Has a truce been reached? it appears so. On May 12, 2012 The Prime Minister delivered a key note address in commemoration of Belize Bank’s 25th Anniversary of Banking in Belize. It was reported that Lord Ashcroft was in attendance. While the Prime Minister’s speech does not mention Ashcroft by name, there are certain clues in the speech which indicates that the Prime Minister has become weary of the endless litigation.
Belize is burdened with a global recession affecting our economy; a debt burden crushing our standard of living; escalating violence fueled by the drug and weapons trade; the widening gap between rich and poor; countless citizens suffering from mental health and medical problems; poor law enforcement and prosecution and many other issues. Belize does not have time or resources for endless litigation. We need leadership whose agenda is focused on problem solving.
The truce seemed to cause quite a stir amongst members of the opposition. In Godfrey Smith‘s article Ashcroft-Barrow Détente in Flashpoint, he eloquently speculates or maybe gives an insider’s perspective on the renewed relationship between Ashcroft and the Prime Minister. After all Godfrey Smith was one of Ashcroft litigators and would probably have knowledge regarding the litigation intentions of the Lord. Once you get beyond the eloquence, politics and flair of Smith’s essay, he makes a solid point excerpted from one of his previous writings. ” In protracted battles in which opponents are roughly evenly matched, a truce is sometimes declared to save money, time and resources, the initial fit of egotistical pique that precipitated the battle having succumbed to the reality of the pointlessness of it. “ I dont think it was pointless however. I believe it was necessary to curb the insatiable greed of investors’ feeding frenzy upon our rich resources in Belize.
My personal speculation is that the truce is the result of waning hope regarding the legal challenges to the general elections results. The opposition’s hopes of gaining power through the court system is unlikely and many Belizeans of all political faiths have accepted that the United Democratic Party is the Government of Belize for the next five years, including Lord Ashcroft. Stagnating the government and economy with numerous litigation is counter-productive to Ashcroft’s businesses also, so the time for fighting has seemingly ended.
And now that the olive branch or tree (as some joked) has been extended, I assume the litigating attorneys are no longer needed, maybe the reason for the outcry? Who knows! I can only hope the country and people of Belize wins in this scenario. My hope is for better laws and oversight when it comes to investment and investors in our jewel. According to the Prime Minister “[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.”
I applaud the Prime Minster for offering an olive branch. The Prime Minister made a pledge to the business community to work towards fostering an atmosphere conducive for investments. As the Prime Minister said in his speech ” It is no secret…confrontation rather than cooperation has been, in at least one case, too much the Belizean norm…. This is discomfiting all round and a large dose of shared goodwill is now required to address the problem.”
Lord Ashcroft has implanted his fangs deeply into the veins of our society and is one of the most prominent businessmen in Belize. Belize Bank “[is] perhaps the major source of financing for the productive sector in this nation, and that it currently represents some 40% of the banking system.” (PM speech 5/12/2012) I believe that both the Prime Minister and Ashcroft have come to the realization that a working relationship is better than no relationship or worse, an embattled relationship. My eyes are now wide open on Ashcroft reemergence in our society. I implore Belizeans to sleep with one eye shut.
Below is the Prime Minister Speech delivered to Belize Bank and also a link to Godfrey Smith’s article in Flashpoint.
The Prime Minister of Belize Speech delivered on May 12, 2012 at the Radisson Fort George on the 25th Anniversary of Belize Bank.
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.
Flashpoint article : Ashcroft-Barrow Détente written by Godfrey Smith on May 14, 2012 http://www.flashpointbelize.com/flashpointarticles/tabid/103/EntryId/141/Ashcroft-Barrow-Detente.aspx