In June, the international Monetary Fund projected that the world economy will contract by 4.9%. Two-thirds of the world’s governments borrowed US $11 trillion in June alone.
The IMF forecasts that 12 trillion dollars will be lost within the global economy in 2020 and 2021 due to the COVID-19 pandemic. The world is beginning to reopen, but the rate of infection is increasing in the US, Brazil and India, which collectively produce over 20% of global GDP.
A major concern is the US, which accounts for 26% of infections worldwide, according to Johns Hopkins University. The US is the number one consumer nation, so if the US is stumbling economically because of COVID-19, the world economy suffers.
The majority of remittances and tourists to Belize come from the US, Belize’s number one trading partner. Belize’s economic needs have increased since the COVID-19 pandemic because of increased medical costs, increased unemployment relief and other government assistance, and a decrease in government revenue.
The reopening of the economy in a measured way is a start, but more than that is required. The IMF forecasts that Belize’s economy will contract by 12% and the consumer price index will be 1% for 2020.
This spells hard times for many Belizeans who have less income amid higher prices. Both the people and the government have dealt with economic hardship, but this time it is different. The global downturn is severe and unusual, so Belize will have to make a lot more internal adjustment with less international assistance.
Belize needs to set up a committee that is innovative with radical solutions. There need to be systemic changes. If Belize treats this situation like all the other economic recessions, the results will be dire.
Never in the history of the world has the world been so heavily indebted and experienced a pandemic simultaneously. There is no evidence that our government is treating the economic downturn as urgent and unprecedented.
Brian Ellis Plummer