The call has come from many quarters, notably the Belize Chamber of Commerce and Industry (BCCI) and the Belize Business Bureau (BBB), for a serious look to be taken at the public wage bill, because the country’s finances are in a bad state. The economic times in the world are the worst in memory, things are getting worse by the day, and Belize is feeling the pain. The load is heavy, and all must carry their share if we will survive.
The treasury in Belize is so dry that the outgoing Prime Minister has said he believes our next leader will have to go to the IMF, an organization that is known to prescribe some very painful measures, to beg for relief. The former Prime Minister said that the only ray of hope out there for us is if the international financiers decide to forgive some of our tremendous debt — a possibility because it is being discussed in financial circles.
When the first call from the BCCI, the BBB, and others was made for the government’s wage bill to be reduced, the PM responded that his government would borrow until the country couldn’t borrow anymore, before they retrenched or cut the wages of employees of the government. He did not go back on his word.
Retrenching, and wage cuts, don’t only affect the individuals who suffer the loss of income. There is a domino effect, as the loss of buying power of a group of citizens impacts the groups of citizens whose goods or services they used to pay for. However, when an economy is dying, as ours is, decisions are made out of desperation.
The finances of the government are now at, or very near the point, at which we can’t borrow anymore to foot the full public wage bill, and with a general election imminent, public sector workers are naturally nervous about what will transpire once the Governor General swears in a new government.
Groups on the public payroll are the police and other security personnel, healthcare workers, pensioners, teachers, and public officers. The police and other security personnel, and the health workers are largely immune from retrenchment, since their work is even more essential now because we are in a pandemic and they are our frontline workers in that battle. The focus on pensioners has always been on making the public sector pension scheme contributory, not on a reduction in payments to retired persons.
As long as our economy doesn’t suffer a complete collapse, our teachers shouldn’t be concerned about any of their ranks losing their jobs either, but the workers in the public service have a good reason to be nervous.
On the matter of wage cuts or loss of increments, all of the government’s employees have to face that possibility, with the timing and extent of such cuts being dependent on how quickly our economy recovers from the sad state it’s in at this time.
The new government will either be PUP or UDP, and the leaders of the two parties have commented about the desperate straits public finances are in. The Public Service Union (PSU), the union for the group of public sector employees most likely to take a hit, wants them to do more than that. The PSU issued a press release on October 23 calling for the leaders aspiring to be the next PM to come to the table for some in-depth dialogue.
Both leaders of the main parties, Hon. John Briceño of the PUP and Hon. Patrick Faber of the UDP, acknowledge that it is a very tough road up ahead, but have said that retrenchment is a last resort. Briceño has said that if his party forms the next government and the financial situation demands a thinning of the ranks of the public service, the ones to lose their jobs would be the obvious cronies of the previous government, persons who were being paid from the public treasury but were doing political work.
The next government will make the right decisions if it heeds the recommendations of the PSU. The leaders of this union aren’t forming the new government, but they are important social partners, and time and time again they, the BNTU, and other unions have come to the fore to help save Belize.
The PSU is not running away from the economic reality of the country, but they are calling on the next government to address wastage and trim the fat from the system BEFORE they look at the wages of their hardworking, career employees.
In their release the PSU said the focus must be on improving financial management and tax administration, increasing transparency to reduce corruption, and modernizing the system. The PSU identifies a number of cost-saving measures, such as non-renewal of contracts of retired public officers, and suspension of some allowances.
We are, or are very near to being, a desperate state, and the last government has to take some of the blame for that. We have been in the grip of the pandemic since the end of March, seven months, and the government that insisted on holding onto the reins to the very last of its mandate has been applying Band-Aids when we should have been working to increase food security, working to provide more wholesome yet cheaper food for our people, and investing in our manufacturing sector.
The previous government placed all our hopes on a quick return to the glory days of tourism, and even in the best case scenario no one should have expected that. In fact, at this time we are, despite our tremendous physical charms, in grave danger of being the destination no one wants to visit because the number of active cases of COVID-19 is increasing daily, and that will definitely cause the tourists to stay away.
At this newspaper we do not support retrenchment, not even for political appointees if they are on the lower pay scales, and, recognizing that wage cuts for the government’s employees will translate to “wage cuts” for almost all of our small entrepreneurs, we call on a new government to sit down and talk seriously with the PSU before they decide on the path forward.
All of us know things are really bad, but only after the PSU’s recommendations have been thoroughly addressed should we look at public sector wages to see how much they will have to sacrifice.