BELIZE BATTLES OVER SHARE OF TOURIST FEES

UNCLAS SECTION 01 OF 02 BELMOPAN 000072

SIPDIS

SIPDIS

DEPT FOR WHA/CEN (MACK)

E.O. 12958: N/A
TAGS: PGOV EIND BH
SUBJECT: BELIZE BATTLES OVER SHARE OF TOURIST FEES


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Summary
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1. A dispute between the Belize City Council (CitCo),the Belize
Tourism Board (BTB),and the Government of Belize (GoB) continues to
dominate the news. At issue is the division of the USD 7.00 head
tax every cruise ship passenger must pay to the GoB. While the GoB
is amenable to giving the CitCo a portion of the head tax, the CitCo
says their offer is not enough. It wants not only a share of the
head tax, but the autonomy to spend its share as it sees fit. End
summary.

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"Respectable Increase" in Tourists Presents a Mixed Picture
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2. The recent release of preliminary figures from the Belize
Tourism Board (BTB) - Belize's official tourism and tourist
information organization - indicates that 2006 showed a "respectable
increase" in visitor arrivals. Figures for January through November
2006 show a 2.9 percent increase in visitors arriving at Philip
Goldson International Airport, the country's primary port of entry
for overnight tourists. That number grows to 4.3 percent once other
ports of entry (i.e., the border points of Benque Viejo and Santa
Elena and the sea ports of Dangriga and Punta Gorda) are included.
BTB also reports that after the December numbers are calculated, the
organization expects the total number of such tourists entering
Belize in 2006 to approach 250,000.


3. The numbers for cruise ship arrivals, however, were
disappointing. According to BTB figures, less than 650,000 cruise
ship passengers visited Belize in 2006 - a significant drop from
2004 when BTB recorded over 850,000 arrivals. But since cruise ship
passengers spend less than one day in Belize (and, therefore, have
less opportunities to spend their U.S. dollars here),BTB continues
to focus on attracting more overnight visitors who traditionally
spend more while in the country.

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Butting Heads Over Head Tax
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4. All of this has been overshadowed by the current dispute between
BTB and the Belize City Council over the USD 7.00 head tax that is
collected from the passengers of every cruise ship that docks in
Belize. The dispute has reignited in the last few weeks in response
to citizens' complaints about the poor quality of Belize City
services and streets. Under current law, the head tax is divided
three ways: USD 1.60 to BTB, USD 1.40 to the Protected Areas
Conservation Trust (PACT),and the remaining USD 4.00 to the Fort
Street Tourism Village - an extensive strip of privately owned
waterfront stores and restaurants catering to cruise ship
passengers. The Belize City Council (CitCo),led by Mayor Zenaida
Moya, argues that it deserves a piece of the head tax pie because it
is mainly Belize City streets and services that are impacted by the
increased tourist traffic.


5. Two weeks ago, with little communication between the central
government administration (controlled by the People's United Party)
and the CitCo (all of whom are members of the opposition United
Democratic Party),Moya threatened unspecified but visible public
action such as blockage of streets leading to/from the tourist
village. Such action was avoided last week, when the GoB agreed to
allocate USD 1.00 of the USD 7.00 head tax to the Belize City
Council. However, the CitCo has yet to accept the deal because the
GoB's proposal calls for depositing the monies into a special
account in the name of the Belize City Tourism Development Fund, to
be administered by the Minister of Local Government and used for
tourism projects as specified by BTB. Thus far, Moya has objected
to the GoB's proposed oversight, preferring instead that the funds
be given directly to the CitCo to use as it sees fit. Moya and her
councilors planned to meet with her party's leadership over the
weekend to decide whether or not to accept the GoB's terms.

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Comment
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6. When it comes to tourism - a major industry in Belize - the GoB
appears to suffer from some sort of split personality. GoB leaders
trumpet the importance of the industry to the country's economy, but
fail to invest in the infrastructure that tourists (and Belizeans)
rely on. The head tax feud is no different. The Belize City
municipality has been suffering from a shortage of funds since the
current mayor and councilors took office last March. (Former mayor
David Fonseca admitted to taking several hundred thousand dollars in
salary and cash advances before leaving office, but no criminal
charges were filed). While a share of the head tax will certainly
benefit the CitCo, it presumably will benefit the national economy

BELMOPAN 00000072 002 OF 002


as well by making Belize a more attractive port for the cruise ship
industry. But partisan politics continue to trump any larger
vision. Municipal governments have very limited sources of revenue
outside the annual subjections controlled by central government.
This struggle for control of revenue, if successful, could be a
significant step toward more local autonomy. End comment.

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