Tuesday, May 15, 2012

PM BARROW EXTENDS OLIVE BRANCH TO LORD ASHCROFT

Prime Minister Barrow
Lord Michael Ashcroft
The Dassault Falcon 7X carrying British billionaire Lord Ashcroft had not landed on Belizean soil for a full three years, and with good reason. His million dollar campaign contribution in 2008 to the then opposition United Democratic Party had helped to make Dean Barrow prime minister of Belize, the small, impoverished Central American nation of which Ashcroft had once said, “if home is where the heart is then Belize is my home”. But by 2009, Mr. Barrow had declared Lord Ashcroft – who had once served as Belize’s UN ambassador and been nominated by the Government of Belize for a knighthood – public enemy number one and a “new age colonial master”.

Mr. Barrow nationalized the highly profitable phone company once associated with Lord Ashcroft, enacted ad hominem legislation with stiff jail sentences for anyone seeking to arbitrate against the Belize government anywhere in the world and launched a sustained public relations campaign characterizing Ashcroft, Lord of Chichester, as the enemy of the Belizean people.

It was a risky, reckless move for a country dependent on foreign direct investment and highly vulnerable to external shocks. But Mr. Barrow gambled and rolled the dice, calculating that, if nothing else, expropriation of public utilities would ignite nationalistic fervor and secure his legacy as the great restorer of Belizean pride, dignity and nationalism. In much the same way that George W. Bush framed his presidency with the war on Iraq, so too, Mr. Barrow hinged his first term squarely on the partisan war against the so-called Ashcroft Alliance. Making his rounds on the local radio stations following the taking of the phone company, he declared that if the alliance wanted a war they should “bring it on”.

READ MORE HEREhttp://www.flashpointbelize.com/flashpointarticles/tabid/103/EntryId/141/Ashcroft-Barrow-Detente.aspx

The Prime Minister of Belize Speech delivered on May 12, 2012 at the Radisson Fort George on the 25th Anniversary of Belize Bank. 
Courtesy of twocanview.com



I am happy to have been asked to make some brief remarks on this occasion celebrating the 25th anniversary of the establishment of the Belize Bank. That first step ramified, of course, and led later to the establishment of the Belize Bank Group of Companies, so very much a part of the banking and commercial life of our country.

Now twenty five years of unbroken successful operation is an event worthy of note in the life of any business enterprise. But one must also add to this the fact that the Belize Bank has been perhaps the major source of financing for the productive sector in this nation, and that it currently represents some 40% of the banking system. Clearly, then, we are talking about an institution of which, generally, management and staff can be proud.

And there is even more. Because, in truth, the institution is more than 25 years old. Indeed, this 25th anniversary merely represents the length of time during which it has been operating under the Belize Bank name. So that in fact the institution is closer to 110 years old, having been established in 1902 as the Bank of British Honduras. Then in 1912 it became a part of the Royal Bank of Canada, operating as the local branch of this multinational until 1987 when it was bought by the current owners and rebadged as the Belize Bank. It must be with a sense of great satisfaction, then, that the management, staff and clients of this bank look back at its long past, and look forward to its even longer future. 

But pride of place in the financial system of Belize as the country’s largest and oldest bank, also carries a heavy responsibility. Management and staff must work extra hard to maintain that coveted number one position. And that work must be undertaken and that position maintained in a manner that sets an example in the best traditions of banking. This means providing top quality advice to clients; it means speed and efficiency in financial transactions; and it means preserving reliability, confidentiality and, above all, stability. Potential borrowers and investors must be confident that at all times the bank will offer effective, hand-holding guidance. And depositors must equally know that their funds are always being studiously safeguarded.

A banking and financial system occupies a crucial place in any economy, and so special rules are put in place for its management and regulation. And any government will hope for smooth and cooperative relations among the entities serving the business community and general public in the financial sector. Even more important, the state will want to see an ordered and mutually supportive relationship between the financial system players and the financial system regulators. It is no secret, though, that in this regard confrontation rather than cooperation has been, in at least one case, too much the Belizean norm in recent times. This is discomfiting all round and a large dose of shared goodwill is now required to address the problem.

The fact is that the regulator has a job to do, and is given financial oversight authority by the laws of the land. On the other hand, that authority should never be exercised in a bull-in-a-china-shop fashion. Sensitivity, as well as firmness, is required. Now nobody is naive enough to expect that the regulatory relationship will never turn adversarial. But the occasions when this happens must be the exception rather than the rule. And a financial system cannot function properly in a climate of unceasing litigation. A way must, therefore, be found out of this thicket, this briar patch.

Global banking standards of prudence and stability must be upheld, but without imposing requirements on institutions that are impossible for them to meet. Of course, where individual institutions have, through past practices, put themselves in especially difficult positions, they must be prepared to take extraordinary measures to extricate themselves. Again, I reiterate that it is always a question of balance. Matters are not helped by certain negative developments in banking worldwide, which have understandably resulted in a regulatory mindset to err, if anything, on the side of caution. In that context it is hard to get away from the general requirement for increasing capitalization in order to reduce risk. The recent financial crisis has seen governments, including those of the United States and the United Kingdom, injecting previously unheard of amounts of capital into private banks. It is a situation that we cannot afford here in Belize. And it is worth remembering that the debacle abroad was in large measure caused by regulators operating in a light touch, almost laissez faire manner, resulting in grossly inadequate supervision.

But the effort to avoid a replication of that scenario in our country is complicated by a reliance on provisioning arrangements that are no longer effective for non-performing loans. So those arrangements needed to be changed. But not in a way as to suck all the air out of the system, depriving both the banking and business sector of oxygen. It must be clear by now that I am asking for some sort of middle ground between commercial banks and the regulator. And striking the right balance is not nearly as Jesuitical an exercise as might first appear. If the ultimate authority of the Central Bank is respected, and the Central Bank in turn is realistic and flexible, a via media can indeed be found.  Government, as the ultimate custodian of the public welfare, is-needless to say-ready to help. So I declare tonight to the Belize Bank that we fully expect it to partner with us, to use its leadership role, its ingenuity and its resources, to help find a way out of the impasse. And that is the note on which I close, congratulating the bank once again as we look to a new beginning that will signal its continuing success; and the expansion of its large and, we hope, always positive footprint.

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