PRESIDENTS OF TWO OF OUR NEIGHBORS IN BELIZE, HAVE CALLED PUBLICLY FOR DECRIMINALIZATION OF SOME DRUGS. PARTICULARLY MARIJUANA!
The trouble in Belize, is neither of our TWO major political parties have taken the marijuana problem to heart and done the same here in Belize. The lack of LEADERSHIP in Belize is something the more astute population, more than HALF of voting adults in Belize is frustrating the peace and tranquility of our small nation. Amsterdam, Holland has shown such a program not only works, but reduces the amount of users. YET, in Belize, Guatemala and Mexico, NOBODY in leadership positions CAN SEEM TO LEAD, what is a criminal scourge created by the DEMAND of DRUGS in the USA and their mixed up crazy policies toward MARIJUANA. So why in Belize cannot either UDP party leader DEAN BARROW, or the PUP leader Francis Fonseca, get off the pot and let us try something different, particularly as AMSTERDAM, HOLLAND shows it works. We need INNOVATIVE LEADERS that work, not just collect salaries and perks.
Friday, January 20, 2012
Thursday, January 19, 2012
LAND, POWER AND POVERTY, a book by Professor, Charles D. Brockett in 1987 on GUATEMALAN HISTORY.
WITH THE ELECTION OF A RETIRED ARMY GENERAL IN GUATEMALA AS PRESIDENT, VOWING TO RULE WITH AN IRON FIST. STUDENTS OF GUATEMALAN HISTORY WOULD DO WELL TO READ: The book; LAND, POWER, AND POVERTY, ending with events of historical significance in 1987. Not so long ago! ( 20 years ) The book written by Professor Charles D. Brockett in 1987 depicted an era of ruthless exploitation of the citizens of Guatemala by the military.
This book can also be read online. Since that time in 1987, the ARMY was downsized and the Generals of that era were retired. Guatemala since then, is not recognizable today, as the same country, described in this book of Guatemalan History. Advances for the general population have been many, and the infra-structure projects have brought modern living to even the most remote rural citizens of Guatemala. Today, Guatemala is a modern country, with living standards on a par with those in the USA. All this success has been due to a government run by civil society. Like any civil government, there are scandals, crime, Presidents who traditionally steal through FAKE, government programs, to build their private bank accounts in Panama. The normal events of a civil government. Judge for yourself! Nothing under civil government has been, and probably could not be as BAD AS THAT, that went before, under military rule; mostly back then 20 years ago, and financed by the depredations of the USA.
It is the end of the Mayan Calendar, one can only wonder at the political changes to come for Guatemala, in the GREAT CYCLES of change, predicted by the Mayan Calendar, great wheel, due to hit Guatemala in 2013?
__________________________________
The first casualty of PEACE for Guatemala, will probably be the 2004, LAW; that set the limit for a GUATEMALAN military budget, at .33 of GDP. In truth, Guatemala has no need for a military. They do need FEDERAL POLICE SWAT TEAMS AND TRAINED "GANG SUPPRESSION UNITS". They do not need the military EVER AGAIN, if they are wise?
_________________________________________________
Peace accords in 1996 ( 15 years ago ) that ended 36 years of fighting between leftist rebels and government forces ordered the army be slashed in size, dwindling from a 50,000-strong force to a huge overbloated 17,000 soldiers today, for a military that has no purpose, since there is no external enemy and Guatemala is friends with all her neighbors. Dozens of military bases, including one in Alta Verapaz, were closed. Just 15 years ago. The strides in improvement in the material standard of living in Guatemala, including rural areas; can only be described as gigantic under civilian only rule. Guatemalans today live on a par with citizens of the USA and Canada. The Guatemalan military is still very oversized for the limited acceptable functions it could be used for, in a peaceful society, with a growing GDP. Indeed, a Guatemalan military of less than 75 people, organized in Emergency Disaster Management, and Crime Suppression Units, would be more successful and acceptable than the current 17,000 soldier army. Which has no external enemy to fight. Current levels of crime are mostly traced to the effect of USA DRUG GANGS operating in the USA, whose need for transport from South America to the USA for illicit drugs, drive the turmoil in Central America. The crime ridden USA gangland society, is the cause of the biggest problems in Central America.
