The previous government, the United Democratic Party (UDP), seemed to always have one eye on winning the next election and enriching its members, while it was about the business it was elected to do. The UDP certainly was successful at the polls, winning consecutive general elections (2012 and 2015) after gaining office in 2008, and if success for a party in government is securing the futures of its members, it did a great job there too, but on the matter of the business of the people, the party fell short in a number of areas.
The party didn’t handle our finances wisely. The UDP certainly didn’t manage the country with an eye on building up our reserves, so when the pandemic hit we found ourselves at the mercy of the world, having to almost immediately resort to heavy borrowing to survive.
Out of office, some leaders of the UDP are telling us that they have the solutions to our economic problems. Sadly, for close to thirteen years too many of the party’s leaders were mute while the party misspent our money, corrupt colleagues misappropriated public assets, and governance systems that should function to protect the properties of the people were abused. Some would suggest the silent partners in crime were biding their time solely with the selfish aim of forwarding their personal ambitions.
Belizeans keep a watchful eye on the new coronavirus out of concern for both our health and economy. The situation has improved on the health side, and is improving even more with the development of effective vaccines, but no one knows how much impact new variants of the virus will have. On the economic side, there is a glimmer of hope because of the improving situation in the control of the virus, but as it stands presently where our economy is concerned, we are in desperate need of an immediate boost.
Prime Minister Briceño has said that in bad economic times his government believes the cure is to inject capital into the system, but unfortunately there isn’t any. When the pandemic began, our country was able to borrow money, but now, almost a year later, we have maxed out our credit card, Briceño said.
Way back in May last year, then Prime Minister, Hon. Dean Barrow, said the handwriting on the wall was that the next government of Belize would have to seek help from the International Monetary Fund (IMF).
We all recall when he said he grieved for poor Belize, and that we absolutely would need to get an injection of capital from abroad, and the international lenders as a condition would demand that we do what they have been advising us to do for years — introduce pension reform, trim the wage bill, and consider retrenchment in the public sector.
Rodrigo Campos and Marc Jones, reporting for Reuters on March 3, 2021, said that the Belize government and top officials of the IMF have been having online meetings, but our government had not requested a bailout program. According to the story, we have a “debt-to-GDP ratio of more than 120%”, we “already postponed some debt payments last year”, and we are “heading for default in May.” Belize, the story said, is “a serial defaulter.”
Our backs up against the wall, the government has engaged the unions that represent its employees with the aim of cutting $80 million from government expenditure this year, next year, and the year after as well. One proposal before the unions is that their members accept a 10% cut in salaries, and a freeze in increments.
The Public Service Union (PSU), which represents the government departments that are involved in revenue collections, has led the discussions on ways the government could realize savings. PM Briceño has said the cost-saving measures proposed by the unions are far from sufficient, but the unions disagree: the unions say the government needs to put more energy into the collection of outstanding revenues, spend less on transportation, and stop hiring their family and friends.
These discussions are very serious. Cutting salaries is near the end of the rope; decreasing the spending power of thousands of families would not only cause those families direct pain, it would also suck a lot of capital out of the economy.
The end of the rope would be retrenchment, which happened in 1997. The government declaring almost a thousand of its employees redundant in 1997 was bad, and the impact of such a move in 2021 would be far worse, because there is no place for a worker to go in this Covid-19-ravaged economy, other than the Pantry line.
To help offset the negative effects a cut in government expenditure would have, the government has amended the Central Bank Act, a move that should lead to an injection of liquidity into the system; and to help soften the direct blow to public officers and teachers if the wage cut is implemented, the government says that it would encourage the DFC and the National Bank to make available to them 6 to 10 million dollars for residential mortgages at preferred rates.
Essentially, the government is asking its employees to give it a maximum of three years to turn the economy around. Off the top, three years does seem daunting.
The UDP managed the economy from 2008 to 2020, so they should know a thing or two, and they should make recommendations, but for the nation’s good, they need to be sincere. There is no place for a UDP that is trying to make mileage off the economic tragedy in this country.
The UDP shouldn’t have any trouble being humble, because of the shellacking they took at the polls in the municipal elections, after unwisely attacking the new government wildly. There wasn’t anything they could have done to help them get over in the recent elections, but they could have won some respect from the people. They would have, if they had restrained themselves from blaming the woeful state of the economy on the present administration, and lambasting them, 100 days in, for not yet delivering on their promise to make life better for all of us.
The UDP has to trust the people, because the people have wisdom and they see to the core. The people saw through them in November 2020, and they saw through them earlier this month. The UDP needs to humble itself for a while, and be more sincere. That seems to be the message the people sent them in November, and March.