University of Belize Banking and Finance Institute Launch

13th February, 2023

Hon. Christopher Coye Minister of State in the Ministry of Finance, Economic Development, and Investment Remarks

Good evening everyone.

Mr. President, Dr. Vincent Palacio, thanks for the opportunity to share some thoughts at tonight’s launch of the University of Belize Institute for Banking and Finance.

This is an important milestone for the university and a critical step forward for Belize. Congratulations and thanks to you and your team for having the vision to make this investment in Belize’s future. UB’s investment in building banking and financial literacy sharpens one of our underutilized capacities – our human capital. Financial literacy as a tool for economic development is important at the individual and at the macro level.

To underscore the value of this investment in our country’s economic development, allow me to share some of our economic experiences over the past couple years, our expectations going forward, as well as relevant policy action our government is taking to engineer true economic transformation toward a diversified, sustainable, inclusive and resilient economy.

Through this administration’s homegrown economic recovery plan, Belize’s economy rebounded solidly from the recession of 2019 and economic fallout of the COVID pandemic in 2020 with supranormal growth rates of 15% and over 10% in 2021 and 2022 respectively. With expected continued economic headwinds of elevated inflation especially on food and fuel prices, a high interest rate environment and uncertainty arising from external factors, it is expected that growth will significantly moderate in 2023 and going forward. While the tourism and BPO sectors have boomed over the past couple years, the primary sector especially citrus and banana has struggled. It is expected that the challenges faced by these export commodities will continue into 2023, if not worsen, while the growth in tourism will begin to moderate. Meanwhile, the BPO sector will become an even more material component of our economy and suck up employment especially of the young labour force while at the same time driving an increase in wages across the labour force.

On the foreign reserves front, both the official reserves held by the Central Bank and the foreign exchange held by the domestic banks have increased substantially over the past couple years to amongst their highest levels in Belize’s history. Central Bank’s reserves alone, for example, are now hovering around $1 billion dollars. That said, it is important that we monitor and manage our foreign reserves carefully going forward as it anchors our currency peg. It is noteworthy that while the economy has performed very well over the past couple years, we are still experiencing a widening merchandise trade deficit. Furthermore, external debt servicing obligations will increase in the coming years as principal moratorium negotiated with Taiwan to bring us cash flow relief and interest payments in this high interest environment will increase on portions of our external debt that have variable rates. Appropriate policy action is therefore critical.

If we are therefore to permanently elevate the long term historical growth path of our economy of 2% and transform it into a diversified, sustainable, inclusive and resilient one, the challenge of our government will be to continue to implement the right policies. This includes for example policies that support export development, import substitution, investment promotion and the ease of doing business, but most importantly, human capital development through education and training of our young and vibrant labour force.

An area of our economy that I believe where we are way behind is the financial sector. Access to credit to the private sector including small business is severely limited by the offerings of our archaically structured financial sector. For example, the net interest margin for our formal banking sector hovers around 7%, while in more developed markets that margin is nearer to 3%. Needless to say, the cost of credit is far worse at money lending businesses. With chronically high average lending rates in Belize, it is no wonder that our banking system has over $700 million in excess liquidity. What all this translates to is investment lethargy and the slowing of economic activity that if adequately addressed could mean significantly increased income for the broader economy.

To address this problem, we have begun to build financial infrastructure including regulatory mechanisms such as the recently enacted Securities Industry Act and the Credit Reporting Act, which support capital market development and the development of reputational collateral respectively, that will result in the reduction of lend- ing rates and the net interest margin, and ultimately access to cheaper credit. edgeable enough to meaningfully participate within our financial processes and systems. In Belize, only 46.7% of adults are considered financially aware based on their self-understanding of financial services, products, and terms, according to our Central Bank.

A Public Private Partnership Unit in the Ministry of Finance has also been established to support larger scale investment opportunities to build infrastructure without increasing external debt while the Fiscal Incentives Act has recently been enacted to encourage the ingenuity and entrepreneurial spirit of our people especially small business.

It is extremely difficult to make meaningful headway with these financial infrastructure enhancements however without human capital development in financial literacy and competency.

With the establishment of this Banking and Finance Institute, UB has stepped forward and expressed its willingness to play its part in building the financial literacy of our people.

This Institute can strengthen our capacities beyond basic accounting, to auditing, corporate governance, financial analysis, industry analysis, among other areas. It can conduct research to help investors make data informed decisions, it can provide certification programs for those wishing to work in the financial sector, it can lead general financial education and awareness campaigns to generate interest and confidence in the financial sector. And equally important, the Institute can help us stay abreast of the innovations in the international financial system so we may be better able to confidently engage and take advantage of new financial tools and instruments.

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Increasing financial literacy across all sectors and levels of our economy is essential to the success of any economic transformation we attempt. The Asian Development Bank Institute defines financial literacy as “people’s understanding of financial concepts as well as their skills and ability to manage money and make informed financial decisions.” Over the past ten years, according to the Development Bank of Latin America, financial inclusion levels have increased in Latin America and the Caribbean, but about half of the population in the region still lack access to formal financial services. An overarching cause of this lies within the shortcomings of the institutional framework, however, a lack of financial inclusion is also a key component of this problem. People do not feel comfortable or knowl-

President Palacio, I urge you and the UB Banking and Finance Institute to be bold and innovative, to seek partnerships with cutting edge institutions. Today’s first step highlights your decision to chart a new direction; it harnesses our momentum and strengthens our belief in ourselves and in our ability to build a sustainable, inclusive and resilient future.

Thank you!

ORCHID DRIVE, B.S.I. AREA, ORANGE WALK TOWN, BELIZE

PHONE: 302-3708

Northern Medical Plaza invites applications from experienced, dynamic, energetic, self-motivated and professional individuals for the following vacancy of a GENERAL DOCTOR

Qualification

•Bachelors in Medicine

Knowledge &Skills

•Excellent communication skills both written and oral

•Computer literate prefer working knowledge of Microsoft word, excel or access.

•Ability to work well with staff and peers on a professional and personal level.

Requirements

General Practitioner must be registered with the Belize Medical Council.

Applications close: February 24th, 2023. Please submit application letter and three

References to: northernmedical@live.com

General Manager

Northern Medical Specialty Plaza Ltd.

Orchid Drive, BSI Area Orange Walk Town