Archive for March, 2007

Budget Speech 2007/2008: “Facing, Fixing, Moving ahead”. Part 1

Wednesday, March 28th, 2007

On March 2, 2007, the Budget Speech for 2007/2008 was published by Government of Belize.

In his speech, the Belizean Prime Minister and Minister of Finance, Said Musa, emphasized that this Budget that ensures the fact that country continues growing in a stable and sustainable way. He pointed out that this Budget invests in our nation’s economic infrastructure; that it ends the year with a significantly reduced deficit and another primary surplus; that the Budget will generate more and better paying jobs; that it invests more in the human capital of Belize through education and training for more productive living; and creates healthier and stronger communities to tackle the challenges faced by families.

As described before, Belize tax reform was one of the issues discussed by Musa in the Budget Speech 2007/2008.

Another issue covered by Prime Minister was Belize debt exchange offer.

Musa also reported that, according to the annual labour force survey, unemployment fell from 11% to 9.4% “largely due to the vibrancy of the services sector, especially tourism”. In 2002,  unemployment rate was 10%, in 2003 – 12.9%, in 2004 – 11.6%, in 2005 – 11%, and in 2006 – 9.4%. Accordingly,  in the period from 2002 to 2006, the amount of employed labour force increased from 89.2 thousand to 102.2 thousand.

In accordance with the Budget, the Consumer Price Index rose by 4.3%.  Major commodity groups were especially influenced by transport and communications and rent, water, fuel and power.

Fitch assigns “A” to BSI III

Thursday, March 22nd, 2007

Fitch Ratings has given an “A’” rating to Belize Sovereign Investments III Limited Notes (BSI III).

About $86 million in 2 tranches of pari passu debt was issued by BSI III from a Cayman Island special purpose vehicle (SPV) with an expected maturity of 2029.

2 restructured government of Belize sovereign obligations as well as 2 insurance policies underwritten by Steadfast Insurance Company back the repayment of the notes. Respective insurance policy of each government of Belize obligation directly covers any non-payment by the government of Belize.

The rating on BSI III notes is to a great extent supported by the financial strength of the insurance provider. Also, to some extent, it is supported by the default probability of the government of Belize.

Limitations to the policy’s claims-paying probability were taken into account by Fitch, when assigning the rating. Fitch paid special attention to the policy’s conditionality, termination events and claims-paying process, because this could lead to delays to timely debt service payments.


Coldwell Banker opens Real Estate office in Belize

Sunday, March 18th, 2007

On February 21, 2007, Coldwell Banker opened its 1st real estate office in Belize.

Launching Coldwell Banker Belize Real Estate happened following Belize’s highlighting as “One of the 6 hottest foreign second home markets for 2007” by CNN.

Belize seems to become one of the strongest emerging markets for investments because of a stable political democracy, a currency pegged to the USD, consistent increases in tourist arrivals, miles of sandy beaches, the largest barrier reef in the Western hemisphere, intricate cave systems and ancient Mayan pyramids. Also, Belize is the only English-speaking democratic country in Central America, its legal system based on British law, anthere are numerous tax incentives for property investors in the country.

The Coldwell Banker office is the former “Island Galleria”, upgraded and re-branded “The Coldwell Banker Building” , located in the heart of San Pedro on Ambergris Caye.

General Manger Arne Rodhall said that Coldwell Banker is excited about “bringing a real estate service to Belize anchored in the traditions of one of the world’s premier real estate organizations”.

Also, Arne said that Coldwell Banker Belize works with the best developers and aims at seeking out the best opportunities for profit in Belize.

Coldwell Banker Belize has a qualified team that can boats of combined domestic and international real estate experience of more than 50 years.

It is also worth mentioning that the Group is launching a Social Investment Fund in order to support community projects and asset building initiatives in Central America (to begin in Nicaragua).

Musa speaks on Tax Reform

Tuesday, March 13th, 2007

In his 2007 budget speech, the Belizean Prime Minister and Minister of Finance, Said Musa, has announced that the process of tax reform must be accomplished quickly during the coming year.

According to Musa, the government will reconvene the Tax Committee soon in order to advise on several matters. He said that the Tax Reform Committee should review proposals in order to increase the threshold of income tax to $24,000 and reintroduce tax exemptions for charitable contributions to schools, registered organizations and athletic organizations. Then, the Tax Reform Committee will be asked to review the Excise Tax regime in order to remove the perverse incentives engaging in contraband that costs much to revenue. Also, the Committee will be asked to review the GST (goods and services tax) to make its recommendations for improvements. (It should be reminded that in July 2006, Belize abolished its sales tax, replacing it with a 10% GST).

According to Musa, the government will ask the Tax Reform Committee make recommendations on the above-mentioned matters by June 30, 2007.

The draft budget supposes that real GDP will grow by between 1.5-2% in 2007, while nominal GDP will grow by about 6%. On this basis, natural growth in tax revenue of 6% should be expected.

Musa stated that “the underlying objective is to ensure that the primary surplus remains above 3% of GDP and the overall deficit declines towards 1% of GDP”, and added that this is expected without any increases in taxes.