|“Belize Weathered the Financial Crisis Relatively Well”... Kudos Hon. Dean Barrow|
|Written by Administrator|
|Thursday, 09 February 2012 00:00|
In late 2011, the IMF issued a statement categorically saying “Belize weathered the financial crisis relatively well, when compared to other countries in the Caribbean Community (CARICOM).” It attributes expanding output in 2010 to activity in electricity and wholesale retail and trade. Worthy of note was also the fact that for the entire 2010, inflation was zero (0) and rose to 0.9 in early 2011. Like every country, including developed countries, it is important that debt reduction, financial stability, and boosting growth and reducing poverty should form a part of the economic policies. It must also be noted that there were some recommendations; two of which were: (1) raising additional revenues, including through “gradually raising the GST rate to 15% and; (2) reducing the upward trend exhibited by the wage bill since 2007/2008.
For a government that inherited a debt burdened economy, which included the SUPERBOND, which is in the neighbourhood of 1.1 billion ($1,093,572,000), it would have been easy to accede to the demands of the IMF. After all, an additional 2.5% tax on the buying power of the people, would have netted additional tax revenue to assist with the amortized payments. If the government was to reduce the wage bill, it could mean additional allocations for expenditure on capital and other projects, but it would also mean an increase in the unemployment rate. If they were pensioned, then additional expenditure would have to be made on members of the population, who are in their prime and productive stage of life. So, for the 149,000,000 that has been paid or expected to be paid inclusive of February 20th, 2012, none of the funds have come from an increase in taxation or a reduction of the size of the public service and that is plausible for a government that has to steer the economy through the turbulence and aftershocks of the economic crisis. The Prime Minister’s words must be strongly emphasized and reiterated “there will be no new taxes and the IMF can go fly a kite.” On the matter of the SUPERBOND, it must be noted that beginning in August 20, 2019, the country will be paying PRINCIPAL plus INTEREST on the SUPERBOND; US$27,000,000 on principal and US$23,000,000 or US$50,000,000; that’s 100,000,000 million Belize dollars. Similar amounts will be paid until 2029, when the full amount would have been liquidated or paid for. In other words, Belizeans, the country is indebted until 2029. The question is whether or not, the developments for which the previous government, in their 2002 and 2003, debt consolidation was realized.
Some in the media picked up the downgrade of Belize’s credit rating by Standard and Poor’s (S&P). This was primarily based on the perception that the country seems less willing to service its external debt. Ladies and Gentlemen, it is a burden to the country, but the country has not defaulted on any of the scheduled payments. This downgrade must be taken in stride, because the S&P has “kept a stable outlook on the rating, because there is a chance that the debt management will improve after elections, scheduled for March 7th, 2012.” There is every assurance that the Hon. Dean Barrow will not default on its obligations. The question is who do we trust with this situation, a party (PUP) that keeps trying to fit people in or a party (UDP) that is cohesive and ready to ensure economic growth and a level of prosperity for its citizens? I dare say, the answer is easy: the UDP.
There has been talk in the media that the country is broke and that every economic indicator is negative for the future. Belizeans, when it comes to making predictions for the future, it is important to look at the past to determine certain economic trends. The present level of debt level is cumulative and most of it was incurred during the 1998-2008 period of governance under the PUP. When the UDP inherited the economy, it was important to inform the public what was inherited. To say that over the last four years, the UDP had a diametrically opposed effect on the economy is ludicrous. It is true that more can be done, but remember that we did not decline into a recession. The UDP kept the economy stable and did not default on its debt, did not raise taxes and introduced and implemented social and economic initiatives. Belizeans, the PUP has a credibility gap and cannot get its house in order and should not be given the opportunity to govern this country. The Hon. Dean Barrow called early elections so that the economic initiatives and policies, which include job creation and other stimuli for economic growth, can be implemented. Come March 7th, there is only one choice and that choice is the UDP.