Identifier
Created
Classification
Origin
07BELMOPAN5
2007-01-04 19:49:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Belmopan
Cable title:
BELIZE: PM MUSA OPTIMISTIC ABOUT 2007
how-toVZCZCXRO9327 RR RUEHGR DE RUEHBE #0005/01 0041949 ZNR UUUUU ZZH R 041949Z JAN 07 FM AMEMBASSY BELMOPAN TO RUEHC/SECSTATE WASHDC 0122 INFO RUEHGT/AMEMBASSY GUATEMALA 0007 RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE RUCNCOM/EC CARICOM COLLECTIVE RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS SECTION 01 OF 02 BELMOPAN 000005
SIPDIS
SIPDIS
SENSITIVE
DEPT FOR WHA/CEN (MACK, CRAIG)
TREASURY FOR IA/WHA (LEVINE)
E.O. 12958: N/A
TAGS: PGOV ECON EFIN BH
SUBJECT: BELIZE: PM MUSA OPTIMISTIC ABOUT 2007
Ref: 06 Belmopan 45
This cable is sensitive but unclassified. Please handle
accordingly.
-------
Summary
-------
UNCLAS SECTION 01 OF 02 BELMOPAN 000005
SIPDIS
SIPDIS
SENSITIVE
DEPT FOR WHA/CEN (MACK, CRAIG)
TREASURY FOR IA/WHA (LEVINE)
E.O. 12958: N/A
TAGS: PGOV ECON EFIN BH
SUBJECT: BELIZE: PM MUSA OPTIMISTIC ABOUT 2007
Ref: 06 Belmopan 45
This cable is sensitive but unclassified. Please handle
accordingly.
--------------
Summary
--------------
1. (U) In his New Year's Message, published in the December 31
edition of The Reporter (one of Belize's weekly newspapers),Prime
Minister and Minister of Finance Said Musa was optimistic about the
country's future - particularly in the areas of the economy and the
border dispute with Guatemala. End Summary.
--------------
Belize's "Robust" Economy
--------------
2. (U) The message - which covered a full page and included a photo
of a smiling Prime Minister Musa - began with a review of the high
points of 2006. Namely, the country's celebration of 25 years of
independence, its rich and diverse culture, and the fact that Belize
avoided the damage and destruction brought on by natural disasters.
End summary.
3. (U) Musa then moved on to his vision for the future, stating
that "there is a strong feeling of optimism" in Belize. He
applauded his government's "bold strategic decision" to restructure
the public debt despite the "negative noise" from the critics.
(Note: Belize's debt, which was close to 100 percent of GDP, had to
be restructured in order to avoid a sovereign default. End note).
Musa noted that the debt restructuring plan had been received
positively by the international financial community and, as a result
of this and other fiscal decisions, the country's deficit is down
and there is a primary surplus of three percent of GDP. (Note:
There has been no public announcement yet regarding acceptance of
the proposed debt restructuring by existing creditors. End note.)
4. (U) Musa also touted the strength of the Belize dollar, which
has been pegged to the U.S. dollar since 1976 (Note: The current
rate of exchange is US $1 equals BZ $2. End note) and pointed to
economic expansion and job creation as proof of his success in
overcoming the nation's economic challenges. Specifically, Musa
highlighted the agricultural industry - including citrus, sugar,
livestock, and poultry - as strong performers, emphasized continued
investment in the tourism sector, and stressed that prospects in the
country's nascent oil industry are "very encouraging" and will
provide additional growth to the economy. (Note: The GoB recently
passed an amendment to the Income and Business Tax Act which imposes
- retroactively to January 2006 - a 40 percent tax on income for
companies engaged in petroleum operations in Belize [reftel]. End
note).
