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Jun 11, 2008

Barrow: oil money will plug holes in budget

Story PicturePublic consultation: the practice has become part of the lexicon of modern governance, right up there with the twin mantras of transparency and accountability. But if the past is any guide, the benefits of public consultations have been mixed, with the effort being more important than any knowledge or consensus achieved. That having been said, over the last several weeks government has been holding open meetings across the nation, seeking advice on … the budget. News Five’s Janelle Chanona reports.

Prime Minister Dean Barrow
“We are embracing inclusiveness and seeking mechanisms, seeking ways to institutionalize that inclusiveness. We are doing this because we want and insist that Government policy be directly relevant to the needs and desires of the people.”

Janelle Chanona, Reporting
And to prove it, since taking office in February, the Government of Prime Minister Dean Barrow has embarked on a series of consultations. Chief among them have been talks with representatives from a wide cross-section of society on the 2008/2009 budget.

Joseph Waight, Financial Secretary
“Too often in the past our national budgets were drawn up, many times in a hurry, and often based on information within the government itself and it generally tended to be a continuation of the status quo with priority given to paying salaries and wages and sometimes only that. And then you waited for next year with the hope of better things to come.”

But as the prices of fuel and food continue to skyrocket, predicting the future requires more than hope. Hence the need, according to Financial Advisor Dr. Carla Barnett, for as much participation in the process as possible.

Dr. Carla Barnett, Financial Advisor
“The budget affects everybody. No matter who you are, the budget affects you. If you pay taxes, if you use government services, the budget does affect you. So what this is doing is collecting a second set of information that can be used by government in setting priorities and determining how to act. So it’s broadening the information base and I think people make better decisions when the have more information at hand.”

Dr. Geraldo Flowers, University of Belize
“It is during times of fiscal constraint that we need to be able to budget even more effectively. As we know, probably the best ‘budgeters’ are people from our own families, our mothers who are able budget a family on two hundred dollars a week. The Government needs to learn from them as to how to budget effectively.”

More than a billion dollars in public debt has all but severed borrowing options and forced the Belize Government to limit capital projects. And while the consultations have reflected that reality, according to a draft report, Belmopan is being called upon to reduce the cost of living, curb crime and violence, alleviate poverty, give greater support to agriculture and the productive sector and increase efficiency in government. Today Prime Minister Barrow indicated that with the help of the Caribbean Development Bank, the creation of a new lending facility will be one of first demonstrations of real change.

Prime Minister Dean Barrow
“We know that it is entirely possible, in this case it is necessary, for us to manage a development financing institution transparently, effectively and efficiently to the highest standards of accountability. C.D.B. will insist on no less and in any event, we are committed to this.”

That kind of commitment will require both dollars and a good deal of sense. And it is becoming increasingly clear that the U.D.P. administration is pinning its financial hopes on the newly established petroleum industry.

According to P.M. Barrow, production at Belize Natural Energy’s Spanish Lookout field is now at forty-four hundred barrels at day, and the additional revenues, topped up by a bigger tax bite, should help balance Government’s books.

Prime Minister Dean Barrow
“Because of the increases in the prices they get on the world market our share in terms of even the current tax arrangements is going to increase. In addition, we have signalled to them that we are going to impose a windfall tax. When we have finalised what that windfall tax will be, that will give us a clearer sense of what the revenue envelope will be and it is when we know what the revenue envelope will be that, of course, we can determine how much the constraints will affect us or whether in fact there is a degree of flexibility that we might not have expected except for what has happened with B.N.E.”

Dr. Carla Barnett
“Government doesn’t, as I understand it, want to introduce new taxes so we’re not talking about additional taxes. We’re talking about using the revenues that we have now in the best way possible.”

Janelle Chanona
“But when you look at the fuel cutbacks, R.R.D.s being nil…”

Dr. Carla Barnett
“Yes, all of that is being factored into the account. We are hoping, as the Ministry of Finance indicated, that at the very least we are going to be making up and then some the shortfall from Revenue Replacement Duty with what we expect to come from the additional taxes on petroleum.”

But while the oil and gas industry might relieve fuel pressures, food security is another issue altogether. The Barrow administration announced today that a twelve member commission, to be co-chaired by Allan Slusher and Senator Godwin Hulse, has been appointed to advise Government on a commodities development strategy.

Prime Minister Dean Barrow
“It won’t happen overnight and we need to get it right and that’s why we are going to appoint this national commission but perhaps now is the time for us finally and at long last to make the word flesh, to become truly the bread basket of the Caribbean and we’re keenly aware of the need for us to do this thing properly.”

Godwin Hulse, Senator
“It’s so easy it’s not funny. I mean you’re talking eight thousand, eight hundred and sixty-seven square miles and you’re talking three hundred thousand people. I continue to say look, what is self-sufficiency and what is food security for three hundred thousand people. You feed that in a stadium in Brazil so let’s not worry about us. We are incidental to it. Let’s grab the opportunities that are out there. The entire Caribbean, for example, have no land most of them and so they can’t produce even if they want. The islands are tiny. Belize is the place, it is doable, it can be done. We have to go back, particularly in rice, to the late seventies, early eighties when we shipped twenty-five containers a month into Europe and into the Caribbean. High quality U.S. Ray ban rice. That can be done again. There’s no question about it in my mind. Beans, corn; the same thing, cattle; the same thing. We ship cattle into Jamaica. We’ve been shipping into Guatemala. We’re trying to ship into Mexico. The policies need to be in place, financing in place and the commitment on the part of government to do it. In my mind it’s absolutely doable.”

Janelle Chanona
“And you are confident that the investor confidence is there?”

Godwin Hulse
“If the legislation is amended appallingly then because people want to know that when they put their money there is some security of that investment. This business of changing your mind or changing the rules is not amenable or conducive to improve the investment and increase the investment. But once that is in place, that structure is in place, yes.”

Closer to home, the devastating effects of Tropical Storm Arthur has highlighted Belize’s vulnerability to weather and according to P.M. Barrow, the full impact of the damage on his first budget is still uncertain.

Prime Minister Dean Barrow
“A lot will depend on how much help we get from outside. For example, I’ve seen a note from the U.N. from the rep who is in Salvador who came to visit telling of some of the measures they will take to assist us. Those measures so far don’t seem to include what she and I had discussed; that is an element for reconstruction of homes destroyed in the flooded areas. It’s that sort of thing that we have to get clear before we know exactly how much of the burden will be put on local resources.”

Joseph Waight
“We may not be able to do all that is required in the first year of the budget but certainly we expect to put in place some of the key high priority programs in a phased basis. So at the end of four, five years—and this will be an annual process—so that in four, five years we hope to have accomplished much of what we set out to do.”

And one of the things Government will definitely not be able to do this year is give public officers the pay increases promised by the Musa administration. However, the Prime Minister has committed to at least paying salary increments that were previously frozen. Reporting for News Five, I am Janelle Chanona.

If you would like to make further representation please contact the National Budget Consultation Team at 822-2345 or 822-3866.


Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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