A regular turnover of corrupt police officers would be more successful, than increasing the military budget in Guatemala; which already has exceeded the law of 2004, supposedly limiting military costs to .33 of GDP. Currently military spending is at .4 of GDP. The wrong way to go!
Soldiers earn as little as $150 a month and are hired on a temporary basis. High salaries offered by the drug cartels often convince troops to switch sides. The Zetas, originally formed by Mexican army deserters, have been known to recruit elite Guatemalan troops known as Kaibils who are trained in jungle warfare and infamous for brutal civil-war era abuses. The occasional massacres within Guatemala, by these elements of USA drug gangs horrify the ordinary citizens. Professional training and funding of small, mobile, elite Gang Suppression Units are the solution needed in Guatemala and the funds wasted on a bloated 17,000 military, should be re-allocated and the military which has no purpose in Guatemalan society, downsized to a maximum of 100 persons or less. This huge Guatemalan military, too big for the country, with no acceptable purpose, can only if resurrected lead to further turmoil, abuses and civil war in the future.
This book can also be read online. Since that time in 1987, the ARMY was downsized and the Generals of that era were retired. Guatemala since then, is not recognizable today, as the same country, described in this book of Guatemalan History. Advances for the general population have been many, and the infra-structure projects have brought modern living to even the most remote rural citizens of Guatemala. Today, Guatemala is a modern country, with living standards on a par with those in the USA. All this success has been due to a government run by civil society. Like any civil government, there are scandals, crime, Presidents who traditionally steal through FAKE, government programs, to build their private bank accounts in Panama. The normal events of a civil government. Judge for yourself! Nothing under civil government has been, and probably could not be as BAD AS THAT, that went before, under military rule; mostly back then 20 years ago, and financed by the depredations of the USA.
It is the end of the Mayan Calendar, one can only wonder at the political changes to come for Guatemala, in the GREAT CYCLES of change, predicted by the Mayan Calendar, great wheel, due to hit Guatemala in 2013?
__________________________________
The first casualty of PEACE for Guatemala, will probably be the 2004, LAW; that set the limit for a GUATEMALAN military budget, at .33 of GDP. In truth, Guatemala has no need for a military. They do need FEDERAL POLICE SWAT TEAMS AND TRAINED "GANG SUPPRESSION UNITS". They do not need the military EVER AGAIN, if they are wise?
_________________________________________________
Peace accords in 1996 ( 15 years ago ) that ended 36 years of fighting between leftist rebels and government forces ordered the army be slashed in size, dwindling from a 50,000-strong force to a huge overbloated 17,000 soldiers today, for a military that has no purpose, since there is no external enemy and Guatemala is friends with all her neighbors. Dozens of military bases, including one in Alta Verapaz, were closed. Just 15 years ago. The strides in improvement in the material standard of living in Guatemala, including rural areas; can only be described as gigantic under civilian only rule. Guatemalans today live on a par with citizens of the USA and Canada. The Guatemalan military is still very oversized for the limited acceptable functions it could be used for, in a peaceful society, with a growing GDP. Indeed, a Guatemalan military of less than 75 people, organized in Emergency Disaster Management, and Crime Suppression Units, would be more successful and acceptable than the current 17,000 soldier army. Which has no external enemy to fight. Current levels of crime are mostly traced to the effect of USA DRUG GANGS operating in the USA, whose need for transport from South America to the USA for illicit drugs, drive the turmoil in Central America. The crime ridden USA gangland society, is the cause of the biggest problems in Central America.
A regular turnover of corrupt police officers would be more successful, than increasing the military budget in Guatemala; which already has exceeded the law of 2004, supposedly limiting military costs to .33 of GDP. Currently military spending is at .4 of GDP. The wrong way to go!
