BELIZE OFFICIAL INFLATION 2008 IS: 9%
The official inflation rate for Belize this year 2008 up to November has been quoted at 9%. This means the official inflation rate has increased on a rising curving graph, above that of the bank interest rates in CD’s or savings accounts. The net result is that the Belize currency is losing purchasing value and there seems no way to keep paper money as a savings investment within Belize.
The inflation rate for imported goods is over 60%. This has resulted in people investing in construction as a means of securing the value out of the paper currency being issued by the government. In Western Belize, there has been a steady construction growing industry for the past seven years that I have personally observed. Hardware stores and construction supplies have been doing a good business in Western Belize. Investors realize that imported construction materials keep increasing in cost and something built in construction real estate today, is worth more than the actual paper money of Belize. The rising inflation rate of things, particularly on locally produced goods, will probably see more people investing in construction projects. Paper money rapidly becoming worthless. Dairy herds of milk producing Holsteins seem like a good investment, as there is a national shortage of milk products. Pigs are always in short supply. There are a number of export opportunities for food products from Belize to sell abroad, both to nearby countries around Belize and to Venezuela who are predictably developing food shortages common to socialist countries, when the nationalization of mid-level businesses, removes the profit incentive to growth. The need inside Belize here; are the knowledge of cottage industry sized processing machinery sources and the skills training dissemination of how to do these product packaging processing food things. Dissemination of such knowledge is a big problem.
The main shipping port in Belize City down on the coast, run by Luke Espat is killing the exporting to Caribbean rim countries like Venezuela, exporters of bulk commodities out West report, because of high charges for passing small 20 ft containers from the gate to shipside.
( quoted at $500 usa per 200 yards on the dock, done with your own truck ) Would be exporters are exploring ways and means to utilize alternative shipping ports, like Barrios and Cortez, or even the Pacific coast. It could be lightering of containers by barge from Salt Creek Estate, or similar places, could cut costs of exporting for Belize investors. A way of reducing exorbitant shipping costs must be found. Smaller freight vessels maybe? Shallow draft and private docks?
The loss of value of the Belize government printed money is of serious consequence to development and it may be the world depression will even reach Belize, as inflation attacks and destroys our economy. We can look to Zimbabwe for lessons on alternative living examples of survival. A parallel black market, barter systems and such; look to be coming in vogue here in Belize.
The solutions to local inflation rates within Belize are well known, but ignored apparently by the new UDP government. Slow down the printing of money, ( money supply ), control the debt to GDP ratio, which has been going the wrong way this year of the new government, increase foreign reserves and lower interest rates for loans. Local inflation is caused by political decision making of the CABINET. It is a question of spending and priorities based on the political needs required by a political party machine. We are not yet as bad as Zimbabwe in this regard. Imported costs and the higher inflation of these incoming goods are out of our control, except in the realm of customs duties. Now that the EPA has been signed by our Prime Minister, imported food processing machinery technically should be cheaper from Europe with no customs duties on European imported goods. The trouble is, they do not manufacturer cottage industry sized machinery. India looks to be a possible source, though their metallurgy is poor. South American countries manufacture a lot of such items, but for some strange reason, our Belize foreign office, does not favor importing goods from South America and even the tourists from this area are prohibited by old last century colonial policies.
We need as a country to be moving a lot faster in the political and bureaucratic adjustment to world conditions than we are doing. Excuses are a dime a dozen!
Prime Minister Barrow of Belize
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