Dark Days Here…Darker Days Ahead…

Last week Thursday at his overdue quarterly press conference, Prime Minister and Minister of Finance Honorable Dean Barrow finally admitted that the country is in the throes of an economic recession on account of the global financial crisis.  The Statistical Institute of Belize had said as much since the second quarter of 2008, yet he and the Governor of the Central Bank of Belize Glenford Ysaguirre were adamant that we would emerge safe and sound.  Both got it wrong.

Despite his public admission, we have that sinking feeling that Barrow is not coming clean with the facts surrounding the recession and painting the true picture.  While some of the negative forecasts may not come through, its full extent cannot be determined at this time as it is still unfolding.  We, however, do not need him to tell us that that things are going from bad to worse in a hurry.  It is the everyday reality that is eroding our quality of life and making us distraught because we cannot find work.

It should be noted that an increasing number of family members who, in the past, had no reason to be part of the workforce, are hitting the streets in search of jobs to subsidize their family’s declining incomes so that they can weather the economic hurricane as best they can.  This includes housewives, children, and the elderly, whose household income earners, not so long ago, provided the comfort of a middle class lifestyle.  Thanks a lot, Barrow.

Sadly, the likely outcome of this new reality may be an increase in exploitative child labor that may have a profound negative impact on these children’s intellectual development and their physical and mental well being.  An alarming amount of girls and a surprising amount of boys are “keeping” sugar daddies and mamas or are getting caught up in our thriving commercial sex trade that is fueled by tourism to put food on the table or to cover household expenditures.

That is why it is difficult for us to believe Barrow when he claims that the International Financial Institutions such as the Caribbean Development Bank will provide project inflows to the country to get the economy moving again.  It is clear that he omitted the fact that the crisis has resulted in a global credit tightening that is making access to loans more costly and difficult to access, and that investors have become more risk averse and unlikely to invest in developing countries.

This may result in either increased taxes by the government or reduced expenditure or both depending on how bad it gets for the government.  Nonetheless, we should get ready to sacrifice even more as we will soon have to pay more of our hard earned money into the national treasury.  Just now as Barrow admitted, government revenues are falling and will continue to fall as its collections are not meeting projections.  For that reason, one way to bridge the burgeoning fiscal deficit is for the government to tax us literally to death.

And with the economy contracting and revenues declining, this unimaginative government is on the fast track to massive retrenchment and wage freezes.  And Christmas is not too far away now.  Hundreds of public officers may soon find themselves unemployed as their predecessors did not too long ago courtesy of former Prime Minister Right Honorable Doctor Manuel Esquivel and Barrow.  It does not bode well that Esquivel is Barrow’s chief financial advisor today.

Meanwhile, teachers and those public officers, who are lucky to keep their jobs, may not see a salary increment anytime soon.  The government desperately needs to bring under control its wage bill that has been expanded unnecessarily by lucrative contracts and perks to political lackeys.  In addition, politically unconnected teachers and public officers may become more susceptible to worker exploitation as they will be unlikely to object to absurd demands such as unjustifiable transfers in order to keep their jobs.

We should brace ourselves for worsening crime and violence, if that is possible, as increasing unemployment coupled with the out of control cost of living will push more people below the poverty line, and as a result push more people into a life of crime to survive.  Hungry stomachs tend to wreak havoc on rational thinking, causing the affected to find whatever means possible to vent their frustrations.  It is the stark reality that many more people will be murdered and become victims of robberies and home invasions.  Expect domestic violence to increase as well.

To be blunt Barrow, we did not all underestimate the effects of the crisis on the economy.  How could we when our backs have been against the wall since early 2008.  So, we could not be the ones hiding our heads in the sand.  That would be you and your highly touted financial experts.  And what is scary is that the worst has not yet been felt.  Still, the government has not presented us with the economic measures that it will put in place to mitigate the impact.  Imagine that.

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