--------------
Belize vs. Guatemala
--------------
5. (U) Next, Musa turned to the border dispute between Belize and
Guatemala, which has been going on for decades. Musa stated that
Belizeans have been "anguished" by Guatemala's territorial claim but
predicted that during 2007 the two nations would "likely reach
agreement on a course that will bring an end to the Guatemalan
claim" within a few years. He went on to say that Belize would soon
be rid of a "problem" that has been a "thorn in our side for two
decades." Musa said that all parties had agreed to resettle
Guatemalan citizens living in the Belize-claimed town of Santa Rosa
to a site within Guatemala, and he expected the resettlement to be
complete in the first half of 2007. (Musa also mentioned the
important role of the OAS, as well as the financial assistance of
Mexico, the U.S., and the United Kingdom, in moving forward on this
dispute). Although Musa stated that relations between the two
countries are "better than they have ever been," he noted that he
did not believe the border dispute would ever be resolved by
negotiation. Instead, he expected that the issue would have to be
addressed by an "independent international tribunal."
--------------
Domestic Issues - An Afterthought?
--------------
6. (U) Although the economy and the border dispute were covered in
more detail, Musa also touched on a few domestic issues such as
BELMOPAN 00000005 002 OF 002
crime, education, poverty, and health care. He stated that
education would continue to be top priority for the government, and
pledged new investments in education that would focus on "character
building and positive attitudes for productive living." He noted
that the National Health Insurance program would expand to include
the entire population during 2007 and sang the praises of ongoing
rural development and poverty alleviation programs. Finally, Musa
said that crime remains a "serious challenge" and that the community
must provide the police and the Belize Defence Force with full
cooperation in order to maintain the peace. Unfortunately, Musa's
address made no mention of how his government would fund these
programs or address the growing crime problem in Belize.
--------------
Comment
--------------
7. (SBU) While the PM was trumpeting his success in avoiding a
sovereign default, he failed to mention that he did so by borrowing
more money from Venezuela (US $50 million),the Inter-American
Development Bank (US $25 million),and the Caribbean Development
Bank (US $25 million) and imposing a retroactive tax that could
discourage future oil exploration as well as other foreign direct
investment. In addition, in his review of the Belize-Guatemala
border dispute, Musa fails to address the potentially negative
effect of his government's support (and active campaigning) for
Venezuela during the recent UNSC vote.
8. (SBU) Comment continued. During 2006, Musa's government faced a
number of financial scandals, including the collapse of the
country's housing and agricultural development bank and the suspect
dealings of the Social Security Board. Musa makes no mention of
these issues in his message nor does he offer any explanation as to
how he will fund his domestic agenda. Elections must be held by
March 2008 (although there have been some rumblings from the
opposition to call early elections) and Musa's promises to invest
heavily in education, health care, and poverty reduction are likely
part of the pre-election promises. End comment.
DIETER
SIPDIS
SIPDIS
SENSITIVE
DEPT FOR WHA/CEN (MACK, CRAIG)
TREASURY FOR IA/WHA (LEVINE)
E.O. 12958: N/A
TAGS: PGOV ECON EFIN BH
SUBJECT: BELIZE: PM MUSA OPTIMISTIC ABOUT 2007
Ref: 06 Belmopan 45
This cable is sensitive but unclassified. Please handle
accordingly.
--------------
Summary
--------------
1. (U) In his New Year's Message, published in the December 31
edition of The Reporter (one of Belize's weekly newspapers),Prime
Minister and Minister of Finance Said Musa was optimistic about the
country's future - particularly in the areas of the economy and the
border dispute with Guatemala. End Summary.
--------------
Belize's "Robust" Economy
--------------
2. (U) The message - which covered a full page and included a photo
of a smiling Prime Minister Musa - began with a review of the high
points of 2006. Namely, the country's celebration of 25 years of
independence, its rich and diverse culture, and the fact that Belize
avoided the damage and destruction brought on by natural disasters.
End summary.
3. (U) Musa then moved on to his vision for the future, stating
that "there is a strong feeling of optimism" in Belize. He
applauded his government's "bold strategic decision" to restructure
the public debt despite the "negative noise" from the critics.
(Note: Belize's debt, which was close to 100 percent of GDP, had to
be restructured in order to avoid a sovereign default. End note).
