By Alexander Britell
BELIZEANS HEAD TO THE POLLS Wednesday to choose their next government — deciding between Prime Minister Dean Barrow’s ruling United Democratic Party and the Opposition People’s United Party, led by Francis Fonseca, which is looking to return to power after leading Belize from 1998 to 2008. An economist and lawyer, Fonseca, who was elected as PUP leader in October, is a former Education Minister and Attorney General. In 2001, he served as Chief of Staff for former Prime Minister Said Musa. Fonseca, who is vying to be the Area Representative for the Freetown Electoral Division, would become the country’s next Prime Minister if the PUP were to win the election. To learn more about the upcoming vote, Caribbean Journal talked to Fonseca about the 2012 campaign, growing the country’s economy and dealing with the crime problem.
How has the campaign been going so far?
It’s been going fairly well. Obviously we’ve had our ups and downs, but it’s been going fairly well over the past few weeks, and I think that if we focus on the next few days and have our machinery running efficiently, on election day I think we’ll be able to form the government.
What is the biggest issue in this election?
The biggest issue is the economy obviously: the economic stagnation that has affected Belize so severely for the past four or five years, with jobs obviously tied to the economy. Unemployment has risen from 8 percent in 2008 to 24 percent today, and that is the problem. That is the problem across the country, just the lack of economic opportunities and, particularly, for many young people. There’s a great sense of hopelessness about the future. So the economy is the issue number one across the country. There are obviously other issues: the crime situation in urban centres has been a very, very serious problem. We have almost 500 murders in four years, so that is a critical issue. The loss of a sense of personal safety and security is a critical issue. There are governance issues as well that are critically important to people. Depending on what are of the country you are in, there are specific issues as well. If you go to the South, there are very, very serious concerns about the future of the productive sector, the banana industry, the citrus industry. If you go up to the North, there are very serious concerns about the future of the sugarcane industry. So the economy is really the issue.
What can be done to improve the economy?
I think to grow the economy we need investment. We maintained that for a long time. Foreign direct investment is completely dried up. That has had a devastating impact on economic growth. At end of 2008, it was $120 million, and at end of 2010, the last figure put out, it was $30 million. So we need to attract investment, and we believe to attract investment we need a government that is committed and enthusiastic about engaging with the private sector. Everywhere I go, people want a government that is prepared to engage in dialogue and consult with the private sector. That is critically missing today in Belize. So I think that is the first step a government can do — understand the critical importance of foreign investment. But investment here is both local and foreign investment. We need certainty as well. You hear that quite often from people in the investment community. One of the things that the PUP is proposing is to put in place a foreign investment promotion act that sets out, in very clear terms, what the rules are for investment in Belize, what the rules for engagement are. I think it’s very important. There’s a lot of uncertainty today, anxiety in Belize’s investment climate. We need to change that, to introduce certainty.
What are some of the other issues in that regard?
Obviously there are other things, like the Rule of Law. There is not a lot of confidence, regrettably, in the judiciary. I think we have to address that issue in terms of the tenure of our judges. We thought we had put that issue behind us, but the government of the day has turned the clock back, and now we’re having judges on contract, an unacceptable situation, which we need to address with a sense of urgency. The tourism sector, the productive sector, those are some of the things we’re looking at. We believe those sectors are overtaxed and improperly taxed, and we need to have a comprehensive discussion with stakeholders about the tax regime, the tax structure and how we can make that tax regime more effective and more efficient — how we can ensure that the tax structure is providing an incentive for investment, as opposed to a disincentive. Even the General Sales Tax, we have to review that tax, which was raised from 10 percent to 12.5 percent, has a crippling effect on the economy. We’re prepared to sit with the private sector on the basis of providing certainty.
Everywhere I go, people want a government that is prepared to engage in dialogue and consult with the private sector.”
We’re prepared to lower that back down to 10 percent, where it served fairly effectively and well for many years, where we were able to grow the economy an average of 6 percent. We believe it can be done. We need to target investment in tourism. One thing that can be initiated is to attract a world-class hotel with conference facilities. Another project that has been languishing for some time now is the construction of a cruise ship terminal docking facility, which we need. This is absolutely necessary to grow our cruise tourism industry. So that’s critical — we all need to move with a sense of urgency to address the high interest rates at commercial banks. We believe we can have a discussion with the financial sector to look at legislating a tax on the spread between deposits and lending rates. These are very important issues that we need to look at. We need, as well, an emergency infrastructure development programme that is well planned and well executed, of works to stimulate economic activity. There are many, many other issues we need to look at. We believe there is huge potential in terms of the ICT sector. That sector, we believe, can attract a lot of near-shore businesses in that sector to Belize, as an English-speaking country. We need to open up the information superhighway. We are committed to allowing VoIP to be available throughout the country. Certainly, our first priority as a government will be to stimulate growth in the private sector, and look at how we can reduce the cost of government. But we believe that it is a very achievable objective.
In February, Standard and Poor’s lowered Belize’s credit rating, citing statements made by Prime Minister Barrow regarding the Superbond. What is your position on the remarks and on the best way to deal with the Superbond?
