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Prime Minister to Meet with Union Leaders Print E-mail
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Written by Shane D. Williams   
Thursday, 31 January 2013 00:00

(L-R)The Prime Minister of Belize, Hon. Dean Barrow, is scheduled to meet with leaders of the Public Service Union (PSU), Belize National Teachers Union (BNTU), the Association of Public Service Senior Managers (APSSM) and the National Trade Union Congress of Belize (NTUCB) at 10 a.m. on Friday, February 1st, to discuss their request of a 30% salary adjustment.


The union leaders have justified their demand by pointing to a bigger than expected GDP growth and “savings on the Superbond”. President of the APSSM, Jose Castellanos, is the union’s key economic advisor. His presentations have caused his credibility as an economist to come into question. He speaks of GDP as if it is a calculation of Government revenue. Castellanos said that Government has money because they were expecting a 3.5% growth and the actual figure is closer to 7 %. Therefore, it is 3.5% more than expected which is equal to $35 million. While he may be correct that GDP grew more than Government expected, there is no direct relationship between GDP growth and the public purse. At the introductory level in economic studies, one learns that GDP is calculated by adding consumer spending plus investment plus Government spending and net export to import. In a perfect scenario, that $35 million would come from taxable enterprise from which Government revenue would only amount to a few million dollars.

Castellanos also points to what he refers to as “savings on the Superbond” which are “$22 million in 2012 and $66 million in 2013 and the next four years”. If the unions truly believe that the relief granted from the Superbond restructuring are savings, then the Prime Minister is going to have a hard time presenting an economic argument to them on Friday. The Government of Belize negotiated with the country’s bondholders because it would have been unable to make the expected payments. Even those who have never stepped foot inside a classroom can understand that it is impossible to save what one did not have in the first place. Furthermore, one cannot spend from savings which does not exist.

When the Prime Minister meets with the union leaders on Friday, it is expected that he and his financial officials will break down the economic figures of the country to them so they can better understand Government’s position. Prime Minister Barrow may also pledge salary adjustments based on Government surplus and economic performance. The Belize Chamber of Commerce and Industry has already gone on the record to say that “any contemplated increase in compensation to Public Sector workers should be tied in with performance improvements and efficiency increases”.