Musa noted that the debt restructuring plan had been received
positively by the international financial community and, as a result
of this and other fiscal decisions, the country's deficit is down
and there is a primary surplus of three percent of GDP. (Note:
There has been no public announcement yet regarding acceptance of
the proposed debt restructuring by existing creditors. End note.)
4. (U) Musa also touted the strength of the Belize dollar, which
has been pegged to the U.S. dollar since 1976 (Note: The current
rate of exchange is US $1 equals BZ $2. End note) and pointed to
economic expansion and job creation as proof of his success in
overcoming the nation's economic challenges. Specifically, Musa
highlighted the agricultural industry - including citrus, sugar,
livestock, and poultry - as strong performers, emphasized continued
investment in the tourism sector, and stressed that prospects in the
country's nascent oil industry are "very encouraging" and will
provide additional growth to the economy. (Note: The GoB recently
passed an amendment to the Income and Business Tax Act which imposes
- retroactively to January 2006 - a 40 percent tax on income for
companies engaged in petroleum operations in Belize [reftel]. End
note).
--------------
Belize vs. Guatemala
--------------
5. (U) Next, Musa turned to the border dispute between Belize and
Guatemala, which has been going on for decades. Musa stated that
Belizeans have been "anguished" by Guatemala's territorial claim but
predicted that during 2007 the two nations would "likely reach
agreement on a course that will bring an end to the Guatemalan
claim" within a few years. He went on to say that Belize would soon
be rid of a "problem" that has been a "thorn in our side for two
decades." Musa said that all parties had agreed to resettle
Guatemalan citizens living in the Belize-claimed town of Santa Rosa
to a site within Guatemala, and he expected the resettlement to be
complete in the first half of 2007. (Musa also mentioned the
important role of the OAS, as well as the financial assistance of
Mexico, the U.S., and the United Kingdom, in moving forward on this
dispute). Although Musa stated that relations between the two
countries are "better than they have ever been," he noted that he
did not believe the border dispute would ever be resolved by
negotiation. Instead, he expected that the issue would have to be
addressed by an "independent international tribunal."
--------------
Domestic Issues - An Afterthought?
--------------
6. (U) Although the economy and the border dispute were covered in
more detail, Musa also touched on a few domestic issues such as
BELMOPAN 00000005 002 OF 002
crime, education, poverty, and health care. He stated that
education would continue to be top priority for the government, and
pledged new investments in education that would focus on "character
building and positive attitudes for productive living." He noted
that the National Health Insurance program would expand to include
the entire population during 2007 and sang the praises of ongoing
rural development and poverty alleviation programs. Finally, Musa
said that crime remains a "serious challenge" and that the community
must provide the police and the Belize Defence Force with full
cooperation in order to maintain the peace. Unfortunately, Musa's
address made no mention of how his government would fund these
programs or address the growing crime problem in Belize.
--------------
Comment
--------------
7. (SBU) While the PM was trumpeting his success in avoiding a
sovereign default, he failed to mention that he did so by borrowing
more money from Venezuela (US $50 million),the Inter-American
Development Bank (US $25 million),and the Caribbean Development
Bank (US $25 million) and imposing a retroactive tax that could
discourage future oil exploration as well as other foreign direct
investment. In addition, in his review of the Belize-Guatemala
border dispute, Musa fails to address the potentially negative
effect of his government's support (and active campaigning) for
Venezuela during the recent UNSC vote.
8. (SBU) Comment continued. During 2006, Musa's government faced a
number of financial scandals, including the collapse of the
country's housing and agricultural development bank and the suspect
dealings of the Social Security Board. Musa makes no mention of
these issues in his message nor does he offer any explanation as to
how he will fund his domestic agenda. Elections must be held by
March 2008 (although there have been some rumblings from the
opposition to call early elections) and Musa's promises to invest
heavily in education, health care, and poverty reduction are likely
part of the pre-election promises. End comment.
DIETER