STATEMENT BY
THE ATLERNATE GOVERNOR FOR BELIZE
DR. CARLA BARNETT
Madam Chair, Honourable Prime Ministers, Members of the Board of Governors of the
Caribbean Development Bank (CDB), President Bourne, Members of the Board of Directors,
Management and Staff of the Bank, Ladies and Gentlemen:
I am honoured to address this esteemed gathering on behalf of the substantive Governor for
Belize, the Honourable Dean Barrow, Prime Minister of Belize. Prime Minister Barrow, regretfully, is
unable to be here and has asked me to convey his best wishes for a productive meeting.
On behalf of my delegation, I wish to express our appreciation to the Government and People of
Canada, and especially to the City of Halifax, for the warmth of your welcome and the gracious
hospitality you have extended to us during our stay. We feel most welcome and warm, cool climate
notwithstanding.
We would like, as well, to thank the conference organisers from CDB and from Canada on the
exemplary arrangements for the meeting. You have worked very hard to make our environment
conducive to a successful meeting and you have succeeded splendidly.
We would like to congratulate Brazil on being accepted into membership of the Bank. We look
forward to welcoming the Brazilian representatives to formally take their seat around our table in due
course.
Madam Chair, CDB has had yet another year of outstanding service in the development our
countries. We congratulate the President and Staff of the Bank on that achievement. The Bank has
focused on the issues of poverty reduction, improving economic governance, disaster mitigation, and
regional integration. Our countries have benefitted from financing which has enabled us to expand road
networks, improve the educational opportunities for our young people and children, and address other
issues more specific to our individual territories and circumstances.
In Belize, for example, the Basic Needs Trust Fund (BNTF) continues to make significant inroads in the fight against poverty. Residents in rural communities across Belize now enjoy improved
standards of living as a direct result of improved access to basic services and infrastructure made
available through the BNTF programme. CDB was also ready and available to assist Belize last year with
emergency financing as we dealt with the impact of Hurricanes Dean and Felix on our coasts.
Although there have been many successes and tangible evidence of growth and development in
the Region resulting directly from the Bank’s interventions, we still have far to go. In this context, I
would like to make some comments on some issues that we feel should rank high among the Bank’s
strategic priorities as we move ahead.
-2Madam Chair, we are meeting to discuss issues relating to the Bank’s continued operations in
our Caribbean region under difficult global economic circumstances characterised by uncertainties in the
international financial markets and rising fuel and food prices. Indeed, the rising cost of fuel and food,
have triggered unrest in various parts of the world, including parts of the Caribbean. These
developments, if not quickly and adequately addressed, threaten to increase poverty, social dislocation
and economic instability. There is reason for grave concern. However, it is our view that continued
partnership with the CDB can help us to mitigate the impact these developments will have on our
economies.
Strategies to tackle the rising price of fuel and food should address the need for both immediate
and longer term solutions. Our countries are already responding to the crisis by reducing taxes on food
and other goods in an effort to ease the burden on citizens. But this is a short-term response. As
international prices continue to rise, as they are expected to, any reduction in taxes could soon be offset
and domestic prices could resume rising. Some countries are also seeking to promote agriculture focusing
specifically on food production by providing, for example, tax relief on agricultural inputs. Generally,
these short-term strategies imply immediate budgetary impacts. We therefore encourage CDB to work
with member countries to address the immediate response to the food crisis, less we erode the gains we
have made in fiscal performance.
There is a need for quick disbursing lines of credit to permit farmers to purchase fertilizers and
other increasingly costly inputs to ensure that, at the very least, existing production levels do not fall
because of lack of critical inputs. Farmers in Belize have already pointed out that fertilizers, most of
which are by-products of the petroleum industry, have more than doubled in price in less than a year.
Farmers in the rest of the region undoubtedly face the same reality. Therefore, the urgency of developing
long-term solutions cannot be overstated. These solutions should be based on careful study and
collaboration among regional and international agencies, governments and the private sector. In this
regard, the discussion on the global food crisis which took place at this meeting was timely, and the
commitment of CDB to further the discussion with member countries and agencies is very welcome.
We strongly recommend that this work be given high priority. The rising food prices are a
threat to social and economic stability; but they also provide a unique opportunity to create conditions for
sustainable agricultural development in the Caribbean if the necessary investments are made, and quickly.