Soldiers earn as little as $150 a month and are hired on a temporary basis. High salaries offered by the drug cartels often convince troops to switch sides. The Zetas, originally formed by Mexican army deserters, have been known to recruit elite Guatemalan troops known as Kaibils who are trained in jungle warfare and infamous for brutal civil-war era abuses. The occasional massacres within Guatemala, by these elements of USA drug gangs horrify the ordinary citizens. Professional training and funding of small, mobile, elite Gang Suppression Units are the solution needed in Guatemala and the funds wasted on a bloated 17,000 military, should be re-allocated and the military which has no purpose in Guatemalan society, downsized to a maximum of 100 persons or less. This huge Guatemalan military, too big for the country, with no acceptable purpose, can only if resurrected lead to further turmoil, abuses and civil war in the future.
Wednesday, January 18, 2012
A STUDY OF GUATEMALA MILITARY NEEDS !
A STUDY OF GUATEMALA MILITARY NEEDS !
Guatemala has no EXTERNAL ENEMIES. Guatemala is now part of an expanding peaceful, economic GDP growth, with ALL the Central American countries, including the neighbor to the NORTH, Mexico.
EMPLOYMENT, GDP GROWTH, CIVIL RIGHTS, all these things have exploded to the advantage of GUATEMALAN SOCIETY, since the GENERALS were forcibly retired and the MILITIARY DOWNSIZED. Without an external enemy GUATEMALA has absolutely NO NEED for a military, just like SUCCESSFUL COSTA RICA.
That said; GUATEMALA probably could have a showcase military and this would be for basic functions. The PRESIDENTIAL PALACE AND ceremonial performances for STATE functions, like the VATICAN does. There are a need for military personel to fight DROUGHT, DISTRIBUTE FOOD TO THE NEEDY, help people after a LANDSLIDE, EARTHQUAKE, VOLCANO ERUPTIONS, and this sort of thing. DISASTER RELIEF being their major function.
The same unit used for above functions, could also be used to fight DRUG GANGS. We are not talking a lot of members of drug gangs. Maybe less than 50 violent people. A proper police unit, like a Gang Suppression Police Unit, or SWAT TEAM can deal with drug gangs. In total, there is probably NO JUSTIFICATION to hire, train and pay for more than 60 military personel in TOTAL. Two or THREE platoons. 45 military sized people is probably more than adequate for GUATEMALA.
To HIRE and establish a bigger military in GUATEMALA would be a WASTE of scarce TAX REVENUES. MONEY THAT COULD BE SPENT MORE WISELY IMPROVING INFRA-STRUCTURE and public services.
Guatemala has no EXTERNAL ENEMIES. Guatemala is now part of an expanding peaceful, economic GDP growth, with ALL the Central American countries, including the neighbor to the NORTH, Mexico.
EMPLOYMENT, GDP GROWTH, CIVIL RIGHTS, all these things have exploded to the advantage of GUATEMALAN SOCIETY, since the GENERALS were forcibly retired and the MILITIARY DOWNSIZED. Without an external enemy GUATEMALA has absolutely NO NEED for a military, just like SUCCESSFUL COSTA RICA.
That said; GUATEMALA probably could have a showcase military and this would be for basic functions. The PRESIDENTIAL PALACE AND ceremonial performances for STATE functions, like the VATICAN does. There are a need for military personel to fight DROUGHT, DISTRIBUTE FOOD TO THE NEEDY, help people after a LANDSLIDE, EARTHQUAKE, VOLCANO ERUPTIONS, and this sort of thing. DISASTER RELIEF being their major function.
The same unit used for above functions, could also be used to fight DRUG GANGS. We are not talking a lot of members of drug gangs. Maybe less than 50 violent people. A proper police unit, like a Gang Suppression Police Unit, or SWAT TEAM can deal with drug gangs. In total, there is probably NO JUSTIFICATION to hire, train and pay for more than 60 military personel in TOTAL. Two or THREE platoons. 45 military sized people is probably more than adequate for GUATEMALA.
To HIRE and establish a bigger military in GUATEMALA would be a WASTE of scarce TAX REVENUES. MONEY THAT COULD BE SPENT MORE WISELY IMPROVING INFRA-STRUCTURE and public services.
BELIZE IMPORTS $8,916,000 materials from RUSSIA in 2011.
