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Subsidies for Tourism; bakers still await their turn

A fuel subsidy is now being offered to tour and tender operators in the tourism industry. The Belize Tourism Board launched the program on Thursday in Belize City. The initiative is a part of ongoing efforts by Government to provide relief to the high fuel prices. 185 operators nationwide are participating. The tourism industry is just one sector receiving this type of assistance. Bakers have asked for it and the bus operators have already begun to receive their subsidies. Yesterday, we asked Minister of State for Finance, Senator Christopher Coye about whether subsidies are absolutely necessary and if it solves deep-rooted problems in the economy. Dale McDougal reports.  

Dale McDougall, Love FM News: Subsidies. It’s been the much-talked about money that the government provides an industry. The idea is to ensure that the price for a good or service is low or competitive. Yesterday, the Government announced this assistance – a fuel subsidy – for the tourism industry. But was it important? Did GOB have to do it this way? Tourism Minister Anthony Mahler insisted that this was the best option. 

Hon. Anthony Mahler,  Minister of Tourism & Diaspora Relations: “It is important. The cost of fuel has gone through the roof. It is unbearable. It is crushing, and I know about contracts, and I know that it is difficult for you to increase your prices at this time.”

Dale McDougall, Love FM News: Bus operators have also received the same kind of assistance and the nation’s bakers want a similar thing. But are subsidies effective? Do they do more harm than good? Minister of State in the Ministry of Finance argues that a targeted subsidy – like the ones the tourism and bus operators are getting – make practical sense.

Christopher Coye, Minister of State, Ministry of Finance & Econ. Dev.: “For a country like Belize that has tenuous public finances that we have to deal with on an ongoing basis, targeted subsidies, in certainly my view, make more sense. They have less cost, and they’re less taxing on the government purse, but they can go towards those most in need. We can target to those most in need.”

Dale McDougall, Love FM News: And the Leader of the Opposition, Moses “Shyne” Barrow seems to think that this kind of assistance may be helpful, but it is not a panacea to the current state of affairs. 

Moses “Shyne” Barrow, UDP Leader: “We need to bring relief to our people whether the small businesses, such as, the bakers, the taxi drivers. I’m sorry that I don’t hear subsidies going to them, because to me, they’re as important as the bus drivers. All governments have a responsibility to bring relief to their people, and it is for the government to ensure it is sustainable, and that it won’t exacerbate things.”   

Dale McDougall, Love FM News: That’s precisely the situation in Ecuador and Peru, who in June, saw agriculture workers, students and social partners taking to the streets in protests because their governments have not implemented or improved its subsidy programs. UB lecturer in economics, Dr. Philip Castillo urged caution when it comes to implementing subsidies. 

Dr. Philip Castillo, Lecturer of Economics, University of Belize: “If I was advising government, I would advise them to be extremely careful, because once subsidies have been instituted, they become extremely difficult to remove. Issues of removing subsidies have been the cause of several riots in the region, and the same thing could potentially happen to Belize. And the other thing is that we do not know anything about the subsidy. We do not know the quantum of the subsidy. We do not know how it was calculated.  We do not know how long it will last. There are several things we do not know.”

Dale McDougall, Love FM News: What we know for sure is that the subsidy program implemented by the Government for the tourism industry will span five months in the first instance. Tour operator John Pollard welcomed this assistance. 

John Pollard, Tour Operator: “This offer is going to be given to us for the next five months. Free fuel, I should say. It’s surely a history made here in Belize today. While we are still under this pandemic, we as tour operators and bus owners are struggling to get back on our feet.”

Dale McDougall, Love FM News: Time will tell if this assistance will be a mainstay and prove to be sustainable. For now, 185 tour operators will receive this boost, even as the bakers await their turn. Dale McDougall, Love News. 

As we’ve mentioned, only certain sectors have been provided with a subsidy, but according to BCCI President Marcello Blake, the initiative should have been more far-reaching.