IMF Consultation in Belize

Statement by the 2010 Article IV Consultation Mission to Belize

Press Release No. 10/273
July 1, 2010

 

Mario Garza, chief of the International Monetary Fund mission to Belize, issued the following statement today in Belmopan:

“An IMF mission conducted discussions on the 2010 Article IV consultation with Belize during June 21-July 1. The mission met with Prime Minister Dean Barrow, the government’s economic team, the private sector, and civil society. The mission thanks the authorities for their warm hospitality and the cordial policy discussions, which focused on the economic outlook for 2010 and the medium term, and the government’s macroeconomic strategy.

“Economic activity stagnated in 2009, as a result of the global slowdown and the lingering effects from the floods in 2008. Growth has resumed since late 2009, but the recovery is still narrowly based, while inflation appears to be picking up somewhat, driven by the rise in fuel prices. For 2010, the mission expects growth to resume modestly, and export prices and tourist receipts to recover slightly, allowing foreign reserves to stabilize at just over three months of imports of goods and services. Despite the recent tax revenue actions, the overall fiscal deficit is likely to widen in FY2010/11, owing largely to upward pressure on primary current spending and increased investment, while the public debt would remain high. The overall banking system appears liquid and well capitalized, but the mission is concerned about the rise in nonperforming loans (NPLs).

 “The consultation discussions centered on strategies to promote sustainable growth and reduce poverty. The mission underscored the need to strengthen fiscal and external buffers to deal with future shocks. Building on the recent revenue measures and in order to put the public debt-to-GDP ratio on a firm downward path, the primary fiscal surplus would need to be raised significantly over the medium term, by restraining the growth in current spending; prioritizing investment; and placing the pension system on a strong and sustainable footing. The mission also encouraged the authorities to press ahead with current plans to improve tax and customs administration.

“In the monetary and banking area, the mission welcomed recent reforms to improve the conduct of monetary policy, by relying more on market-based monetary instruments and further reducing non-remunerated reserve requirements. It encouraged the authorities to advance these reforms, which should help reduce intermediation spreads, while maintaining a disciplined monetary stance. The mission also advised the authorities to remain vigilant in their supervision of domestic and offshore banks, ensure that sufficient provisioning is made to cover NPLs, and further strengthen prudential regulations.  

“Upon its return to Washington, DC, the mission will prepare a staff report that is scheduled to be discussed by the IMF Executive Board in early September. It is expected that the staff report would be published shortly thereafter.”

Papaya Production Pilot Project

A pilot project on papaya production for small farmers was inaugurated this morning in the Pettville area in the Orange Walk district.  The pilot project comprises of five acres of papaya plantation and is being spearheaded by the Ministry of Agriculture along with the Taiwan Mission in Belize and the European Union through La Inmaculada Credit Union.  The project is to demonstrate that papaya farming is an investment opportunity for farmers to diversify within the agriculture sector in the north.  

Finance for the project is being offered by the European Union through La Inmaculada Credit Union Small Scale Enterprise in Agriculture and Tourism project.    

Celso Martinez is the president of the Orange Walk Farmer’s Association and thinks the pilot project is a great opportunity for others farmers to learn about papaya farming.

Technical support will be carried out by the Taiwan Mission in Belize. Belarmino Esquivel is the District Agriculture Coordinator and says that the objective is to train 50 farmers of the Orange Walk and Corozal districts in papaya farming and from which they will select the best farmers to continue papaya production; ensuring the best papaya for export.  

 

The good news is that the local exporters have recently had a demand for an extra ten containers to be exported per week. Wilbert Valencia represents Little Belize Exporters Ltd, the company that has agreed to purchase all export quality papayas produced from the five acres in order to meet his international demand.

Farmers receive approximately ten Belize dollars per box of papaya that is exported.   Esquivel says that each acre can give approximately 3 to 5 thousand boxes of papaya that can be exported.  There is a possibility of accessing further financing from Taiwan and other funding agencies for the establishment of an additional 30 acres of papaya.  The present pilot project is expected to run for three years.Reporting for Love News from Orange Walk I am Arturo Cantun.