Belize is experiencing hard times, and things are about to get worse at the base of the socio-economic pyramid. There will be a flurry of government spending for the September celebrations, but the overall decline in our private sector economy will continue unabated, as the Belizean economy continues to lose jobs.
We have a functional parliamentary democracy in Belize. We have a free press and an open business market. Our country is blessed with bountiful natural resources. But our economy has been struggling for years, and, to repeat, things are getting worse.
What is Belize’s problem? Well, let us begin with a world view. In the twentieth century, we saw countries like Russia, China, and Cuba make major economic progress with the implementation of revolutionary political systems which featured state control of the economy. During the twentieth century, we also saw countries like India, Singapore, and Taiwan substantially improve their economic performances with political systems which were open, democratic and allowed for free markets. There is a vibrant private sector in India, Singapore, and Taiwan. For most of the twentieth century, there was no private sector, as we know it in Western-style democracies, in Russia, China, and Cuba.
Belize is open, democratic, and free market. Last week, however, the business community cried out in pain. The tax burden is heavy on the private sector in Belize, and the chances are that burden is about to become heavier.
It is a given of economic development theory that a dollar in the hands of the private sector is more efficiently utilized than that same dollar in the hands of the public sector. In a free market system, then, the more money, percentage wise, which is available for the private sector, and the less money, therefore, in the public sector, such a situation would be considered a more efficient state of affairs than the reverse, which is to say, more money for the public sector and less for the private.
For some years now we have been watching the ruling United Democratic Party (UDP) politicians and apparatchiks use the taxation system to bully and control the private sector. The result of this has been a significant reduction in the amount of private businesses and a decline in private business performance, while there has been prosperity inside government circles and public sector operations.
At Kremandala, we can speak from personal experience. We have been losing jobs at Kremandala in the last few years, while the present administration’s operations in our line of business – radio, television, and newspaper, have been bursting with profits. That is because the ruling politicians have directed public sector business to their party operations. Both the political parties in Belize behave like this when they are in power, because they seek to maximize the dissemination of information/propaganda which is favorable to their party and administration, and to minimize the amount of information made available to the public which is critical of said party/administration.
The Belize Chamber of Commerce cried out last week because there are private sector businesses in other areas of the local economy which are under pressure. The ruling party has become oppressive in its dealings with local businesses, and their approach has been so successfully politically that they have now won three consecutive general elections, unprecedented in Belize’s post-independence era. The parliamentary democracy in Belize has become skewed, in that the Opposition People’s United Party (PUP) has not won an election of any kind since 2003. The political system we have in Belize requires a strong Opposition to keep the government on its toes and to prevent victimization of the private sector.
The Opposition PUP has not been doing its constitutional job effectively, and the main reason is a longstanding power struggle within the PUP. It is a struggle which is both personality-based and philosophy-based. Consider what has happened at the leadership level of the PUP between 2008 and 2016. PUP Leader, Rt. Hon. Said Musa, who had been a neoliberal Prime Minister from 1998 to 2008, resigned as Party Leader after the PUP was badly beaten in the 2008 general elections. Mr. Musa then supported Francis Fonseca in the March 2008 PUP leadership convention. John Briceno, a businessman with economic development views similar to Mr. Musa’s, was, however, supported by a populist PUP faction, and he defeated Francis Fonseca. Between 2009 and 2011, nevertheless, Briceno was undermined by a group led by Said Musa to the point where he resigned as PUP Leader in October of 2011. He was executively replaced by the Musa group with, no surprise, Francis Fonseca. Under Francis, the PUP lost two general elections, two national municipal elections, and a couple bye-elections. Finally, the PUP decided to return to a democratic leadership convention. In January of this year, Briceno defeated Fonseca again, this time by a much larger margin. But, the tension, hence weakness, in the PUP remains. Who is to blame? Call a name and we will whistle.
The PUP is not doing its job sufficiently well. The ruling UDP is riding roughshod over the local private sector. And, Belize’s economic performance has been in steady decline. Now, the IMF may become a player in our game.
We think there is no way Belize could go the Russia/China/Cuba route where state control of the economy is concerned. There are several reasons why this will not happen. We will not discuss these reasons today. Suffice it to say that Belize must find a way to make our parliamentary democracy/free market system work as efficiently as it can. India, Singapore, and Taiwan have proven that our system can create prosperity. In our system, the domestic private sector has to be allowed to perform.
The ruling UDP has shown an inclination to bend over backwards to facilitate giant transnational investors. Again, immigrant business people, who have generally been more willing and able to frustrate and defy the tax regimes, have achieved more success than our local business people. In the first instance, Belize needs a strong political Opposition, and in the second, the domestic private sector needs to display its nationalist credentials. Thereupon, the Belizean people will respond.
Power to the people. Remember Danny Conorquie.