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Jan 30, 2008

P.M. says oil fund will serve dual purpose

Story PictureOne of the major areas of new investment anticipated over the next five years involves the petroleum industry. Already the nation’s largest export, oil is expected to provide an extra boost to government revenues for at least the next decade. What is not clear, however, is exactly how that hard currency will be spent. According to the Prime Minister, the government will have to perform a careful balancing act.

Prime Minister Said Musa
“The Oil Fund will be utilised basically for two main purposes. One of course is to assist us in the social sector in the budget for the social sector, particularly in the area of health under the National Health Insurance Programme and education. Secondly, deposits would be made and invested in safe investments, in other words, in a secure blue chip bank account to protect—to insure that we have funding in place for future generations. In other words some of it will be deposited and not spent right away because under the legislation that we have passed a percentage of the petroleum fund has to be invested for future generations.”

Marion Ali
“And how will that be managed over the years?”

Prime Minister Said Musa
“It will be managed by a Board that will be set up. As soon as this election is over that Board will be appointed and indeed for this year, of course, the funding will go towards that fund. We have already identified specifically that we have to put substantial amount of money into the National Health Insurance, N.H.I. programme to ensure that we have a hundred percent universal rollout of primary health care in our country for all Belizeans.”

Exactly how much money goes into the oil fund will depend on a number of factors including the level of production, world price of oil and the profitability of Belize Natural Energy, which will pay forty percent of its bottom line in income tax. The company’s Spanish Lookout field is expected to produce around a million barrels of oil each year.

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