Ten weeks after a comfortable victory in general elections, the ruling United Democratic Party (UDP) is scrambling to fix the figures for the 2016/2017 budget. Debate in the House of Representatives with respect to the new budget estimates should begin in early March.
With oil prices falling through the floor all over the world, it was devastating to Belizean consumers and taxpayers when the Government of Belize raised already high fuel prices, and did so at the peak of the Christmas season, when our people are more distracted than at any other time of the year. The overall tax regime was already oppressive in Belize, and this UDP administration borrowed and spent a lot of money last year, mostly Petrocaribe loan funds, in order to feed the struggling Belizean economy with some financial steroids. Now, with the new budget around the corner, the chickens have come home to roost, as we would say. The fat cat politicians and their greedy cronies were never going to enter any austerity program: it is always we, the people, who pay the bills for the ruling politicians.
It is for that reason that general elections are such a frenzied time in Belize: it is because the prize is control of our public funds, the power of taxation. The UDP returned to power in 2008 precisely because the PUP administrations between 1998 and 2008 had made public funds their private domain in a more reckless and arrogant manner than Belizeans had ever seen. Now in 2016, the UDP have won three consecutive general elections, even as corruption within the ranks of their politicians and political cronies has grown year by year. The Opposition People’s United Party (PUP) were able to make/ concoct some excuses for losing in 2012, but after November 4, 2015, these excuses were pathetic. And, the PUP response to the cynical Christmas hike in fuel prices by a UDP administration trying to pay for its campaign excesses was nothing more than a peep and a cluck.
The Opposition political party, in Belize’s two party reality, always has at its disposal a cadre of top flight lawyers, accountants, and technocrats to prepare the arguments against government policies and programs which are abusive, flawed, or unfair. We understand that the PUP is in the middle of a leadership contest, but still, the Christmas spike in fuel prices was in the nature of an emergency, and it was not treated as such.
The approach of the Dean Barrow-led UDP to politics and economics is pragmatic, opportunistic, and ad hoc. There is no rigid economic philosophy: it is politics which decides policy. Politics on the daily level includes making Cabinet Ministers and party standard bearers happy in their respective constituencies. Insofar as the disbursement of resources and finances, this is the priority, not the economic growth of the country. When Cabinet Ministers and standard bearers are happy, this keeps UDP party morale high. With general elections just concluded, a new five-year term secured, and the Opposition in a divisive leadership contest, party morale is not as important for the UDP as it was in, say, October last year. What is important now is to present some budget figures to the nation which create the impression that good things are happening.
The Christmas hike in fuel prices was a desperate, audacious measure. And the Prime Minister got away with it. The more money the Prime Minister, as Minister of Finance, can divert from the private sector into public funds, the more political power he has. Whenever he can effect an increase in taxes, such as the Christmas hike in fuel prices represents, the greater his political power on the ground. Belize’s political system already makes the Prime Minister practically a monarch. When he can squeeze the private sector and give himself the power of life and death over more businesses and business people, our Prime Minister becomes like a god.
The Belizean discussion should now be about economics and finance. Unless we can achieve economic growth in order to finance better living conditions for our Belizean people, then all our problems with crime, violence, inferior health care, inadequate education and the like will not be addressed. Here we have this young nation-state with fabulous natural resources and a reasonable population size, and we can’t seem to move forward. Belize does not have a formula for economic growth. Both the major political parties are committed to a basic version of free market capitalism, but the reality is that both of the major parties, when they are in power, play too much politics, practice too much interfering favoritism in the economy, and thus skew the competitive principles of capitalism.
How Belize stumbles forward economically from day to day is quite interesting to behold. The value of our imports is always substantially greater, frighteningly so, than the value of our exports. What this means is that we are living above our means. It is clear that Belize’s underworld economy, which involves drugs, money laundering, contraband, human trafficking, and the like, contributes much to the money pool in our economy. The price we pay for our underworld economy is an explosively high murder rate, and a way of life which features fear and keeps citizens indoors.
Over the last couple weeks, the propagandists of the ruling UDP have been overly concerned with the leadership contest in the PUP. The reason they are concerned is because the nature of the convention to choose the new PUP Leader is so democratic that what happens on the convention floor will not be predictable, and because the said democratic nature of the convention suggests that the PUP will come out of it with a powerful energy charge.
In a situation where your economy is so weak, the electorate is always volatile. This is because the daily suffering is so painful, and the prospects so bleak. The UDP look stronger than they are, and that is because the PUP were weaker than they should have been. The UDP government should never have been able to get away with that Christmas hike in fuel prices. Things will likely change after January 31, 2016.
Power to the people.