Ambassador Robert J. Dieter’s Remarks at the American Chamber of Commerce Annual General Meeting (May 14, 2008)
2008 Speeches
Ambassador Robert J. Dieter’s Remarks at the American Chamber of Commerce Annual General Meeting (May 14, 2008)
Belikin Brewery Ladyville Good evening and thank you for the opportunity to speak with you about business and investments in Belize. Tonight, I will share with you some observations of the current economic picture and highlight crucial issues Belize must address for it own economic development; issues where the U.S. Embassy is already making an impact.
Belize continues to face economic challenges in the short-term. Preliminary figures indicate that the Belize economy slowed in 2007, recording real growth of 3.0% as compared to 5.8% in 2006. The deceleration was attributed to lower shrimp and textile production and the adverse impact of Hurricane Dean on tourism and agricultural exports during the latter part of the year.
With the successful debt restructuring in February 2007, Standard and Poor’s raised Belize’s long-term foreign currency credit rating to “B” -- the highest level since August 2004. However, financial pressures continue due to the high level of domestic and foreign debt. At the end of 2007, the total public sector debt was 97.6% of GDP and foreign direct investments into the country were down from the prior year. The inflation rate is estimated to have eased from 4.3% in 2006 to 2.4%, though recent increases in food prices may add inflation pressure. Belize’s monetary policy is expected to remain tight keeping the cost of capital relatively high -- the weighted average lending rate was 14.3% in December 2007.
A quick look at the political situation reveals a stable environment post-election. The recent government transition took place calmly and democratically and is indicative of the mature, stable political environment that exists in Belize.
That is certainly attractive to potential foreign investors. Since the elections, the Prime Minister has called for more transparency and accountability. Additionally, two programs the government has discussed relate to creating a consumer protection agency and developing a Master Plan for tourism in Belize. In March, President Bush invited Prime Minister Barrow and several newly elected Caribbean leaders to Washington, reaffirming the U.S. commitment to the region and confirming the region's importance to the United States. The discussion focused on trade, renewal of the Caribbean Basin and other regional trade incentives, security, crime and drug trafficking, and tourism.
We saw continued cooperation and trade between the United States and Belize in 2007. As you know, the United States is Belize’s largest source of direct foreign investment and we remain Belize’s number one trading partner providing 33.5% of Belizean imports and accounting for 27.2% of exports. Tourism will continue to be the main driver of economic growth in 2008, and some 85% of Belize’s tourist visitors are from the United States. I applaud the recent announcement by the BTB of a plan to restore historic sections of Belize City because this will improve the tourist experience and hopefully lead to more spending of tourist dollars. Belize needs to consider itself from a tourist’s perspective, looking critically at crime, pollution, and physical amenities available to visitors. Of course, such efforts take substantial investment by the tourism industry here and abroad Another sector where U.S. investors play an important role is oil production. Oil exports last year comprised 28% of total exports and accounted for 5.6% of GDP. Developing the country’s energy potential requires an investment climate that is predictable, stable and encourages risk capital. These large-scale efforts also require clear laws and regulations so that investors in the tourism, petroleum and other sectors can be prepared to follow the laws of the country they work in, and be reasonably sure that the laws will not be changed arbitrarily in ways that impair investment.
So, what does this all mean for investors and what else can be done to encourage economic growth? For starters, Belize must invest more in its “human capital.” Education plays an integral role in creating successful democracies and strong economies. It cannot be stated too often that an educated public is crucial in promoting good governance, economic growth, and development in any nation.
One of the privileges – indeed joys - of my job is the opportunity to meet with Belizean students across the country to promote education and to stress the importance of staying in school. I am a strong advocate for educational development and I see this as a crucial element of this country’s future: 44.3% of the population is under the age of 18 and educating and providing economic opportunities for this demographic is a challenge. As you know, many Belizeans continue to be educated in the United States and the Embassy makes every effort to promote awareness of educational opportunities in the U.S. Additionally, we continue to focus our work at the Embassy on educational programs for students studying locally. Encouraging education and training for Belizeans will improve the quality of the workforce and provide greater potential for your businesses as well. In this regard, the educational system should promote technical high schools that develop much-needed skills – like the Ladyville Technical High School and the Julian Cho Technical High School in Punta Gorda.
Over the past year in addition to my school visits to encourage students to pursue their education, members of the Embassy community have:
- Organized a summer reading assistance program for ESL primary school students in Belmopan.
- Partnered with NDACC to support an after school anti-drug program that encourages boys to become interested in sports, stay off the streets, and to stay in school. 60 boys have participated in the program which has already demonstrated success.
- Worked closely with the Ministry of Education to sponsor a primary school poster contest that educates younger children about the risks of HIV.
- Sponsored exchange programs to develop young leaders and enable Belizeans to attend training programs in the U.S. In fact, many of the officials currently in government attended programs such as ‘Role of ethics in Government and Business’ and ‘Grassroots Democracy’ in the past.
These programs are only a beginning and similar programs need to continue in the coming year, especially in view of the realities that exist in Belize.
One of these realities is globalization. I am often surprised by negative characterizations of the global economy. -- yet this process brings tourists to your country – an industry that now provides one in four jobs. And the growing oil industry that contributes so much to the local economy is being developed through substantial foreign investment. Considered in another context, the late Andy Palacio is an excellent example of how Belize benefits by participation in the phenomenon of globalization. Through dedication, talent and hard-work, Andy Palacio found a niche in the music world – but without a global market, his music may have been enjoyed only in Belize, perhaps even only in the south. It is globalization that allowed the world to appreciate his talent and hear his music. This also illustrates another point – that to take full advantage of the positives of globalization, Belize needs to strengthen its institutional capabilities and competitiveness. This includes respecting international laws that come with participating in a globalized economy such as enforcing intellectual property rights. After all, what would Belizeans think if they stepped off a plane in LA and saw pirated copies of Watina selling for two dollars - seeing this great musician’s work illegally copied and distributed without any royalties going to him?
The U.S. Embassy and AmCham will accompany Belize along this path and collectively try to address issues to help ensure that not only the interests of American investors but all market participants are protected, helping to contribute to a stronger local economy. We have already seen the benefits of this collaborative effort in the boating and tourism sector. The American Chamber of Commerce is in a position not only to look after American investors in the short-run, but more importantly to influence the long-term direction of Belize for the better.
Thank you for inviting me to speak today and I wish you much success in your future business endeavors in Belize.