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Jun 5, 2020

Time to Look at Other Industries for Foreign Exchange

Nikita Usher

Demand for foreign exchange is significantly high since a majority of goods sold on the retail floor are imported.  Those items are purchased in U.S. dollars.  Foreign exchange, on the other hand, is also earned through various means, including tourism, which accounts for forty percent of those earnings.  According to Nikita Usher, President of the Belize Chamber of Commerce and Industry, renewed focus should be placed on other industries such as the agro-productive sector.

 

Nikita Usher, President, B.C.C.I.

“Foreign exchange as you’re aware comes from those entities who export out of Belize which would be your agro-productive sector which I think contributes to about, pre-COVID, for about thirty-five percent or thirty-seven percent, thereabout, of the foreign exchange.  The tourism sector does another forty percent and then the remainder, you then know, you have the BPOs that also have some of that as well.  You have real estate, people who also do foreign exchange as well, so I’m giving you some of these areas that you have.  You will also have what government brings to the table, loans that government may receive.  You heard the prime minister speaking about loans due to come in.  That will also bolster, using his words, bolster the reserves that the Central Bank currently has.  But the bulk of your foreign exchange in this country comes from those sectors that I just named.  Now how do we use that now?  Those entities that are, businesses have to pay for their expenses whatever they import, packaging material.  You know that to be in business quite a bit of the goods have to come from overseas, you don’t have that manufactured in Belize.  And so, a small business, despite what size the business is, they have to now find ways of getting their raw material/ingredients/packaging material to come from wherever it is, Central America, the U.S., China.  It still has to be paid with foreign exchange and particularly in this case, U.S. currency. You notice that what has happened to us, we kept hearing COVID and I need not go back into much of that, but you realize that with tourism gone now, that’s forty percent of your stake that is now disappeared from foreign exchange.  Also recall that all your stores, the Brodies, the Save-U and all the others, Publics and all the others, require to purchase goods from overseas.  You have to buy it and you have to pay for it using foreign exchange.”

 

The government is also banking on an infusion of U.S. dollars from loans from the international financial institutions; the first tranche expected from the I.D.B. amounting to twelve million dollars.


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