BELIZE IMPORTS RUSSIAN CRUDE OIL AND GAS FOR 2011
FOR 2011, crude oil and gas imports from RUSSIA to BELIZE were $8,916,000 usa. About 12,826,000 lbs.
At a cost of $1.38 Bz currency per pound.
FOR 2011, crude oil and gas imports from RUSSIA to BELIZE were $8,916,000 usa. About 12,826,000 lbs.
At a cost of $1.38 Bz currency per pound.
BELIZE - RAJKOT, INDIA, A SOURCE OF TECHNICAL ADVISORS FOR FOUNDRY SKILLS EDUCATION?
A SOURCE OF TECHNOLOGY TEACHERS FOR BELIZE IN SKILLS NEEDED TO BREAKOUT IN THE LIGHT MANUFACTURING ECONOMY OF OUR EXPONENTIALLY GROWING POPULATION. WHO WILL PAY? MAYBE THE UN ?
In Rajkot city, there are 600 foundries. All foundry people from owners to thousands of unskilled workers working in foundries know very well all foundry technology. Even clever workers understand what material must be added how much to get better quality cast iron. Most of the owners of foundries are also not educated beyond primary or secondary education. Most of the workers are not educated in schools. The skill is acquired only by actually working in foundry.
V K DESAI
AADHUNIK GLOBAL ENERGY
TINYTECH PLANTS
TAGORE ROAD
RAJKOT 360002
INDIA
PHONES
91 281 248 0166 (office)
91 281 246 7552 (fax)
91 92 27 60 65 70 (mobile)
EMAIL energy@tinytechindia.com
tinytech@tinytechindia.com
WEB www.tinytechindia.com
In Rajkot city, there are 600 foundries. All foundry people from owners to thousands of unskilled workers working in foundries know very well all foundry technology. Even clever workers understand what material must be added how much to get better quality cast iron. Most of the owners of foundries are also not educated beyond primary or secondary education. Most of the workers are not educated in schools. The skill is acquired only by actually working in foundry.
V K DESAI
AADHUNIK GLOBAL ENERGY
TINYTECH PLANTS
TAGORE ROAD
RAJKOT 360002
INDIA
PHONES
91 281 248 0166 (office)
91 281 246 7552 (fax)
91 92 27 60 65 70 (mobile)
EMAIL energy@tinytechindia.com
tinytech@tinytechindia.com
WEB www.tinytechindia.com
Tuesday, January 17, 2012
THE DIFFERENCE BETWEEN CAYMAN AND BELIZE IS HONESTY, ETHICS , SECURITY AND PROMPT SERVICE?
An article from today's Commentary section of the Washington Times, page B4
Richard Rahn, The Washington Times:
SAN PEDRO, Belize
Cayman is rich, and Belize is poor. Why? Both are small Caribbean countries with the same climate and roughly the same mixed racial heritage, and both were English-speaking British colonies. Belize (the former British Honduras) received its independence in 1981, while Cayman is still not fully independent but is self-governing at the local level, with its own currency, laws and regulations.
Belize should be richer: It has a larger population than Cayman (345,000 as contrasted with Cayman’s 54,000). Belize has a much larger and more varied land area with many more natural resources, including gas and oil, and some rich agricultural land that Cayman lacks. Both have nice beaches, but Belize has the second-largest barrier reef in the world after Australia and also has Mayan ruins. Yet Cayman, with fewer points of interests, has done more to attract tourists.
Back in the early 1970s, Cayman was as poor on a per capita basis as is Belize today. Both countries had ambitions to be tourist and financial centers. Cayman succeeded and has about six times the real per capita income of Belize. What did Cayman do right and Belize do wrong?
Perhaps most important is that Cayman had and maintained a competent and honest judicial system, which gave foreign investors confidence that their property would be protected. Cayman also has a very low crime rate. Tourists and other visitors walk around freely day or night in Cayman without fear. Unfortunately, the same cannot be said for many parts of Belize, where crime is often a problem. In addition, many judges in Belize are poorly trained, incompetent and, in some cases, corrupt. These issues cause foreign investors to consider higher-risk factors for projects in Belize as contrasted with Cayman.
