Caribbean & Central America - February 2012 (ISSN 1741-4458)

*** BELIZE HEADS FOR THE POLLS.  Prime Minister Dean Barrow of the ruling centre-right United Democratic Party (UDP) has called an early election for 7 March.  An election was not due until February 2013, five years after the last poll in February 2008.  In the 2008 poll, the UDP gained 25 of the 31 seats in Belize’s House of Representatives against the six seats won by the People’s United Party (PUP), which had been in power since August 1998.  The PUP will be led into the election by Francis Fonseca who took over the party leadership in October 2011.

  The PUP lost power in 2008 because of a public perception of corruption and abuse of power attached to it.  The PUP will argue that the UDP has not delivered the improvement in living standards it should have.  But growth has not been that bad. A December 2011 report by the UN's Economic Commission for Latin America (Eclac) forecast 2.5% growth for 2011, which, while down from 2.9% in 2010, is expected to rise to 3% in 2012. Also in the UDP’s favour is the fact that Barrow is a strong leader and his party is well-organized and financed while the PUP is faction-ridden.

 Against this, Standard & Poor’s have downgraded Belize’s long-term foreign- and local-currency sovereign credit ratings to ‘CCC+’ from ‘B-’ as a result of statements made by the prime minister.  On 31 January, Barrow said that the continued debt service of the government’s US$546.8m ‘superbond’ was an election issue.  S&P’s analyst Kelli Bissett said: “The downgrade reflects signs of lower political willingness to service Belize’s external commercial debt obligations.  In addition, Belize faces external imbalances, limited access to external funding, and rising costs of servicing general government debt.”

*** DIP IN INFLATION FOR TRINIDAD & TOBAGO.  According to the Central Bank, Trinidad & Tobago finished 2011 with a year-on-year inflation rate in December of 5.3%, slightly down on November’s 5.7%.  Food prices rose by 10.9% in December against a 12.3% increase in November.  Food prices were noticeably volatile throughout 2011, rising by 30.9% year-on-year in January but by just 0.3% in August.  The subsequent increase was due to flooding in agricultural areas.  Since the middle of 2011, core inflation has remained under 2%, reflecting weak demand. 

*** THE BAHAMAS PREPARES FOR ELECTIONS.  Prime Minister Hubert Ingraham of the ruling Free National Movement (FNM) has signalled the start of his re-election campaign without yet fixing the date for the election.  The election must be held by 2 May 2012.  The total number of seats to be contested is 38, down from 41 in the 2007 general election.

  In the 2007 election, the conservative FNM won 23 seats against the 18 taken by the left-leaning Progressive Liberal Party (PLP).  The FNM has an interesting political history in that it was formed in 1971 from the largely white-led United Bahamian Party and dissidents from the PLP.  The FNM won in 1992 and 1997 under the leadership of Ingraham but lost in 2002 under a new leader.  Returning to the leadership after the 2002 loss, Ingraham again led the FNM to victory in 2007.  He is now standing for his fourth term as prime minister (see sidebar).

 On the campaign trail. Ingraham is campaigning on the hope of continuing economic recovery, which is based principally on tourism.  GDP growth for 2012 is forecast to be 2.3% following a slow recovery from the catastrophic 5.4% contraction in 2009, which in turn followed a 1.3% contraction in 2008.  There has been an earlier contraction of 2.9% in 2006 (which was followed by a slight 1.4% recovery in 2007).  Speaking in late January, Ingraham said: “For the second year in a row since the Great Recession, room occupancies, average daily rates, and room rates were up last year.  Perhaps most encouraging has been that visitors are spending longer periods with us and reporting improved levels of customer satisfaction.”