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G-7 – Was it right or wrong?

Your column “From the Publisher” of August 28, 2013 featured the G-7. The author stated facts, gave opinions and asked questions which I believe were well-balanced. They are thoughts for sobering reflections, particularly at a time when we are about to observe (or should I say celebrate?) our thirty two years of fully fledged self-government, although there are too many of our citizens who believe that good governance as a management concept continues to elude us.

I suggest sobering reflections not just for one “colour” but for all of us right across the social, economic and political spectrum. We need not debate it in the public square but at least do it in the cellar of our souls where we can better insulate the biases and personal prejudices. There is a growing distrust and cynicism toward government, the political system, and politicians. We are all to be blamed. It might be just a matter of degree. Together we can and must restore the trust and hope.

Let me attempt to answer the very explicit and salient question: was the fiscal policy change occasioned by the G-7 a good thing or a bad thing where the health of Belize’s public finances were/are concerned? There may also be an inferential question: was the G-7 the cause for the PUP loss of the 2008 election?

Let me go to context first. The PUP came to office in 1998 with an overwhelming support for its proposed agenda – one of the most modern designs to reform the public sector to allow it to meet the legitimate demands of our people. In essence, the reform was to bring fundamental changes to our public institutions with appropriate behavioral changes. Simply put: Getting it right for development results by getting the most bang out of the tax dollar. This, of course, required a substantial amount of capital, particularly in the areas for physical infrastructure, such as roads, bridges, schools, health facilities, law enforcement/defense, etc.

However, what began to emerge and took priority over the written agenda was an expansionary public-sector driven policy coupled with rapid and widespread privatization. Such a policy demanded unprecedented additional borrowing. The state was now to provide massive on-lending to the private sector for agriculture, tourism, transportation, health tourism, other small and medium-size businesses, housing, education and other social needs. Sources of funding were mainly from commercial banks, a securitization scheme and privatization. Such policy resonates well with those who believe that the state can and should stimulate the economy by just borrowing itself to prosperity. But given their plausible arguments for such economic policy, it is doomed to fail where there is insufficient regard for the fundamental principles that underpin prudent management and good governance. Just to say a few of the obvious – relaxing prudential rules in the lending facility, mismatching by borrowing high and lending low, rapid expansion of credit in a very open and consumer prone economy, state borrowing beyond its ability to pay, budget deficit widening, debt becoming unsustainable, foreign reserves being depleted. If left unchecked, economic collapse would be the inevitable. That was the reality that began to manifest itself.

Given the circumstances, was a home-grown fiscal consolidation program and creating a pathway to restore financial sustainability, coupled with refocusing on our reform agenda as the priority, the wrong thing? It is not only unconscionable to think so, but it would be unforgivable. The change of focus had not only the support of the IFIs, but also an independent distinguished financial expert, and, for whatever reasons, the needed support of the then Prime Minister and Minister of Finance. I am of the opinion that introspectively it has the support of the present leader. It was a good thing for the financial health of the country. The G-7 was right.

Did the G-7 cause the party to lose the election? Hell no! To say so is insulting the electorate, and tantamount to condemning the robbed man because his position of wealth precipitated the evil act of robbery. The party would have had a better chance of winning or losing with honour had it rallied around a moral consensus – admitting wrong, dispelling all doubts of tolerance for impunity, and blowing our trumpet for the good we had done. In life it is not the wrong we do, given the nature of our imperfection, that ultimately condemns us: it is the audacity to believe that we are right.

What are the lessons that could be learnt from our unbiased introspection? The nobility of politics never demanded from us or expected of us to subordinate the end – social justice and the common good- to the empty call of loyalty to the party, which is the means. Such party loyalty is a dead end. It’s a lethal form of laziness. What really matters are issues, character, principle, and, of course, remembering always that real freedom demands of us the ability to think and the courage to act. To our leaders and colleagues we give respect and trust, a respect and trust that must be continuously earned and must function on the principle of reciprocity. Uncritical adulation we reserve only for our God.

History does not repeat itself, but the circumstances do. There is a form of extreme intolerance for differentiation insidiously creeping into our society. Our fundamental freedoms are under attack, not from without, but from within. For those whose personal prejudices will not allow them to emulate the moral courage of the G-7, then resurrect from within your soul the spirit of the Baymen. It is not that we love Caesar less, but that we love our country more.

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