The Washington Times The Washington Times
Belize has a more investor-friendly tax system than the United States, but Cayman has no corporate or individual income taxes on noncitizens and citizens alike - advantage Cayman. The problem for Belize is that it is competing with the likes of Cayman, Bermuda, the Bahamas and the British Virgin Islands, but not the United States. Also, the regulatory environment in Cayman is largely free of corruption, which is not true in Belize.
The latest Index of Economic Freedom ranks Belize as the 77th most economically free country in the world (out of 179). If Cayman were large enough to be ranked, it almost certainly would be in the top 10. There is a very high correlation between economic freedom and per capita income. Any country can decide to become more free. Belize ranks a miserable 93 out of 183 countries ranked by the World Bank’s DoingBusiness project.
It is obvious why Cayman is rich and Belize is poor, and it comes down to one word: governance. If Belize would clean up its courts, fully protect property rights and adopt the best economic practices of its competitors, it could quickly become rich. For instance, it takes an average of 44 days to get all of the required permits to open a new business. In some countries, such as Estonia, Singapore and even the Commonwealth of Virginia in the U.S., the required paperwork to open a business can be done online. Thus, days have been reduced to just a few hours.
There is no reason any country has to remain poor. Countries are not poor because of climate, lack of natural resources or race. Countries as locationally varied as Singapore, Mauritius, Korea, Chile, Estonia and Cayman have become relatively rich over the past few decades. Those countries that are still relatively poor are poor because they have not put in place the necessary institutions, political structures and policies.
The United States and a number of other wealthy nations are becoming less free and thus, not surprisingly, are growing more slowly.
Belize could become rich and the U.S. and Cayman could become poor. It all depends on whether the political entities elect wise and courageous leaders.
Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.
Richard Rahn, The Washington Times:
SAN PEDRO, Belize
Cayman is rich, and Belize is poor. Why? Both are small Caribbean countries with the same climate and roughly the same mixed racial heritage, and both were English-speaking British colonies. Belize (the former British Honduras) received its independence in 1981, while Cayman is still not fully independent but is self-governing at the local level, with its own currency, laws and regulations.
Belize should be richer: It has a larger population than Cayman (345,000 as contrasted with Cayman’s 54,000). Belize has a much larger and more varied land area with many more natural resources, including gas and oil, and some rich agricultural land that Cayman lacks. Both have nice beaches, but Belize has the second-largest barrier reef in the world after Australia and also has Mayan ruins. Yet Cayman, with fewer points of interests, has done more to attract tourists.
Back in the early 1970s, Cayman was as poor on a per capita basis as is Belize today. Both countries had ambitions to be tourist and financial centers. Cayman succeeded and has about six times the real per capita income of Belize. What did Cayman do right and Belize do wrong?
Perhaps most important is that Cayman had and maintained a competent and honest judicial system, which gave foreign investors confidence that their property would be protected. Cayman also has a very low crime rate. Tourists and other visitors walk around freely day or night in Cayman without fear. Unfortunately, the same cannot be said for many parts of Belize, where crime is often a problem. In addition, many judges in Belize are poorly trained, incompetent and, in some cases, corrupt. These issues cause foreign investors to consider higher-risk factors for projects in Belize as contrasted with Cayman.
The Washington Times The Washington Times
Belize has a more investor-friendly tax system than the United States, but Cayman has no corporate or individual income taxes on noncitizens and citizens alike - advantage Cayman. The problem for Belize is that it is competing with the likes of Cayman, Bermuda, the Bahamas and the British Virgin Islands, but not the United States. Also, the regulatory environment in Cayman is largely free of corruption, which is not true in Belize.
The latest Index of Economic Freedom ranks Belize as the 77th most economically free country in the world (out of 179). If Cayman were large enough to be ranked, it almost certainly would be in the top 10. There is a very high correlation between economic freedom and per capita income. Any country can decide to become more free. Belize ranks a miserable 93 out of 183 countries ranked by the World Bank’s DoingBusiness project.
