the Economic Commission for Latin America and the Caribbean, at 9.6% increase in consumer prices, Belize is in line with other Caribbean and Central American countries.

In July, the Belize Government set USD 90 threshold – this was a price above which a 50% windfall tax on petroleum profits would start to levy. Latest developments in the global market have led to reducing the price of oil below that threshold price. This meant that at current prices the Government of Belize did not earn new taxes on petroleum exports.

Therefore, the Government of Belize revised its revenue projection from the tax on account of falling prices. Tax was revised for the remainder of the fiscal year from USD 18 million to USD 5 million.

Oil prices have dropped below USD 88 per barrel, and this decline in prices was explained by European banking turmoil and fears of a global economic slowdown caused by it.

In July, the windfall tax looked promising as oil prices reached their peak of USD 147 per barrel. Today the prices are so low that the windfall tax cannot be applied at all.

The windfall tax was implemented just recently – on the 1st of September.

The monopoly utility company has fired 19 Belize Energy workers from their jobs. Even more workers have been given notice of termination. Some of employees have been working with Belize Electricity Limited (BEL) for more than 20 years.

President of the Energy Workers Union, Sean Nicholas, claimed that Belize Electricity Limited was trying to destroy the Union by means of getting rid of its members. According to him, workers were intimidated. BEL announced that it is just a downsizing, however, only union workers were fired.

It was announced in the end of September that the government of Belize would sign an oil agreement with the Chinese Petroleum Corporation (CPC). CPC is Taiwan’s largest state-owned oil refiner. The deal was planned to be signed soon to allow the Asian nation to tap large reserves of oil in the waters off Belize.

This oil exploration agreement between the government of Belize and CPC Corp. Taiwan was signed on September 29.

According to Taiwanese Ambassador to Belize, Joseph Shih, the document has upgraded the bilateral cooperation of the two sides to a new level. Shih said that the agreement will allow Taiwan to drill in a 4800 square kilometre area in the waters of Belize.

Diplomatic relations between Belize and Taiwan were established in 1989 after Belize cut its ties with the People’s Republic of China.

A senior US official with the US Department of State said that that Belize and the United States continue to maintain a good friendly relationship. However, she said that there are still some pressing issues which the US and Belize need to discuss.

The Deputy Assistant Secretary of State in the Bureau of Western Hemisphere Affairs, Kristen Madison visited Belize from September 17 to September 19. She spent 3 days in Belize to speak with senior government officials as well as visited the OAS representative at the Adjacency Zone near the Benque border with Guatemala.

It is worth noting that the comment on whether or not American citizens should feel safe when on visit in Belize was declined by her. This question was caused by a recent British documentary on gang activities in Belize which was aired on the Internet. The documentary claims that Belize is one of the most dangerous places for living. Madison also commented that security issues is an issue not only for visitors but for Belizeans themselves as well.

Security was one of the issues discussed by Madison and Belizean officials. Madison said that she wants to explore this area and to figure out where the United States’ government can assist Belize in addressing the currently existing security problems.

On August 28, the Association of Concerned Belizeans (ACB) published a release under mounting public pressure. It stated that because of the recent upheaval within the Belize City Council as regards the alleged mishandling of public finances, “the Association of Concerned Belizeans calls upon the Belize City Council and all other municipal bodies to immediately prepare and present to the public the audited financials for their respective municipalities”. In the statement, the ACB asks the public to demand the immediate disclosure of the audited financials from all municipal bodies that currently are governing.

On August 28, 2008, the Belize Constitution 6th Amendment Bill got the majority approval in the Senate – 9 out of 10 Senators present at the voting were in favor of the bill, while just 1 PUP Opposition member rejected the bill.

When the amendment to the Constitution becomes law, a new Senator would be appointed, and majority control of the Senate will be passed to the Opposition and the non-Government senators. The new Senator will come from the community of non-governmental organizations in Belize.