REPORT #265 May 2000
RALPH FONSECA COMPLAINS TO CARIBBEAN DEVELOPMENT BANK MEETING THAT FOREIGN PROCUREMENT RULES BY LOANING AGENCIES ARE EXPLOITING BELIZEANS!


Produced by the Belize Development Trust

First off, lets get the compliments out of the way! We definitely compliment the Minister of Finance, Ralph Fonseca for bringing up the exploitation of Belizeans and borrowing small countries in the matter of procurement contract work. Give him kudos for scoring a good point.

Now the negative part. Like most good Belizeans, from higher society in Belize, they talk rather softly. Unwilling to press a point and perhaps ashamed to show a fit of temper. It seems that way from Ralph Fonseca's speech to the Caribbean Development Bank.

Critique! You won't accomplish anything that way. Your complaint is noted. Probably valid, but toss it in the garbage can anyway. Why? Cause you didn't do it strong enough!

There are ways a good educated person with a grasp of vocabulary, can insult people in the most genteel terms. I myself lack the vocabulary, but I've watched it done with admiration many a time. Myself, I tend to lend to the Kruschev tactics. Take off your shoe and slam it on the lecturn, or table, or something, to make your point. Get their attention at the expense of your own reputation. That's what you get paid for.

At issue was the point that the lending institutions at CDB and other places are insisting on contractor qualifications that are too stringent for small country local contractors. Consequently, this runs up the costs on consultancies, contract terms and many other side issues, if same were done locally at half the cost. There is one point here, from my own experience. About the only thing I would insist on really, at a local level, would be CONTRACTOR BONDING, which is insurance for the value of the contract if it is not performed, on time, or within budget, or to other specifications. That factor leads to a lot of unhappiness with local contractors. But are there people who can do the work? Certainly! They need a PERFORMANCE BOND though to win a contract, so the government, or private person does not lose. Should be included in the price of the bid. Government contracts by foreign loan economics though, squeezes out local contractors. The lender calls the tune to favor his own favorites. It is a chance to pad the loan and make some side money off Belize.

As Fonseca rightly pointed out, Belize is being exploited by the lender institutions, who are using their big contractors at home in the host country to get the bids and jobs. It is a stacked deck.

Of course, the Government has to pay for everything anyway. Why not just quit borrowing to do it? In the meantime Fonseca's loan economics of operating the Government of Belize says that we already have $85 million or so in loans outstanding with the CDB for things, like education, social services, health and so forth. That puts the Foreign National Debt around $1200 million thereabouts at last rough count from the media reporting.

You know if you stand fast and refuse the bidding requirements and insist on your own rules when getting a loan contract for the government. There will be a lot of crying and perhaps subtle pressures from foreign lending agencies and banks, but they will back down if you are firm! Why? There is more money and lenders available than borrowers. Money has to be put to work. The borrower is in the driver's seat. If you accept you are a supplicant, you will get screwed over royally.

High marks to Fonseca for subject matter. Failing grade for presentation! Too polite!

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