Friday, March 22, 2019
The presentation of the budget leaves us with more questions than answers. Economics 101 teaches us that a deficit in the Balance of Payments (BOP) means that we import more goods and services and capital than we export. In order to pay for these imports, we need to rely increasingly on loans. Experts agree that in the short-term a deficit BOP can fuel economic growth if these imports are invested in such a manner as to stimulate economic growth. However, experts also insist that if the BOP deficit persists in the long-term and the debt incurred is used for consumption, then the result is, the selling-off of assets such as land and natural resources to satisfy creditors. If it sounds familiar, it is because increasingly Belizeans have had to borrow to pay for consumption. Remember all those pibil tacos by the sea and Christmas and Mother’s Day cheer and the bloated contracts to cronies?
In 2016 we had a trade deficit with Mexico of -$206.06M, in 2017 it was -$201.82M and -$203.15M in 2018. The trade deficit with our Central American neighbours was -$182.28M in 2016, -$187.03M in 2017 and -$199.17M in 2018. Another way to compare the trade deficit is as a percentage of GDP. In our own version of the ten-year challenge in 2006 the trade deficit as a percentage of GDP stood at -0.052% ten years later in 2016 it was -10.81%. Strictly speaking, running a trade deficit then is not necessarily a bad thing if the money is invested wisely. The Petro Caribe funds, for instance, should have been invested in such a way as to expand the economy, increase industry, and provide meaningful and permanent employment and to drive the economy forward. Instead, it was used to give cronies preferential and overpriced contracts for infrastructure that have not even outlasted the terms of the original loan agreement.
This continues to be the case even now. The proposed road to Caracol, for instance, is just such a contract. The resources of this country ought to be allocated in such a way as to bring the most benefit to as many Belizeans as possible. How can this Government of Belize (GOB) justify the paving of this road while school children and teachers in the Toledo district must brave almost impassable roads on their way to school? How can this GOB justify the millions they propose to spend carelessly while schools are forced to shut down for want of maintenance and repair? How is it that we can find monies for the upgrading of the Hummingbird Highway but no monies for a hospital, at our major tourist destination, San Pedro? We must insist that all our resources be used in the most efficient and effective manner. We must invest capital where it is most likely to give a return so we can be able to pay what we now owe.
It is estimated that each man, woman and child in Belize now owes just around $10,000. All we have to show for it is increases in unemployment, increases in abject and absolute poverty, increases in malnutrition rates, and increases in crime and violence. While this GOB tries to distract us with fear tactics of an impending Guatemalan invasion and tries to sway a YES vote with even more empty threats and silly parties. We must say NO! No to the ICJ! No to Corruption! No to the wanton misuse and abuse of public funds! NO to the UDP!