We have taken a battering from the rating agencies over the past few months. But I think that we viewed the statements as irresponsible. That has been the reaction from the Belizean people. We believe it is a lot of irresponsible political posturing at the expense of the Belizean economy, and threatening not to pay the Superbond for votes in the short term will surely strangle the economy at the same time.
We believe it is a lot of irresponsible political posturing at the expense of the Belizean economy, and threatening not to pay the Superbond for votes in the short term will surely strangle the economy at the same time.”
It’s back to our basic doctrine of getting the economy moving .We believe that to restore Foreign Direct Investment, we have to keep innovating, to keep energizing, to restore confidence in the economy. We’re committed to doing that. We believe in that context — we will be able to manage our debt obligations. As I pointed out, Foreign Direct Investment has plummeted, and in that context, it is not surprising that the so-called Superbond has become a burden on the backs of the Belizean government. But we certainly should not be talking about defaulting on the Superbond. Belize will not be taken seriously, and to do so, I believe, is a very serious error of judgment. It’s not so much a question of what would be done to Belize as a consequence, but Belize would continue to be stuck in a rut of underdevelopment, which we simply cannot afford. We need to ensure that we’re sending a very clear message to the investment community that Belize is ready and open for business, that we are prepared to sit at the table with any responsible investor and move this economy forward.
You mentioned the crime problem. What is the best way to address it?
It’s obviously a very vexing issue. But the first thing is by dealing with the economy. I think if you can get the economy moving again, more jobs will be created, and more revenue will be available to invest in sensible, sustainable programmes directed at the root causes of crime – unemployment, broken families and social exclusion. I think that has to be the first step. I don’t think that [it’s] simply putting more police on the street, or thinking that the problem can be legislated away. So I think we have to renew our commitment to community policing. We talked about how that is critical. We believe that this government has failed to do that. They have not had a very strong commitment to community policing and neighbourhood watch programmes. They are very critical and we need to get back to doing those things.
So I think we have to renew our commitment to community policing. We talked about how that is critical. We believe that this government has failed to do that.”
Also, violent crime, drug trafficking, those are very real and present threats to the stability of Belize. We have to look at different models and see how we can deal with those problems. We need a better trained, better equipped police force, so we have to boost motivation and morale for better working conditions. Again, I keep coming back to the economy, but without the economy, there will be no money to address these matters. We also have to engage, for example, with gang leaders. There are gangs in Belize, but we have to engage with them — we want to give those gang members an opportunity to become positive members of Belizean society. But if they choose not to do so, we have to maintain an aggressive posture, and have stiff laws and jail sentences, and those are the things we are committed to. We can obviously learn from foreign expertise, and I think we have not done enough of that, to seek out foreign advisors who can help us with these problems. So it’s a very challenging issue that affects our country. But I think that it is one that requires the entire country coming together in a sense of unity.
What is your position on offshore drilling, which seems to have become a major issue of late in Belize?
We believe that we should respect the wishes of the Belizean people on this issue. And we will certainly encourage the holding of a referendum on this point. A few days ago, there was a so-called “People’s Referendum” carried out here in Belize by a coalition headed by an international organization called Oceana. That put this very issue to the Belizean people, and I think an overwhelming majority of Belizeans who came out to vote, I think it was 95 percent of the persons who voted, voted against offshore drilling. So we’re in support of having a referendum on that issue. As a party, our position is that we believe there should be a moratorium on offshore drilling until it is very clear what exactly the risks are, and how we can effectively maximize or eliminate those risks. Obviously, Belize is a very beautiful country with tremendous natural resources, and to put those natural resources at risk would be very foolish. So we believe there should be a moratorium on offshore drilling. We support onshore drilling, and we believe we should aggressively pursue those opportunities, new opportunities for onshore drilling, in a responsible way. But certainly offshore, we believe we have to be very careful, and until and unless we are completely satisfied as a people that we can do offshore drilling without risking the natural beauty and heritage of Belize, then we should not do so.
Unless we are completely satisfied as a people that we can do offshore drilling without risking the natural beauty and heritage of Belize, then we should not do so.”
What do you think about Belize’s progress on Caribbean integration, and how do you see it moving forward?
I think our progress has been very slow, for obvious reasons — just the geography has been a very serious factor. It’s been very slow, but it’s been steady. I think we feel ourselves to be a very important part of CARICOM. We certainly have a growing population of people who have been educated in CARICOM — both the current Prime Minister and myself are products of the University of the West Indies, so we have a very strong attachment to CARICOM and the Caribbean people. But Belize also has a very strong relationship with Central America, and a growing relationship with Central America. So in many respects our economic future perhaps lies more in that direction, in terms of our economic ties, and our opportunities for growth and development. But certainly, we believe will be absolutely committed to working very, very closely with CARICOM and in every way possible trying to see how Belize can play a more important role in CARICOM, and whatever contribution we can make as a country to add to integration, we’re committed to doing so, in a responsible way. But obviously we are in a very unique and very positive position — we look at it in that light — in terms of being this bridge between the Caribbean and Central America. So that provides tremendous opportunities for Belize, which we need to maximize and take full advantage of. And our government is committed to doing so.