Belize - Domestic policy

Perhaps the most innovative aspect of current domestic policy is the commitment to political reform, long a Musa priority. Beginning in 1994, SPEAR, revitalized in the mid-1980s as an independent nongovernment organization (NGO), carried out nationwide public hearings on constitutional reform, arguing that under the existing Constitution, there is "tremendous concentration of state power in the hands of the executive." SPEAR proposed a number of reforms, which were adopted by a coalition of 100 NGOs and presented to both parties in February 1998. The major proposals were adopted by the PUP and incorporated into its electoral manifesto. These included the creation of a presidential office distinct from the National Assembly, a measure designed to more clearly separate executive and legislative power; increased independence for the judiciary; and a strengthening of local government. A coalition evaluation of the government's first 100 days called political reform the area of "greatest achievements," especially commending Said's formation of a political reform commission headed by an NGO umbrella development group.

There is no doubt that Belize's small, insecure, and dependent economy remains the party's major challenge, however. The PUP campaigned against a stagnant economy, caused by excessive taxes, promising to abolish the widely unpopular 15% value-added tax (VAT) in April 1999. It was replaced with a lower sales tax and the financial services industry was reformed to encourage foreign investment. When asked about lost revenues, Musa talked about growth-led development, targeting a 60% increase in gross domestic product (GDP), and increasing per capita GDP from US $2,750 (in 1999) to US $4,000. (By 2001, per capita GDP had reached just $3,250.) The new government also promised to create 15,000 new jobs and build 10,000 new homes—primarily through economic stimulation and private sector investment—and increase spending on education and social services. As of 2001, most major capital projects were moving slowly due to a general economic slowdown worldwide and the aftermath of hurricanes in the late 1990s. The reduction of poverty remains the government's short-term goal.

Tourism, which became the most important sector of the economy in 1997, fell off slightly in 1998, but grew 6% in 1999 and 4% in 2000. The government was expected to continue to promote its growth, including the development of "ecotourism," encouraging small-scale, environmentally sensitive development. Offshore financial services are a growing sector; facilitated by a 1996 offshore banking act allowing nonresidents to conduct banking and related business in foreign currencies, securities, and assets, by 1997 there were more than 6,000 international business companies (IBCs) registered in Belize. The first offshore bank was established in November 1998.

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