Our economy is not where we need it to be, but on the eve of 2023 we are in a better place than we were on the eve of 2022. On the eve of 2022, the BSCFA and ASR-BSI were locked in an industrial dispute that had forced a delay of the start of the harvest. On the eve of 2023, there is every sign that the industry will be firing on all cylinders, at least until the eve of 2024, and that’s because the BSCFA and ASR-BSI agreed last week to kick the “difference between them” down the road for another year. It’s a win for the millers, ASR-BSI, though not of the duration they aimed for. It’s a victory for the country, and the thanks go to the farmers of the BSCFA, who decided to “suck it up” while continuing to negotiate for a better price for their cane.
On the eve of 2023, citrus and farmed shrimp are still being plagued by the diseases that hit them more than a decade ago; the banana and marine products industries remain relatively stable, just as they were on the eve of 2022; and oil production remains a trickle.
Our biggest engine, tourism, is doing well on the eve of 2023. Because of the pandemic, cruise tourist arrivals in 2021 were the lowest in over a decade, and the number of overnight tourist arrivals was a little more than 40% of what it was in our best year, 2019. On the eve of 2022, it appeared that the pandemic would soon be behind us. On the eve of 2023, we still have to be on guard, but the ships and planes are coming again, though not yet as many as were arriving before the WHO declared Covid-19 a global pandemic.
Where would Belize be without Business Process Outsourcing (BPOs), the call centers? The eve of 2023 is as bright as the eve of 2022 in the call center industry, which started back in 2005. In May this year Hon. Christopher Coye, the Minister of State in the Ministry of Finance, Economic Development and Investment, stated that the call centers continued to bring in the foreign exchange for our country and to provide critical employment for our people. In 2019, about 3,500 Belizeans worked in the industry; in 2022, that number has grown to almost 8,000.
Beltraide says the industry is a specialized “niche” area for Belize, that it is “on a strong growth trajectory owing to the advantages of a young population, natural flair of a service-based economy, a competitive business environment, world class telecom infrastructure, specialized incentives and strong active government support.” We are also “a great value destination due to [our] high workforce availability [and] salaries that are 60-80% lower than US locations.”
On the eve of 2022, our public debt had fallen from around 130% of GDP (on the eve of 2021) to around 110%. On the eve of 2023, the GOB says that our debt-to-GDP ratio has been further reduced, to less than 70%. While in office during the first frightening months of the pandemic, former prime minister, Dean Barrow expressed the hope that the International Financial Institutions (IFIs) would give some debt relief to Belize and the other struggling, heavily indebted countries in the world, and said that debt restructuring would be a necessity for our survival. Indeed, on the matter of our international debts, even prior to the pandemic we had been faltering on our payments to the holders of the so-called Super Bond.
We are still waiting on the IFIs to reduce our pain, but through major debt restructuring we have received much ease on the macroeconomic front. Firstly, the Super Bond became the Blue Bond in November 2021. The Nature Conservancy (TNC) said it is “the world’s largest debt refinancing for ocean conservation to date”, that it “enabled Belize to repurchase USD 553 million, a quarter of the country’s total public debt, from bondholders at a 45% discount through a ‘Blue Loan’ arranged by TNC.”
Just this month the Prime Minister, Hon. John Briceño, announced that Venezuela had agreed to a restructuring of the massive debt we owed under the Petro Caribe program, and the result was the wiping off of another quarter billion dollars of debt.
After the Blue Bond agreement, the Financial Secretary, Mr. Joe Waight, had warned that the deal wouldn’t lead to “any additional cash flow for the government and the country in the short term”, and that we remained on “the cliff of financial peril.” On the eve of 2023, the debt-to-GDP ratio is greatly improved, but our country is still in the grip of poverty.
On the eve of 2023, we are hours away from a promised increase of the minimum wage, to $5 per hour. Inflation has eroded the purchasing power of the Belize dollar, in some areas by as much as 30%, so the little extra on the paycheck of the lowest paid Belizeans is timely.
On the eve of 2023, the cost of fuel is higher than it was on the eve of 2022, and Belizeans are straining their pockets to pay the bills at the fuel pumps. Belizeans scream for relief, and there has been a drop in the cost of fuel in the latter part of December, but the GOB has indicated that fuel prices won’t go back to pre-pandemic levels until a new Petro Caribe arrangement with Venezuela is rolling our way again.
Belizeans see the price of fuel in the US in news stories on American television, but we really can’t compare ourselves to them. The U.S. Energy Information Administration (EIA) says “federal taxes include excise taxes of 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel fuel, and a Leaking Underground Storage Tank fee of 0.1 cents per gallon on both fuels.” While US states apply additional taxes on fuel, at the end of the day the taxes on fuel in the US don’t come close to what we Belizeans have to pay. The truth is that our GOB is heavily dependent on the taxes from fuel to run the country.
In July this year the GOB Press Office said the acquisition cost of fuel had gone up 300% since November 2020. In that same release, the GOB said that “at November 2020 and continuously for years before that, excise tax on diesel and regular gasoline was $2.97 and $3.29 per gallon, respectively” and that to ease the fuel pain the taxes on diesel and regular gasoline had “been reduced by virtually 100% and 77% respectively down to less than one cent, and 75 cents per gallon.”
On the eve of 2023, we are still very much a “third world” country, from slavery to colonialism to neocolonialism. There is so much need in our land. But, on the balance sheet, our country is better off than it was on the eve of 2022. We are grateful for the improvement. Happy New Year to all Belizeans, from the Hondo to the Sarstoon, from Benque Viejo del Carmen to Halfmoon, and those living in countries abroad!