Belize listed in United States INCSR report

March 21st, 2014

In the recently released 2014 International Narcotics Control Strategy (INCSR) Report, – an annual evaluation compiled by the U.S. Department of State in cooperation with other investigative authorities of the U.S. Government – it was confirmed already for the fourth time that the level of corruption remains very strong in Belize. The country is listed in the last category, named “Jurisdictions of Primary Concern”, with the countries which have the most inadequate and/or insufficient regulation of their financial systems.

It was specifically stated in the 2014 INCSR report about the suspicions that money laundering activity takes place in the Benque Viejo Free Zone and the Corozal Commercial Free Zone, which is believed to be “heavily involved in trade-based money laundering and the illicit importation of duty free products.”

The report notes that “Belize faces a challenging struggle against the threats of illegal drugs. Drug trafficking and drug use appear to be rising, and will continue if left unaddressed.” It also stressed that the investigative authority, the Financial Intelligence Unit, has poor resources and only limited assistance from other law enforcement agencies and government departments.

The INCSR pointed out that last year the Caribbean Financial Action Task Force (CFATF) issued statement on Belize where addressed the jurisdiction, which is part of this organization, with critics and certain pressure for “not complying with its AML/CFT action plan”, to fight the deficiencies.

Prime Minister of Belize presented Budget for 2014/2015

March 15th, 2014

Belize Prime Minister Dean Barrow has presented the 2014-2015 Budget; in his speech, he was talking about the expected economic environment in 2014, stating that the oil prices will stay down, and so will be the cost of living. The PM turned to the budget priorities – education, healthcare and infrastructure, and emphasized the ability of the government to raise salaries this year.

Speaking about the draft estimates for fiscal year 2014-2015, the Prime Minister said: “The proposed budget targets a preliminary primary surplus of 1.0 percent of GDP and an overall deficit of 1.7 percent of GDP. Total expenditure is estimated at $1.0 billion while total revenue and grants are projected at $956 million. When taken together, this results in the projected overall deficit of $57 million, the equivalent of 1.7 percent of GDP. To this figure we must add a further $70 million for loan amortization requirements, and so arrive at the Total Financing Needs of $127 million.”

To cover these financing needs, the Government of Belize plans to use the following sources: a $48 million loan to fund its Capital Three Expenditure Program, $20 million in budget support financing from the Taiwan International Cooperation and Development Fund and $59 million from Venezuela’s PetroCaribe initiative.

The forecasted revenue is $956 million, an overall shortfall of $57 million dollars, or 1.7% of GDP. Where revenue is concerned, Belize Government has identified five primary sources, the main of which will be a boost in collection of taxes on goods and services – total amount of $315 million. Other named sources were income tax, international trade and transactions and non-tax revenue.

Debates of the proposed Budget for the new financial year are to begin this week, when the Opposition will have a go at the numbers.

Economic figures for GDP published by Statistical Institute of Belize

February 28th, 2014

The Statistical Institute of Belize held its second press conference, having released the information about the GDP and inflation rates in the country in the year 2013. It was confirmed that the food prices rose by more than four percent in 2013 as compared to 2012; transportation costs also increased. The highest inflation rate was in Belmopan and Corozal. This is influenced by the fact that Belizeans are bringing food and fuel products from the external market.

According to the S.I.B. statistics, the economic growth rate of 0.7 percent was the lowest since 2009, when it was 0.3 percent. GDP level is relative to an increase in the supply of currency or credit when compared with the availability of goods and services. Projects for the upcoming fiscal year are quite promising.

The factual information used to produce the GDP is gathered from various sources, including production figures from the major industries and information from the Belizean government agencies.

Belize passed bill on CFATF issue

February 15th, 2014

Last week, among the bills passed in the House of Representatives, there was the bill addressing the issue by the Caribbean Financial Action Task Force (CFATF). In November 2013, it was said that Belize and Guyana would be blacklisted for non-compliance in addressing deficiencies in their legislation on money laundering and offshore banking. It was recognized by the CFATF that, despite some steps had been taken, Belize jurisdiction has not done enough to improve the situation with the Anti-money Laundering and Combating the Financing of Terrorism.

The Prime Minister of Belize sought the approval of the House to pass the new bill before the meeting of the CFATF, and in this case the Opposition supported the government. The Leader of the Opposition stated: “There is our response as we got knowledge response to the international pressure which is real” … “which will inevitably lead to, in my view, the complete undermining of the offshore sector, the offshore industry in Belize, which is exactly perhaps what is intended.”