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Aug 5, 2016

IMF Recommendations a Real Possibility Given Belize’s Economic State

Joseph Waight

And here’s another impact you may not have been expecting, and one which certainly won’t sit well on top of the expenses brought by Earl. Remember that letter from the Governor of the Central Bank to the FinSec Joe Waight basically telling him that things were dread? Okay. Remember those recommendations from the IMF in the last Article Four report which included the raising of taxes? According to Waight, despite Earl we were in challenging times. But now because of Earl, G.O.B. may have to bring down the tax hammer sooner rather than later.

 

Joseph Waight, Financial Secretary

“I think what the governor was telling me, what I read, is that not because we have historically high reserves that means that we can be liberal in spending them because on the other hand we have historically high claims against these reserves. Growth is low; it will be lower now given the impact, but growth is already low and what the governor was telling me was that look, I can’t—I’m speaking for the governor in third person—I can’t let you have all the foreign exchange you want on demand because there are other competing needs against this same foreign exchange; for imports and things. And we are not earning it as fast as we are spending it. So if I were to just spend a third of my reserves, or sell you a third of my reserves, I may not have enough for the rest of the economy.”

 

Mike Rudon

“But there is also one whole section in that letter in which he says the Ashcroft payment of seventy million aside…and then he lists a series of factors which are basically affecting the economy; for example the first quarter of this year, two percent contracting of the economy. So again, I ask you, are we approaching a point as the PM had said where we are likely to hit a wall. Are we in a sort of a crisis stage?”

 

Joseph Waight

“No, I think it is a warning sign that we have to be very careful. We have to be more…very careful how we spend foreign exchange because we are not earning it as fast as before. We don’t want to run out and therefore we have to prioritize and ensure that we have enough to protect the exchange rate and also to fund the regular cost of commerce, particularly fuel and other things that you need—lifeblood of the economy. And therefore the government can’t take it all for itself.”

 

Mike Rudon

“The last time we spoke, we had discussed the IMF measures which they had recommended. You had said that you all will be looking at that. I would think that you all would be looking even closer at it now because of this external shock. Can you tell us how close you all have come to maybe really implementing any of these measures?”

 

Joseph Waight

“The government is still looking at them, but now, given this, I think we may now have to make a decision earlier rather than later on what we want to do because we have a gap and this is going to widen the gap if we don’t close it.”

 

Mike Rudon

“Couple of those suggestions, raising of the GST; has that been put on the table?”

 

Joseph Waight

“Everything is being considered, yes. Everything is being considered including raising of the GST.”

 

Mike Rudon

“And these are things which might, as you’ve said before, be put into place sooner rather than later?”

 

Joseph Waight

“I would think so, yes.”

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1 Response for “IMF Recommendations a Real Possibility Given Belize’s Economic State”

  1. fedup says:

    Ministers and highly paid “public servants” like Joe should have their salaries cut. And let’s have a close look at how Ministers have acquired their assets and make them give back what rightfully belongs to the Belizean people!

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