PRIME MINISTER COMMENTS ON ISSUES

August 16, 2006

A number of issues of national interest were discussed with Prime Minister Said Musa today. The Prime Minister was the guest on Love FM’s morning show. The Prime Minister spoke on the issue of Belize’s external debt. He said the need for re-profiling the debt did not come as a surprise to our creditors. He went on to discuss the process that is being followed. 

Hon Said Musa: Prime Minister of Belize

“The way we are going about it is that we are approaching it in a market friendly way as we say, we are asking them let us sit down and discuss this matter we are laying out all the figures to you as we have done we are putting all the data and projections on the Central Bank website for everybody to see these numbers have been cross checked with the international financial institution that work with us and there is no question about the accuracy and the integrity of the numbers. And the question is what does this debt re arrangement entails; well what it entails first of all is providing a detailed analysis of the situation, preparation of financial and economic projections which are now public as I said and then consultation with the creditors to discuss our debt situation and establish a general  understanding as to what is needed to put Belize’s external debt on a sustainable path that is the objective to put our debt on a sustainable path. We have always met our debt obligations we have never defaulted and we will continue to pay our debt so long as the cash flow allows us to.”

 The Prime Minister responded in this manner when asked if the Belize dollar will be de-valued. 

Hon Said Musa: Prime Minister of Belize

“The answer is a resounding “No” no because it doe not make sense it will not assist Belize in any way it will put our debt burden in a an even worst position and when you look at the structure of Belize’s economy, our imports the cost of our imports far exceeds our exports this has been the historical situation from the time of independence and before, we import mare than we export. Devaluation will just increase the cost of living which will make the situation worst because we are spending more on what we import than what we export, so how will it help the situation? Even the IMF has concluded that even in Belize the exchange rate pegged of two to one has served Belize because it affords stability in the system, where as if you have devaluation and you don’t have floating currency you will end up with a situation where it starts maybe at two to one and who knows where it will stop.” 

Rene Villanueva: Love FM

“The people are saying that it is not sustainable the two to one peg.” 

Hon Said Musa: Prime Minister of Belize

“Well it is a difficult situation but we have been able to sustain it from 1976 and there is absolutely no reason to change it and as I said in our discussions with the IMF they too have agreed that in the case of Belize the exchange peg has serve Belize well and we should do everything possible to maintain it and that is certainly the policy of my Government.” 

Prime Minister Musa commented on the report submitted by the Senate select committee on Social Security as well as recommendations made by his Government to safeguard the fund. 

Hon Said Musa: Prime Minister of Belize

“I am hoping to go to the House within the ninety days to strengthen the transparency in the operation the fund to strengthen the fund itself of Social Security in the long term based on the published actuer reports all these things will require legislative measures but we have already carried out the recommendations the eleven of them are in the process of being carried out. Several have been carried out in terms of calling on the board to terminate the services of the General Manager, well the Chairman resigned so we are moving towards clearing up all of these recommendations and in addition the ones that I mentioned. The whole objective of it is to first of all to expand the safety net of Social Security for the Belizeans workers and their families that’s the bottom line. In order to achieve that we have to improve the integrity of the fund to ensure it’s sustainable for the long haul to make sour that when people retire their pension money is there for them, sickness benefits other benefits are available and I must say when you look at the big picture we tend to get skewed in our thinking  to think that because of these problems that SSB went through that the whole system is rotten. The truth of the matter is Social Security in Belize served this country well for twenty five years just as the life of our nation. Over these past twenty five years its come a long way the actual fund has expanded to over two million dollars it I is safe and secure and sustainable but we have a lot of work still to do to ensure that we maintain it protect it and strengthen it.” 

Prime Minister Musa also spoke of the assistance that is being provided to the Belize City Council after meeting with the Mayor and hearing her concerns. 

Hon Said Musa: Prime Minister of Belize

“Sometime ago the Government paid off on behalf of the City Council a debt with Scotia Bank over four hundred thousand dollars similarly there is another debt of the City Council at the Belize Band. What we have done is to say that these loans should have been repaid through subventions  deductions, instead we are saying we are going to spread it out for you over three years as a result they will get back a large portion of the deduction that was made and in fact a cheque was sent I  think yesterday certainly the letter was sent stating that they would get the deduction refunded of over sixty thousand dollars. In addition to that because it is being spread out now almost all the subvention will continue to be paid to the City Council. The City Council is getting a subvention of almost one point five million dollars for the year from the Government, it is the same subvention that was given to the previous PUP City Council no reduction, so that is being paid which works to about a hundred and twenty odd thousand dollars a month because it is spread out the debt financing they will be getting most of that hundred and twenty thousand every month. I think before the sixty odd thousand was being deducted that will no longer continue. Secondly in addition to the one point four million in addition to the other assistance that Government is giving such as we have been in discussions with the Tourist Board to reactivate an assistance the gave to the previous council between September 2005 and March of this year. It was some assistance through the head tax and the Tourist Board collects a dollar sixty U.S. head tax right now from the cruise tourist. It is estimated that if they give half of that to the Belize City Council like that amount that was give for the six months to the previous council it would amount to over a million dollars for the year and my understanding is that the board will be meeting on Friday and they should be continuing that assistance to the council which means like I said an additional million dollars or so will be going to the City Council in the course of the year I should make it clear that this does not require the approval of the Government it’s a decision of the Tourist Board because it is their head tax they are collecting and they are sharing it they will be sharing it with the City Council.” 

The Prime Minster was also asked about what he needs to do in preparation for the next General Elections in 2008. 

Hon Said Musa: Prime Minister of Belize

“Certainly we have to work harder in order to restore credibility we have to work harder we have to straighten out what needs straightening in Government we need to communicate better with the people we need to explain issues better and we need to share with the people our challenges as well as our successes. I think the heart of the problem right now is that we have been so tied up with the difficult issues and challenges of Governance of governing that we have not been communicating, explaining sharing the sacrifices with our people so that they understand and they can appreciate what we are going through and yes we need to continue to inspire and we need to remind our people of how far we have come as nation in building this nation and yes how much there is yet to be done. And we need to shoe them despite all the adversity that the People’s United Party still offers the best hope for moving this country forward for creating a better life for our people. Now it is a tall order and I will be the first to concede and yes we need to remind people that we are living in a good country, I know I have been critized for saying so but it is a reality. When we look around us in the world today in out own region or anywhere else in the world Belize is a good country and unless we ourselves believe that we will forever be dragged down we will have this load on our shoulders which we don’t need as a people, of doom and gloom. Strategy of pessimism bringing us down as a people so we can’t realize our true worth and our true value to move ahead as a people and as a nation, I think that’s the task I have before me as a leader as the Prime Minister and I believe with the support with the team spirit in our Government and our party and with the support of our people but we have to restore that hope with the support of our people but we have to restore that hope and confidence in them that is the order.” 

Prime Minister Said Musa.

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