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BBN Year in Review 2021 Part III. Business and Economy

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Posted: Thursday, December 30, 2021. 10:30 pm CST.

By Aaron Humes: Perhaps the most significant story of 2021 in terms of the economy was its seeming comeback, with sugar, other agricultural products and tourism posting strong figures in terms of economic growth. Unemployment ticked down and other economic indicators mostly improved, though inflation continued to nag at the overall positive news.

But ‘King Sugar’ began and ended 2021 in turmoil. There were disputes over production estimates that caused a delay to the start of the season, then Belize Sugar Industries Limited/American Sugar Refining (BSI/ASR) was disappointed by Government agreeing to allow 50 thousand tons of cane from Northern farmers to be milled by Santander Sugar in Cayo. This, however, never materialized due to the threat of lawsuits and a commitment by BSI that they would mill all the cane available.

But the dominant story more recently has been the battle between BSI/ASR and the Belize Sugar Cane Farmers Association (BSCFA) over their commercial agreement, which BSCFA wrote in August to halt months ahead of its expiration in January. After an absolute ‘zero-tolerance position’ for even the beginnings of negotiation, the millers have slowly moved toward the possibility of an interim agreement for delivery through the season, which began on December 27. However, there is a standstill at the moment as BSCFA wants a guarantee of delivery of cane through the season, which BSI says it is considering.

Also, Belize’s lawsuit against Trinidad and Tobago over alleged failure to implement tariffs on sugar bought outside CARICOM proceeded in the Caribbean Court of Justice and awaits a decision.

There have been shocks to the system from repeated price fluctuations in vehicle fuel and liquefied petroleum gas (LPG), which in turn have affected prices for goods made locally and imported.

The second major story of 2021 is the retirement of the Superbond in October, after the Government completed a lengthy and complex set of negotiations with power players in the United States and elsewhere. The result was a “haircut” to 55 cents on the dollar for most bondholders and a reversion to the Nature Conservancy (TNC)/Credit Suisse-backed ‘Blue Bonds’, which will allow proceeds to be used as endowment for conservation projects. The Government also made a deal with TNC on the conservation of the “Belize Maya Forest” and associated carbon credits.

While it is an issue we will cover in more detail in Social Issues under this review, the pay cut affecting teachers and public officers was yet another shock.

But the Government revived some interest in investment in Belize in November’s investment summit and moved to sign Partial Scope Agreements with Guatemala and Mexico to help exports to those countries, especially of livestock.

And finally, there was controversy over the exit of Central Bank Governor Manuel Vasquez, who was eventually replaced by his deputy Kareem Michael in December.

 

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