Belize economy: Upbeat about future.

The United States may be busy nationalizing its banking and financial services industry, but neighboring and tiny Belize is happy to be private.

Tourism is the major industry of Belize and it has been hit by a drop in arrivals from the United States, that sends the maximum number of them to Belize. However, there does not appear to be a perceptible drop in its earnings from the export of marine products, bananas, garments, etc.

The foriegn debt of the country is, however, a different ball game. Now said to be in the region of 73% of its GDP, it continues to stress the economy with servicing the debt taking away the cream of its earnings. This is, perhaps, the biggest challenge facing the Belize establishment, that is otherwise upbeat about its future.

The services sector of Belize contributes the major share to the GDP at around 63%, followed by agriculture at 30%, and industry at 17%. The services sector also provides employment to nearly 62% of the workforce, while agriculture provides jobs to 20%, and industry about 18%.

The country’s agricultural produce includes bananas, sugar, citrus, etc. The industries sector includes tourism, garments, oil, food-processing, contruction, etc. Belize exports sugar, bananas, fish, wood, etc., and imports manufactured goods, chemicals, fuels, pharmaceuticals, machinery and equipment, etc. The major trading partners are the United States, the United Kingdom, Mexico, Cuba, etc.

The major challenge facing the country is the huge foreign debt which can be wiped off only with increased foreign exchange earnings. But tourism, which is the largest foreign exchange earner for the country is suffering on account of the recession in the originating countries, especially the U.S. Othe major issues include unemployment and poverty.

Belize is considering various ways to deal with these issues, including taking foreign assistance, and with the gradual improvement in the global economic environment, there is scope for Belize to capitalize on it to improve its economic condition.

Guatemala economy: Catering to the haves.

Having gone through a civil war that lasted for over 35 years, Guatemala can be expected to have all the legacy problems of such a history.

Among the most populous of the Latin American countries, it also has a record of sorts for income disparities. It is a typical case of the rich becoming richer and the poor becoming poorer.

The private sector plays a major role in Guatemala’s economy, and contributes 90% of the GDP. The services sector dominates in the economic activity sphere, contributing 60% and above to the GDP, while industry comes second at around 26%, and agriculture at 13%.

While the services industry provides employment to only 35% of the workforce, agriculture takes care of 50% of the workforce. Among the important agricultural products are coffee, sugar, and bananas. Other produce includes corn, beans, spices, etc. Agriculture contributes to nearly 25% of the export earnings.

Among the important industries of Guatemala are sugar, textiles, chemicals, apparel, rubber, food processing, etc. The major part of the manufacturing output caters to internal demand, and also from sorrounding countries especially the United States. Guatemala has a large expatriate population that remits a substantial amount of foreign exchange.

Guatemala also benefits from its membership of the CAFTA, the Central American Free Trade Agreement. Under this program, Guatemala is able to export goods without customs tariffs and is able to attract foreign investment. Even though the country has a fairly sound macro-economic structure in place, the problem is there is no percolation of economic benefits down the line.

Over half of the population of Guatemala lives below the poverty line,and over 30% of the population is said to manage on less than USD 2.00 a day. With the global economy in recession, Guatemala has to contend with decreasing demand for its goods and services, and a fall in the inward remittances.
Guatemala needs to urgently address its outstanding economic issues, and ensure a fair level of economic development to all sections of its society.

Jamaican economy: Payback time now.

Jamaica is sitting on a debt bomb, literally speaking. And now it appears to be time for a payback.

The current global economic crisis has exposed several myths about the strengths and weaknesses of the economies and economic systems around the world. Among the hardest hit are the ones considered to be the toughest and infalliable. One has to only look at the state of the American Banking and Financial Services industry to understand the point.

The Jamaican economy is sustained mainly by tourist revenues and inward remittances. The services sector provides employment to nearly 65% of the workforce, contributing over 60% to the GDP. And industry, dominated by bauxite and alumina related activities contributes about 35% to the GDP, while providing employment to 20% of the workforce. Among the other industries are cement, paper, chemicals, etc.

The country exports bauxite, alumina, coffee, chemicals, apparel, sugar, etc. And imports fuels, raw materials, machinery, capital goods, foodstuffs, consumer goods, etc. By far U.S.A. is Jamica’s major trading partner, both for exports and imports.

The major problem faced by Jamaica now is the huge debt burden that is said to be about 130% of the GDP. Other problems include the slower growth on account of the general global slowdown that has hit Jamaica’s tourist industry. This in turn, has led to increasing unemployment and underemployment. This vicious circle has inevitably resulted in burgeoning crime that is actually posing a hurdle to the economic progress and development of the country.

The Jamaican authorities are considering various options to deal with the situation. But in view of the tight economic position in most parts of the world, Jamaica’s options for a bailout appear to be limited. One of the options is a bailout package from the World Bank and the IMF.

As a matter of fact, Jamaica is paying for its past excesses now.

Towards a slow and painful recovery.

Those desperate for some positive news on the economic front in the United States have something to cheer about. For the first time in nearly fifteen months, the U.S. unemployment rate fell by a smart margin, indicating a slow and painful movement towards recovery. Provided, of course, the relative data as presented in surveys carried out by Bloomberg and others is accurate and reliable.

One of the most important aspects of the current crisis is the issue of credibility of the institutions that were considered above reproach, and totally reliable. As it transpired later, many of these institutions were found sorely wanting in competence, as well as integrity.