Madam Chair, the effort of the Canadian authorities to implement a green approach to the
arrangements for this Meeting is to be congratulated. In the Caribbean, there is a commitment to develop
sustainable approaches to economic development. In Belize, for example, over 40% of our land area and
a significant area of territorial sea have been given protected area status. But there are daily challenges
that arise from the desire for development that will create jobs, reduce poverty and improve the standard
of living of ordinary people.
In addition to the challenges that arise from our own development activities, the impact of
climate change - which is largely the result of activities of already developed countries, - complicates our
quest for development. Increasingly powerful hurricanes, flooding and coastal erosion, cause significant
physical destruction of economic infrastructure with consequential instability in growth, fiscal and debt
indicators. These vulnerabilities are critical constraints to future development.
In the present context of rising fuel prices, the focus on the environment also presents an
opportunity for Caribbean countries to move more decisively in the direction of alternative and clean
energy. We are therefore pleased that CDB, in its new strategic planning process, is seeking to place even
greater priority on the issues of environment, disaster mitigation, adapting to climate change, including
renewable energy.
-3Madam Chair, there is almost universal agreement that job creation per dollar invested is
significantly greater in small and medium enterprises than in large firms. This makes small and medium
enterprise development an obvious strategic focus for sustainable growth and poverty reduction. Yet,
over the years, across the Region there has not been enough focus on enterprise development either at the
national or regional levels. Throughout the Region there is a scarcity of financing for micro, small and
medium-sized enterprises (SMEs). This is not a sector that is easily served by the traditional commercial
banks or the newer types of financial institutions which have developed in some of our more developed
member countries. We would like to invite CDB, in the context of developing its next strategic plan, to
focus on SMEs with a view to developing new approaches and strategies for developing the sector.
Madam Chair, our meetings this year have included further discussions on the seventh
replenishment of the Special Development Fund. This Fund is essential to ensuring sustained positive
impact of the BNTF programme, not only in Belize, but in the rest of the Region and especially in Haiti
where the need is greatest. Although the global economic environment seems rather uncertain at this
time, the Government of Belize hopes that negotiations will be successful and that members will continue
to support the Bank in its efforts to assist our countries to address the critical issues that stand in the way
of sustained economic and social development.
Madam Chair, as I close, please allow me to say just a few words about recent developments in
Belize. In Belize, GDP growth slowed 1.6% in 2007 as production and prices for key export
commodities, such as farmed shrimp, fell significantly. The small but increasingly important petroleum
sector grew; but a 7.6% decline in commodity exports, coupled with a 4.9% increase in imports, caused
the current account deficit to expand. Fortunately, foreign direct investment in tourism, real estate,
aquaculture and electricity led to a surplus in the capital account, which more than offset the current
account deficit and resulted in an increase in gross international reserves. These reserves stood at about
2.3 months of merchandise imports at the end of 2007. While this is a notable improvement, the still low
level signals the continued vulnerability of the Belize economy.
In the first quarter of 2007, Belize successfully restructured its external commercial debt,
reducing interest payments and deferring repayments to the 2019-2029 period. The concurrent approval
of a policy-based loan by CDB assisted Belize in this process which sought to place Belize on a medium
to long-term sustainable path. While the debt restructuring removed the threat of imminent crisis, fiscal
and monetary restraint is still required to ensure fiscal and debt sustainability into the future, to protect the
fixed exchange rate and build the foreign reserves.
The new Government elected into office in February this year is fully cognisant of the delicate
economic situation. It has pledged to implement, in particular, prudent fiscal policies set in the context of
a sustainable medium-term framework. It has publicly stated its intention to restrict borrowing to bilateral
and multilateral sources; and only as required to support important public sector investment projects as
Government seeks to implement a development agenda focused on human resource development, poverty
reduction, human security and sustainable use of environmental resources. The Government of Belize has
committed to strengthening the framework for governance, a process that has already begun in the three
months since the elections. In this regard, the focus is on strengthening oversight processes and the
institutionalisation of more inclusive governance. There will be many challenges as we continue to
pursue our development goals. We are however committed to moving forward, with the help of CDB.
Madam Chair, as I close, please allow me to once again express thanks to you for your effective
management of this Meeting, to our gracious hosts and, on behalf of the Government and People of
Belize, sincere gratitude to the President and Staff of CDB for the support and assistance provided over
the years. We look forward to a successful and productive year.
Thank you.