Turning to another matter about which the opposition has raised a great alarm, the Prime Minister also discussed the possibility of a so-called Free Zone in Chetumal.
The opposition has said it's a death-knell for the Corozal Free Zone and could result in the loss of thousands of jobs in the north. Today, the PM said keep calm and read the fine print - there's not going to be any real Free Zone in Chetumal:...
Rt. Hon. Dean Barrow, Prime Minister
"The alarm is that Chetumal will become even more of a magnet for Belizeans, we will hemorrhage Belize dollars and our local merchants will be mightily squeezed."
"It is a development that GOB takes seriously. But our analysis convinces us that there are implements in our toolkit sufficient to counter the danger; and that in any event we should be careful not to overstate that danger and go into panic mode."
"Mexican President-elect is certainly not looking to harm Belize. His program is to stimulate activity and fight poverty, and is to be implemented first in the border areas with the US. It is only after that has been done and assessed, that there would be the possibility of rolling out the initiative to Chetumal. And of what, really, is the program made up? The VAT will not be eliminated but cut in half to 8%. Thus, there will be no tax-free shopping to convert Chetumal into a Free Zone. Indeed, at the same time as the VAT would be halved, the minimum wage would be doubled. This is a pro-poor proposal that will likely boost consumption. But it will also inevitably have an inflationary effect, push prices upwards and perhaps cancel out whatever cost reduction the halving of the Vat would notionally bring. For sure this could not make Chetumal more competitive than our CFZ."
"So, the feared new price advantage that the cutting in half of the VAT will supposedly confer on Chetumal, may be more illusory than real."
The Prime Minister also said has invited Mexico's new President - elect Andrés Manuel Lopez Obrador to Belize in December for a SICA summit.
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