THREE LETTERS THAT POLITICIANS HATE
Saturday, February 11, 2017, 16:17
By: Norris Hall
THE Belize government has been spending borrowed money as if it was going out of style. Suddenly one day, the Barrow Administration discovered that it has. The government is bankrupt. There is no national economy. If there is, it is being terribly mismanaged or it is a failed economy. Whatever is left of it is being propped up by Taiwanese money. That country spends billions on a foreign policy aimed at buying friends and influencing people. It would appear, in some instances that they may even be unintended surrogates to corruption. This has been so in recent cases in Guatemala and El Salvador. Notwithstanding, the Taiwanese have contributed greatly in assisting developing countries like Belize. Without them, and with the Belize government’s abuse of power, mismanagement and corruption, Belize, would have been a failed State - it is on the edge. International experts would assert that it is!
A good example of the misuse and misappropriation of development funding from Taiwan is the Marion Jones Sports Stadium. It has taken as long as the Tower of Babel to be completed. There is no accountability. It is alleged that $ millions have been syphoned off, much of it stolen from funding by Mexico and Taiwan to enrich a few including a former Minister and a former junior Minister of Sports.
Another glaring example of how this government has misused other people’s development assistance has been the reckless spending of money from Venezuela with total disregard for the terms of the Petro Caribe agreement with that country.
It is now that time of the year for the government’s annual budget exercise. Come March, the Prime Minister, as Minister of Finance, will don his cloak and hat as a magician, and take the people of Belize into a realm of magic that is far removed from the reality of the economic mess he has created. As he delivers his government’s budget speech, he will again attempt to hoodwink the people of this country as he outlines his government’s proposed expenditure for the next fiscal year that begins in April. We had a taste of it in his New Year’s message. This was the sound of sweet nothings.
The annual budget exercise should encapsulate the State of the Nation and the state of the national economy. It will, or should, present the government’s projected revenues and expenditure that will be funded from local taxes and the anticipated contributions for projects to be funded from foreign sources, most of which will come from dwindling foreign assistance. When the government needs additional revenues to meet its budget shortfall, as in recent instances of irresponsible spending, it raises taxes. The prelude, the foreword, to this year’s budget speech has already been written by the International Monetary Fund - the three letter word that politicians hate, especially when they display, as the Barrow Administration has, a lack of fiscal discipline.
The IMF usually moves in to ensure a return to financial stability and makes recommendations to foster economic growth. That is the nice way of putting it after a government has screwed up.
A review of the recent IMF’s annual reports on the state of Belize’s economy reflects a laissez-faire attitude towards fiscal discipline, the fast and loose, even irresponsible, spending and the absence of a substantial policy for guided development. The Barrow Administration behaves more like a political adhocracy with bad governance. It is all spin, based on the premise that “the people do not understand”. The reality is far removed from the Prime Minister’s unparalleled universe.
This gloomy and depressing reality has been composed based on facts, by international economists, financial analysts and statisticians including the Statistical Institute of Belize. Every economic indicator provides a minus GDP growth factor, the negative performance of industries, the collapse of some except for tourism. However, the growth in this industry, this sector, is hardly reflected in the national purse. In this industry there is an inequitable imbalance in the quid pro quo, with Belizeans, in most instances, getting the shitty end of the deal. This is a far cry from the original blueprint for the development of this “national” industry. And, then there are other undeniables: the escalating levels of poverty where one in every two Belizean is either very poor or unemployed. There is also the negative impact of crime that continues to rise as punishment falls. There is also a virtually incompetent judicial system with high rates of acquittals, the injustice of a system in which hundreds of accused persons languish in prison for up to five years before they are brought to justice. Worse is that the budgeted allocation for the judiciary will be cut. There is a flagrant disregard for the rule of law, the manipulation of the judicial system and disrespect and disregard for the separation of powers - the Executive, the Legislative, the Administrative and the Judiciary.
The Prime Minister’s Budget speech will be out of context with the reality that he and his government have created. To preempt his distortions, we need to look at what the most recent IMF report, in summary, (October, 2016) said, about the Belize Economy:
“Growth is expected to average less than 2 percent in the medium term. The envisaged fiscal adjustment would remain insufficient to significantly reduce the very high public debt. Large external imbalances, driven by large current account deficits, repayment of the super bond and remaining payments for the nationalized telecommunication company (BTL), would reduce international reserves to uncomfortable levels. The further withdrawal by global banks of correspondent relationships with Belizean banks and low capital buffers in some banks are key threats to financial stability. Insufficient fiscal adjustment and weaknesses in the banking system are significant risk.”
The full report by the IMF is even more devastating as the country continues to spiral downwards.
The Prime Minister will most likely present a government budget created from a prism, distorted mirrors and rose-coloured lenses. It will be written in prose, delivered like poetry and scripted with platitudes with omissions of austerity, retrenchment, tax increases across the board along with some pie-in-the sky offerings for the gullible. He will continue to expect the “masses” to live on lime juice and ramen noodles, while he and his crowd maintain a lifestyle of excessive international travel, an unconscionable fleet of luxury vehicles, a continuing display of arrogance and indifference, and more champagne and caviar or fish roe. The lifestyles of the rich and famous!
If the “King” continues to ignore the seriousness of his damage to the national economy, if the “King” continues to ignore the diagnosis and remedies recommended in the reports of the International Monetary Fund, then his (Budget) speech will be a disservice to the people of Belize and a denial of the economic reality that is biting them in their asses.
He must either bite the bullet or bite the dust.
But then again - who cares?
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