The optimism about the current situation is mainly on account of the fact that job losses that were supposedly estimated to be in the region of approximately 325,000, turned out to be only around 247,000. It is not clear if the estimates were accurate or there is a real improvement in the ground level situation.

Some of the areas where job losses occurred in good numbers are the financial services, the construction sector, and the hospitality industry, while the auto industry added several thousand jobs in the otherwise cloudy scenario.

It remains to be seen, however, as to when and at what rate consumer spending would improve. That would be a key indicator of consumer confidence, as well as availability of disposable incomes. The economic recovery chain does not appear to be consistently strong throughout. There are weak points that could easily pull the positives back to square one.

If the American economy is really on the mend, it is definitely not at a pace that many fondly look forward to.

Secrecy trouble for Swiss Banking.

Think of Switzland, and the images that flash across your mind are that of scenic beauty, cheese, and chocolates. But for the money-minded, especially those who value secrecy, whether legal or questionable, it is Swiss banking that comes to the mind. Switzerland is the perfect hideaway, for money, whether legal or otherwise.
Banking has been the cornerstone of the Swiss economy for centuries. Anc secrecy the grease that has kept the institution of Banking going on smoothly, without so much as murmur, all these centuries.
All that is now under sever strain, and Swiss banking is facing the most serious and potent threat to its very existence. Ever since money laundering and terrorist financing became an international issue, offshore financial centers offering secret accounts, and not burdening their clients with too much of legalese, have been facing the heat. Accused of aiding and abetting tax evasion by foreign citizens by encouraging them to park their funds with them, Swiss banks are now encircled with international laws and lawmakers that are determined to break the backbone of Swiss banking by bringing them in alignment with regular banking laws prevalent elsewhere.
Right now, the U.S. and Switzerland are in the midst of a royal row with the U.S. trying its best to get hold of details of about 52,000 of its citizens maintaining accounts with Union Bank of Switzerland, and said to have violated U.S. tax laws. And on its part, Switzerland is throwing everything in its armory to stave off what could turn out to be the death blow to its Banking industry.
The U.S. Justice Department is going all out against the Swiss Banking giant with the IRS providing ammo in the form of the “John Doe summons” that entitles it to obtain the names of American citizens who are likely to have broken U.S. tax laws, by taking advantage of offshore accounts, like in the above case with the UBS.
To be concluded.

GOOD TALIBAN, BAD TALIBAN!

Good Taliban, Bad Taliban!   That is the new Mantra of the new American administration, trying to come to terms with the mess in Afghanistan, and more importantly, trying to negotiate, undeniably treacherous territory.   And the beaten path beckons, especially, when you are not sure.

Historical Perspective:  And just who are the Good and the Bad Taliban?   You guessed it right!   The Good Taliban are those, that support America and the West, and the Bad Taliban are those that oppose the West, especially, America!

In the 1980’s through the 90’s though, there was no such distinction within the Taliban.   There was only one Taliban, and that was the Good Taliban.   Because, they were fighting the Soviets who had occupied Afghanistan, with American assistance.   Of course, the Americans supported the Taliban for their own strategic interests, and not because they sympathised with them for the wrongful occupation of their country, by the Soviet Union.   Another point to be noted here is, that, the Taliban and the Al Qaeda were jointly fighting the Soviets and receiving military and other aid from the Americans.

The Americans did not mind hobnobbing with the Taliban and indeed the Al Qaeda, oh yes, in their determination to give a bloody nose to the red communists!   Ridding the world of Communism was well worth the price of  sleeping with the Taliban and the Al Qaeda.   And what was the rationale and purpose of eliminating the communists from the world political landscape?   Of course, not democracy, freedom and the like.   The Soviet Union stood in the way of America becoming the only Super Power of the world.   Then came the 911 (some say rigged up) and all that followed.

Emerging Scenario:  Now the Americans are up to their old game again.   Old habits…….!   There is talk of identifying, read dividing, the Taliban, read Afghans, into two distinct groups.   The Good and the Bad.   The good being pro-west, and the bad being anti-west.   A divided Taliban would fit in perfectly well with the Western strategy for the region.   The recent compromise of the Pakistan Government with the Taliban in the Swat Valley would appear to be part of this strategy.

Will the Taliban fall for this bait?   Does the Taliban have an inkling about what the United States and its allies, may have in store for them?   Will the United States succeed in dividing the Taliban?   Looking to the continued violence in the Swat Valley, one would be inclined to believe that America and its ally, Pakistan, are still some way away from befooling the Taliban.   The West seems to favor the same strategy against the Taliban, that they had successfully employed against the Palestine Liberation Organisation.   Remember how the PLO was broken up?   Now there are two groups of Palestinians, one good, that are aligned to the pro-west Mahmoud Abbas, and the other, anti-west aligned to the Hamas of Khaled Meshaal.   Once you divide a community into good and bad parts, it becomes that much easier to go after the ‘bad’ ones, the ‘terrorists’, with the added bonus of not being accountable for your actions.   After all, ‘terrorists’ that kill innocent women and children do not deserve our sympathy, do they?   But the fact remains, that, dividing the Palestinians has not brought peace to the the Middle East, and the expected dividends to Israel.

And so the great game goes on.   Only this time, with the West, especially the sole Super Power, beset, as it is, with crippling economic problems, may not be able to play the great game for much longer.

What could be the game plan of America and Pakistan?   To lull the Taliban into a false sense of security and then to make a ‘final assault’ to wipe them out?   In much the same way as the Israelis went after the Hamas in the Gaza, reportedly preparing for the ‘final assault’ during the six month long ceasefire?

View expressed are author’s personal.