Belize, a Country in Economic Crisis

Wednesday, February 23, 2005
Belize

017-11.700 N
087-35.880 W
Marine forecast for this location

Ahoy from Lighthouse Reef, Belize!

Last Friday we motored from the Tobacco Range to Lighthouse Reef in glassy seas. Our forward progress generated all of the winds that we would see that day. Oh well, it was a flat, calm passage, but I sure would like to eventually put the sails up! Since we arrived we've been diving 1-2 times per day, and as usual it's spectacular. The water is colder than the past...mid to upper 70s. That may not sound cold, but you get a chill after diving for an hour.

I've switched from film to digital underwater photography. While my old Sea & Sea camera was great, and in some ways superior to the new one, it could be months between taking a photo and being somewhere to get it developed. It's impossible to learn from your mistakes when you can't begin to remember what you did. Now I can shoot and go back to the boat and see how I did. Much better! And I can shoot a lot more as there's virtually no cost. Great! Oh, and I can also shoot underwater movies. Cool! Now I have no excuses...

Our plans are to hang out here until we have to renew our papers, which is in about 3 weeks. We're well stocked, so food shouldn't be an issue. However, I want you to think about stocking enough food to eat well for a month with no trips to the grocery store...Not an easy task. Sue has this provisioning thing down. Last night we had stir fried beef with black beans, the night before it was flank steak with dry rub, and then lasagna before that...No complaints here with the food!

Switching topics to the subject of this e-mail. When we got here we were quite shocked to see the state of the country. First off you need to understand that Belize is a country of about 265,000 people, or about the size of a medium sized city, but has a land area of 8,867 square miles. A lot of the people are located in cities, so much of the countryside is lightly populated.

The budget for Belize is about $45 million US dollars, and when the current prime minister presented his budget, he told the country that they were broke. A big part of this shortfall seems to revolve around last years sale of the state owned telephone company, BTL, to an American businessman. The sale was for about $47M US, but was bankrolled by the Belize government. Since the sale the company has been stripped of assets and the loan has been defaulted on with no payments made. Based upon forecast proceeds from the sale, Belize took loans to repay past debt (or line peoples pockets) and all of that money is gone. Now that the loan has defaulted, Belize is in a crisis.

In order to raise money, the government has raised fees and taxes on everything. There is now a $5 US pp/pd fee to visit or anchor in many of the nicest anchorages. This also extends to interior parks. The departure tax has gone from $20/pp to $35/pp. The fee to extend your passport has gone from $12.50/pp to $50/pp every 30 days. They did decrease that to $25/pp after someone wrapped them on the head and mentioned that all that they were doing was forcing the tourists out of the country. Sin taxes on things like cigarettes and alcohol have gone through the roof. There's a proposal to raise the tax on beer by 671%, meaning that a bottle of beer will cost $2 US and the average wage is $2.50/hr US. They now sell cigarettes in half packs because people can't afford a full pack. A new 8% sales tax has been implemented. Farmers are in deep trouble because produce rates are fixed, but their costs have gone through the roof. The government run fuel supply company is 3+ months and $22M US behind on payments, and there are concerns that the supply might be cut off. Clearly this country is in crisis.

It also appears that a big part of the problems are due to graft and corruption. A politician was just stopped in the US on the way to the Cayman's with $1M US in a briefcase. They were returned, but nothing seems to have been done to them. The government recently purchased a small jet, but from what I've been told, it's only used to fly to/from the Cayman's. In San Ignasio, the prime minister just gifted an acre of land to someone for $10K US. Unfortunately this land was in the center of town and has served as the town market for ages. That land is now being sold for $320K US...Stuff like this happens all of the time.

Belize is a beautiful country, but they need to understand that people don't need to come here. There's lots of competition for the tourist dollar, and they can price themselves right out of the market. I know many cruisers are avoiding Belize due to the new anchoring fees that they've implemented. Why on earth should I be charged a fee for swinging on an anchor and not using any resources? It sure chafes me the wrong way. What's also scary is that last year there was a huge push for people to leave their private sector jobs and to move into the tourism industry. Boy, that could backfire!

Anyhow, I'll get off my soapbox. It will be interesting to see what happens here. I'm sure that there's a lot of drama to be had. But we'll now return you to your normal programming.

-- Geoff & Sue
Log ID: 633

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