In his “Make Every Dollar Count” 2020/21 budget, then Prime Minister Dean Barrow boasted that his party, in the twelve years during which it steered government, had almost doubled recurrent revenues, from $591 million in 2008 to $1.184 billion in 2019, and he declared it a stunning accomplishment of his governments that the remuneration for the nation’s 14,000 public employees and 1,000 pensioners “amount now to $540.5 million, up from $276.3 million in 2008.”
In the same breath with which he celebrated his governments’ achievements, he noted that every dollar must count, because our economy had decelerated, lost ground in three consecutive quarters; and that global growth was below target in 2019 and the forecast was that the downward trajectory would intensify in 2020. He said it was likely we would not be able to squeeze sufficient funds from our economy to go much beyond needs at home — needs which he said would not be “paused or pruned.”
In reference to the new coronavirus, which had recently reared its ugly head, Barrow warned that an economic collapse was “entirely plausible if (it) evolves into a worldwide pandemic”, and that the negative implications of a pandemic were “truly alarming for Belize.” The fact is that even without the new coronavirus exploding into a pandemic, our former prime minister already knew that our economy was dead in the water, hence his noting that we might not generate the surplus we needed to service our international financial obligations.
The facts show that there was a very stiff wind in our face when PM Barrow read the 2020/21 budget, but there was no pausing of projects that weren’t immediately essential or pruning of wasteful practices and unnecessary high-ranking personnel. For the UDP 2020, it was open sail, to hell with the rocks, and one simple explanation for that was that there was a general election up ahead.
The new coronavirus continued to spread. On March 11 it was declared a pandemic by the World Health Organization, and coupling that with three consecutive quarters of economic shrinkage, we were in the midst of the storm of our lives. Yet, although the leaders of our government’s employees begged our political leaders to cut the excess and wastage in government, Barrow’s government barely shifted course.
For close to eight months we continued on a path which almost everyone knew was unsustainable in normal times, a path which had hit a dead end because of the pandemic, because the governing party was shoring up its chances for the upcoming general election. On November 11, 2020, Barrow’s party lost control of government, but change of the status quo didn’t come with a change of administration.
The new ruling party, the PUP, on taking office after the general election, introduced some measures to increase earnings in some quarters, and they brought a new energy and direction to the management of the pandemic, which has been successful thus far, but most major issues that had to be addressed were left to lie — why: because there was another election up ahead. Quite likely, much of what the government will present today in its budget would have been implemented in November if municipal elections weren’t due four months later, in March.
In short, the UDP, to a great extent, and the PUP, to a much lesser extent, bled out the last of our resources, the former to help its chances in the November 2020 general elections, and the latter to keep its momentum for the March 2021 municipal elections. Fortunately, there are no elections on the immediate horizon, so we can at last get on with the critical business of trying to steer our ship through these very tough times.
In the forefront of the news of late are the negotiations taking place between the leadership of the Joint Unions, representing the government’s employees, and Prime Minister John Briceño’s government, which had called for public workers to take a 10% cut in salaries and freeze of increments for three years.
Both the unions and government agree that our economy is in a terrible state, and the unions, in finding a solution to the shortfall in public finances, forwarded recommendations to help revenue collection and cut waste; but on Wednesday night the Prime Minister announced that the “near moribund state” of the economy left his government no choice but to insist on excising $80 million from the public wage bill.
The government made a tough decision that will hurt its employees, the majority of whom are living paycheck to paycheck. They, like most Belizeans, haven’t had a substantial increase in earnings in decades, and it is no secret that inflation rates in our country are higher than our SIB has been reporting.
This tough decision will cause our economy to contract even further, at least in the near term. At the same time that our government announced that it would be proceeding with its cuts, the Guardian (UK) reported that the IMF had called for higher taxes on the rich — with “the better off being asked to pay more on a temporary basis to meet crisis-related financial costs.”
The Prime Minister has said that his government will not increase the already high taxes on goods and services in the country, but today we find out how far it will go to close the loopholes in the tax system, and what, if any, structural changes will be introduced to improve revenue collection and production. Glaring is the matter of outstanding land taxes owed by large land owners.
There are times when standing pat is a good move, but for Belize that hand was played out from April 2020 to March 2021, and all we got was more debt. Our country borrowed an estimated $30 million per month for twelve months, never moving away from the modus operandi. We still haven’t made any attempts to engage in light manufacturing so that we can process and preserve the produce of our farmers, so that we become less dependent on food from abroad.
It’s been a particularly difficult year, and more difficult times are ahead, but today, with all elections behind us, we find out what medicines our new government will bring (and not bring) to treat our financial disease. We don’t know how much we will like or not like what is presented in the budget, or how much will work and how much will not, but at least, at last, we can get our 100% focus on what matters most: the business of our country.