It is obvious why Cayman is rich and Belize is poor, and it comes down to one word: governance. If Belize would clean up its courts, fully protect property rights and adopt the best economic practices of its competitors, it could quickly become rich. For instance, it takes an average of 44 days to get all of the required permits to open a new business. In some countries, such as Estonia, Singapore and even the Commonwealth of Virginia in the U.S., the required paperwork to open a business can be done online. Thus, days have been reduced to just a few hours.
There is no reason any country has to remain poor. Countries are not poor because of climate, lack of natural resources or race. Countries as locationally varied as Singapore, Mauritius, Korea, Chile, Estonia and Cayman have become relatively rich over the past few decades. Those countries that are still relatively poor are poor because they have not put in place the necessary institutions, political structures and policies.
The United States and a number of other wealthy nations are becoming less free and thus, not surprisingly, are growing more slowly.
Belize could become rich and the U.S. and Cayman could become poor. It all depends on whether the political entities elect wise and courageous leaders.
Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.
BELIZE BANKING NEWS!
BANKING NEWS OF BELIZE, JANUARY 17, 2012.
Compliments of the Amandala newspaper in Belize:
Posted: 16/01/2012 - 11:17 PM
Author: Adele O. Trapp - aotrapp@amandala.com.bz
The Central Bank of Belize says that its role is encouraging financial stability and economic growth in Belize. Among its tasks are: providing economic advice to the Government of Belize; providing banking services to commercial banks, the Government of Belize and public-sector organizations; issuing monetary notes and coins in Belize; buying, selling and otherwise dealing in foreign exchange; and managing Belize’s foreign reserves; among other responsibilities.
This week, we spoke with Central Bank Governor Glenford Ysaguirre on a range of matters which concern the bank’s portfolio.
Banking sector troubles
The governor broadly addressed the challenges facing the banking sector, particularly the high rate of non-performing loans (NPL) attributable to losses in sectors such as real estate and tourism.
He noted that under normal circumstances, the prudential benchmark of 5% NPL is encouraged, but Belize banks, on average, have been dealing with NPL rates way above that.
“Given what happened in 2008,” said Ysaguirre, speaking of the global financial/economic crisis, “I think everybody has jumped above the prudential rate.”
He said that an NPL rate of 8-9% would be a comfortable number under the circumstances. Some banks are high and some are low, depending on the sectors they finance.
“The average for the [banking] system right now is around 15%,” said the Governor, pointing out, however, that for the period 2008 to 2009, it was as high as 17 to 18 percent. “It is coming down, and it is important to us that it is trending in the right direction.”
He told us that some banks have bitten the bullet and absorbed losses, and so they can move with a portfolio that is cleaner, while others are still going through that process.
Delayed responses hurt
He noted that as Belizeans, “We have difficulty to accept change... Many in the business sector did not react as quickly to the situation; a lot of us sat down and hoped things would rebound but they won’t get back...for some time now.” He said that the quicker we come to that realization and try to do things to improve – diversify business and move on to other forms of activities, the better.
“We tend to lag behind the region in adjustment to change when we are faced with these external shocks,” said Ysaguirre.
Central Bank’s intervention
The Government told us that the Central Bank introduced most recently in December an increase in the provisions that banks would have to pass for non-performing loans.
“In the past, a loan that was fully secured – whether by mortgage or interest in some asset – would not have required the bank to pass any provision;” however, he said, the banks are now being required to increase their provisioning—funds held to offset losses—for 70% for such loans.
This, he said, is to ensure that banks have enough of a buffer and have enough provision to offset losses, thereby bringing the provisioning requirements up to international standard.
Banks would also be forced to recognize their losses on bad loans at an earlier date, and they would have to more readily acknowledge when they have come to the point where there is no reasonable opportunity to recover a loan.
Receivership of Port of Belize
We asked the Governor to comment on the Port of Belize receivership by Private Investment Limited, an overseas entity in the Turks and Caicos. We told him that the business owner, Luke Espat, had raised questions of the legality of what has been transpiring, and his attorney, Arthur Saldivar, had told us that PIL is not even a bank and should not be petitioning upon a financial document.
