Saturday, January 2, 2010

BELIZE ECONOMIC OUTLOOK 2010 AND 2011

McFee the anti-virus multi-millionaire, who sold his company, plowed his fortune into real estate in the USA and ended up selling it for .10 cents on the dollar, to clear the decks for his retirement in Belize. Albeit with a lot fewer millions. Says he has never been happier and starting new projects here in Belize. He is well regarded in local circles as a down to earth guy.


BELIZE ECONOMICAL OUTLOOK 2010 TO 2011

World prices tumbled with the world recession, but commodity prices are expected to increase again by the Fall of 2010. Oil prices should rise and so would Belize energy costs. There is as of yet, no study on the electrical power needs of Belize, and projections, point to a need to tripling electrical power capacity in twelve years. The only viable alternative seems to be a Chinese 100 megawatt nuclear reactor power plant. Can the private sector secure this type of investment is the question?
Sugar prices are expected to rise more. Innovation in the USA is being held back by a slow PATENTING PROCESS and the expense of the PATENT process in the USA. Japan and the USA are the world leaders in Technological innovation.
It is doubtful that there will be any innovative experimental start on Ethanol production in Belize during 2010. Mostly due to roadblocks by existing legislation and the bureaucracy administration and the incapacity of the UDP government to deal with such changing economic issues in a timely manner.
In vehicles, HYDROGEN seems to be the most likely successful alternative to gasoline and diesel fuels. Natural gas will not make an impact over the next two years in Belize, until the USA develops the distribution system, enabling vehicle manufacturing up there from scratch. We could produce ethanol here, but the taxation and regulatory issue is the biggest obstacle. Gasoline hybrid electrical vehicles do not seem to be practical. The range of a battery driven car is limited to around 100 kms before recharging. The obstacle to hydrogen vehicles seem to refueling stations in the USA. Though in small Belize, this may not be that big an obstacle? Honda and Toyota are probably the best source of hydrogen vehicles.
Tourism is likely to suffer in 2010 on the through traveling tourist sector, using overland transportation. The Government has not yet enabled either the Western Border, or the Southern Border into Guatemala by public bus transportation rules. This is hurting tourism development. The paved Guatemalan highway from the Peten, to Melchor de Menchos and our Western border is nearly finished and running about 3 months behind projected scheduling. The new bridge across the Rio Mopan to Guatemala is expected to finish in 2010 requiring rebuilding of the Customs and Immigration setup, once again. Probably for 2011 to 2012? The Belize FREE ZONE on the Western border will stay idle through 2010, but may get government attention in 2011. Commercial Belize entrepreneurs are waiting patiently to buy lots for constructing warehouses, small factories and shops here in this stalled FREE ZONE development. Cruise ship tourism is likely to stay strong. Up scale expensive package tourism is expected to stay strong. The kind were you have three or four service people tending to each guest. Low budget hotels and hostels are suffering in occupancy levels. There needs to be a wider array of adventures offered to tourism in Belize. What that will be, is up to the innovators and investors.
Around the world, businesses will continue down sizing and accompanying bankruptcy through 2010, though the projections are for a slow incremental economic growth worldwide. New businesses will be mostly in technological innovation, in everything from electronics to food processing exporting. Employment careers will shift to new developing sectors in new industries in the USA.
The local economy is expected to stay the same, as half of the $200 borrowed UDP millions was spent in 2009 and the other half ( $100 million ) is to be spent in 2010 says our Prime Minister Barrow. Most of this is to maintain the Belize civil service bureaucracy costs and some little infra-structure. The USA economy is already recovering and re-structuring. This will continue over the next two years. Most of those who lost their jobs and homes in the USA due to credit card debt family policies, will not be re-hired and stay in the ranks of the welfare type people. New hires are going to be newly educated and trained young people. The older ones are just out of luck.
Growth in Belize is expected to stay level, or get a little better. The economy contracted to the real GDP during the recent recession, which is slightly negative growth and not staying up with population expansion. The loan borrowing of Belize governments continues to distort the real GDP, as foreign government loans are input into the economy. The cost of government is the biggest negative factor for self sustainability. Our foreign loan bonds are now real JUNK BONDS. The UDP government of Belize has still not given us any economic report on the state of the nation. We are mightily curious as to the Debt ratio to the new GDP? We are expecting something like 120% debt of GDP? Despite the government debts, the economy of Belize is chugging along merrily, growing with the population, albeit at a slightly slower pace.
In the words of McFee in a recent interview, the retired USA SOFTWARE VIRUS millionaire living in Belize. He never saw such a place as Belize, for entrepreneurial development opportunities. He is already diddling with new business entrepreneurial ideas in retirement and joined the Board of Directors of private Galen University here in Western Belize. I'm 72 going on 73 years myself, and just wish I was an octopus, to take advantage of all the business opportunities myself. The challenges are fun!

1 comment:

Philip said...

Bed and breakfast is commonly the services of the hostel.

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