Features — 21 September 2017 — by Bill Lindo
Why infrastructure is critical

Belize City, Sept 16th 2017:

Most Belizeans have no knowledge about political economy. Yes, we know the imperial British System of “buy cheap, sell dear” – the colonial neo-liberal system that preaches that stealing is okay and normal, that man can only get ahead at the expense of others. Belizeans really believed that they are inferior to the “bacra-man” and following “massa” think that mankind is no different from the dog-eat-dog world of wild animals.

When we accept empire and geopolitics, we accept the British ideology that the common aim of mankind is impossible. We accept that human poverty and want is the normal, that China’s President Xi Jinping’s call for a “win-win” as the common aim of mankind is ridiculous and foolish. Yet, China in the last 25 years, according to the World Bank, has moved over 700 million people out of poverty. A historical record. In 1952 average wages per year in China were about USD $ 84.30/person. In Belize it was about USD $ 430/person. The United States was USD $ 5,900/person. Today (2016) it is USD $ 4,630/person in Belize; USD $ 45,780/person in USA; and some USD $ 10,945/person in China. USA increased by 7 times, Belize by 10 times, and China by 135 times.

How has China done the impossible? By massive infrastructure construction which created the economic demand for manufacturing. By implementing the idea that man created in the image of his Creator is “creative”.

Infrastructure is the key to economic-productivity, and economic-productivity is the key to high wages in money terms. But we must understand certain pre-conditions must be in place for infrastructure to spur economic productivity and demand – to create the high paying jobs and to create the jobs needed for the happiness of Belize’s citizens.

The population must be in good health. Stop eating imported processed foods. Eat local. Eat whole “real” foods. Remember those “cheap” processed foods are the cause of your cancers, obesity, diabetes. Our citizens must be educated in science and engineering – at least 12% of the population in Belize’s case. And we must ensure that every child has completed high school and is competent to read and write English. If our children cannot read and write, we cannot create or be competent in the production processes of the future.

We need a National Bank to supply the credit and to finance the construction. But we need to clear-up a few misconceptions about money. When private entities invest in anything, it’s never for the “common good”. They need a profit and usually at a rate of about + 10% return on the investment. The government is not in the business of profit. It is for this reason that governments provide electricity, ports, airports, roads, highways, communications, etc. Infrastructure usually costs lots of money and must be financed at rates less than 1% and usually take 30 years or more to be repaid. Only governments can do this. And while over 75% of money is created by commercial banks in Belize, the backstop is the Central Bank of Belize – the government, the same government that would be the owner of the National Bank and creator of Belize’s currency for everyday commerce and long-term investments.

Now let me try to explain the process, assuming the pre-conditions are met. Building a road, highway, stadium, bridge, etc. does nothing to create productivity to the economy. And if we Belizeans import the materials from a foreign country, remember that the foreign country will get our money. But if we source the materials here in Belize we keep the product and the money, thus Belize gets richer. Basic manufacturing must exist in our country. Importation of steel, cement, etc. will make the future impossible.

In simple terms, economic productivity means, we either find a way to produce some finished goods faster – using less labor or using less or cheaper materials, or the time to produce is less. In other words, economic productivity can be either from labor or capital or both. The more productive we are as a society, the more we can pay high wages in money terms without destroying our physical economy. For instance, let’s assume Belize is making cement from our limestone, etc. deposits in Cayo. The current process takes about 15.6 mW of electricity to produce 1,360 tons of cement, and uses one worker to produce the 1,360 tons of cement. If a group of engineers using the creativity they possess would get one worker to instead produce 1,500 tons of cement, that is an increase of productivity of some + 10%. Alternatively, if the same engineers and/or scientists were to cut the amount of electricity from 15.6mW per 1,360 tons to say 9mW per 1,000 tons, that is also an increase of productivity. It can be improvement of labor-time or the manufacturing process. When this occurs, then money wages can be improved, crime decreases, and human happiness also increases.

Now how does this occur in infrastructure? Just the act of say building a bridge cannot make this happen. But when man decides to do something impossible then human creativity takes over and the impossible becomes normal; this process then creates new techniques which causes an increase in productivity. For instance, Belize decides to build a railway from Corozal to Punta Gorda linking Mexico and Guatemala and makes the lines go through Belmopan and to Benque to also link Guatemala in the West. One link should be from Dangriga to Benque to the Pacific Ocean in Guatemala. (By the way, this is the way to solve the Guatemala issue. Stop wasting time with some European court. It must be “win-win” for Belize and Guatemala.) The trains must run at least 280 mph for passengers, and about 125 mph for freight cars. The high-speed railway needs steel rails; the rail cars need wood, plastics, steel; the tracks need sand, stone, cement and special alloys. Most of the goods must be sourced in Belize. This will also train our workers in state-of-the-art skills. But we also need to pay for the technology which only China now possesses in the world for high speed railways. This is not an easy task for Belize, but it would transform our society into one our citizens, and especially our children, are deserving of.

Remember, if Belize uses its own raw materials to manufacture its own steel, cement, plastics, electric wire, paints, etc., we can create our own money to finance our great infrastructure projects such as our high-speed railways. Importing consumer goods and borrowing foreign currency to pay for infrastructure will condemn us to perpetual poverty, and neo-colonial status. Rid ourselves once and for all of the British Imperial System. Let’s substitute freedom for liberty – freedom to create.

And don’t forget that China became a modern high standard of living nation-state only in the last 20 – 30 years. And yes, they borrowed from countries in the West. But there was a crucial difference. Nearly all non-Western countries borrowed from Europe and North America to buy their consumer goods. China refused. They borrowed to buy technology (not computers, but machinery, etc.) and capital goods to produce their own consumer/capital goods.

We in Belize, because we feel inferior to our former colonial masters, believe that we cannot break free of those invisible chains that we ourselves have put on ourselves. We send our youths to study at the former colonial master’s schools but they return as sheep – as cowards. Take the engineers: what have they created in Belize? We need to change. We need to take charge of our future.

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