Ysaguirre said that while indeed, PIL is not a bank, what the originating bank did in selling off the loan to PIL it can do, “as long as that is part of the terms and conditions that the borrower signed on to.”
He added that, “In most markets, that is one of the methods banks use to rid themselves of troubled assets -- sell them at a discount,” Interestingly, however, at the time the loan was moved from the Belize Bank it was a performing loan, and that was one of the objections the Central Bank had with the repackaging of the debts. He told us that what happened to the loan after it was transferred is something he has no information about.
Ysaguirre also said that whereas there are procedures, guidelines, regulations in place to ensure related parties do not take advantage of clients, by accessing information for personal gain at the expense of their clients, in this case the indication is that the customer, Espat, was in agreement.
Thoughts on National Bank
The Central Bank Governor also shared with us his views on Prime Minister Dean Barrow’s proposal to turn the Development Finance Corporation (DFC) into a full scale national bank, to compete with the commercial banks.
Ysaguirre said that there would be issues with capitalization and ownership of the bank.
“If the idea is to turn the DFC into a full-scale commercial bank to start accepting deposits that would be owned by the private sector, there is nothing wrong with that,” he said, but added that, “there may be some difficulties with respect to a bank owned by the government.”
Ysaguirre noted that “Confidence and credibility is always an issue.”
If the DFC transformation does come to pass, he said, the Central Bank would also be regulating that institution and regulations would have to be drafted up to ensure it has the kind of autonomy that would give Belizeans the comfort and confidence that it would be run in the right way.
He said that there would have to be some distancing between administration of the bank and the government for it to be a success.
Can GOB pay super-bond and pay BTL, BEL compensation?
We asked the Governor: How do our numbers look?
He told us that the monies from the proceeds of the sale of shares in Belize Telemedia Limited (BTL) are set aside. The final compensation figure would still have to be determined, and if the courts issue a ruling for a compensation figure higher than the proceeds of the sale of shares, he said, meeting all those payments “would create some fiscal pressure on the government, but that’s to be determined.”
Remittances
Governor Ysaguirre said that remittances have ceased to be a major foreign revenue source for Belize.
“With the advent of the money transfer agents, we have flat-lined with remittances,” he said. “We almost send out most of what would be coming in through these transfer agencies – the vehicle for remittances to come into Belize.”
He added that there has been pressure on the Central Bank, which also regulates money transfer agents, for permission to buy foreign currency from the domestic market to satisfy the demand for the transfers out.
(Story from the Tuesday, January 10, 2012 edition of The Adele Trapp Show, which simulcasts at 7:30 p.m. on KREM TV and KREM Radio.)
Compliments of the Amandala newspaper in Belize:
Posted: 16/01/2012 - 11:17 PM
Author: Adele O. Trapp - aotrapp@amandala.com.bz
The Central Bank of Belize says that its role is encouraging financial stability and economic growth in Belize. Among its tasks are: providing economic advice to the Government of Belize; providing banking services to commercial banks, the Government of Belize and public-sector organizations; issuing monetary notes and coins in Belize; buying, selling and otherwise dealing in foreign exchange; and managing Belize’s foreign reserves; among other responsibilities.
This week, we spoke with Central Bank Governor Glenford Ysaguirre on a range of matters which concern the bank’s portfolio.
Banking sector troubles
The governor broadly addressed the challenges facing the banking sector, particularly the high rate of non-performing loans (NPL) attributable to losses in sectors such as real estate and tourism.
He noted that under normal circumstances, the prudential benchmark of 5% NPL is encouraged, but Belize banks, on average, have been dealing with NPL rates way above that.
“Given what happened in 2008,” said Ysaguirre, speaking of the global financial/economic crisis, “I think everybody has jumped above the prudential rate.”
He said that an NPL rate of 8-9% would be a comfortable number under the circumstances. Some banks are high and some are low, depending on the sectors they finance.
“The average for the [banking] system right now is around 15%,” said the Governor, pointing out, however, that for the period 2008 to 2009, it was as high as 17 to 18 percent. “It is coming down, and it is important to us that it is trending in the right direction.”
He told us that some banks have bitten the bullet and absorbed losses, and so they can move with a portfolio that is cleaner, while others are still going through that process.
Delayed responses hurt
He noted that as Belizeans, “We have difficulty to accept change... Many in the business sector did not react as quickly to the situation; a lot of us sat down and hoped things would rebound but they won’t get back...for some time now.” He said that the quicker we come to that realization and try to do things to improve – diversify business and move on to other forms of activities, the better.
“We tend to lag behind the region in adjustment to change when we are faced with these external shocks,” said Ysaguirre.
Central Bank’s intervention
The Government told us that the Central Bank introduced most recently in December an increase in the provisions that banks would have to pass for non-performing loans.
“In the past, a loan that was fully secured – whether by mortgage or interest in some asset – would not have required the bank to pass any provision;” however, he said, the banks are now being required to increase their provisioning—funds held to offset losses—for 70% for such loans.
This, he said, is to ensure that banks have enough of a buffer and have enough provision to offset losses, thereby bringing the provisioning requirements up to international standard.
Banks would also be forced to recognize their losses on bad loans at an earlier date, and they would have to more readily acknowledge when they have come to the point where there is no reasonable opportunity to recover a loan.
Receivership of Port of Belize
We asked the Governor to comment on the Port of Belize receivership by Private Investment Limited, an overseas entity in the Turks and Caicos. We told him that the business owner, Luke Espat, had raised questions of the legality of what has been transpiring, and his attorney, Arthur Saldivar, had told us that PIL is not even a bank and should not be petitioning upon a financial document.
Ysaguirre said that while indeed, PIL is not a bank, what the originating bank did in selling off the loan to PIL it can do, “as long as that is part of the terms and conditions that the borrower signed on to.”
He added that, “In most markets, that is one of the methods banks use to rid themselves of troubled assets -- sell them at a discount,” Interestingly, however, at the time the loan was moved from the Belize Bank it was a performing loan, and that was one of the objections the Central Bank had with the repackaging of the debts. He told us that what happened to the loan after it was transferred is something he has no information about.
Ysaguirre also said that whereas there are procedures, guidelines, regulations in place to ensure related parties do not take advantage of clients, by accessing information for personal gain at the expense of their clients, in this case the indication is that the customer, Espat, was in agreement.
Thoughts on National Bank
The Central Bank Governor also shared with us his views on Prime Minister Dean Barrow’s proposal to turn the Development Finance Corporation (DFC) into a full scale national bank, to compete with the commercial banks.
Ysaguirre said that there would be issues with capitalization and ownership of the bank.
“If the idea is to turn the DFC into a full-scale commercial bank to start accepting deposits that would be owned by the private sector, there is nothing wrong with that,” he said, but added that, “there may be some difficulties with respect to a bank owned by the government.”
Ysaguirre noted that “Confidence and credibility is always an issue.”
If the DFC transformation does come to pass, he said, the Central Bank would also be regulating that institution and regulations would have to be drafted up to ensure it has the kind of autonomy that would give Belizeans the comfort and confidence that it would be run in the right way.
He said that there would have to be some distancing between administration of the bank and the government for it to be a success.
Can GOB pay super-bond and pay BTL, BEL compensation?
We asked the Governor: How do our numbers look?
He told us that the monies from the proceeds of the sale of shares in Belize Telemedia Limited (BTL) are set aside. The final compensation figure would still have to be determined, and if the courts issue a ruling for a compensation figure higher than the proceeds of the sale of shares, he said, meeting all those payments “would create some fiscal pressure on the government, but that’s to be determined.”
Remittances
Governor Ysaguirre said that remittances have ceased to be a major foreign revenue source for Belize.
“With the advent of the money transfer agents, we have flat-lined with remittances,” he said. “We almost send out most of what would be coming in through these transfer agencies – the vehicle for remittances to come into Belize.”
He added that there has been pressure on the Central Bank, which also regulates money transfer agents, for permission to buy foreign currency from the domestic market to satisfy the demand for the transfers out.
(Story from the Tuesday, January 10, 2012 edition of The Adele Trapp Show, which simulcasts at 7:30 p.m. on KREM TV and KREM Radio.)
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