The International Monetary Fund (IMF) has just concluded its review of our economy, and as usual we got a dismal report. Every year the IMF tells a government of Belize that we are on an unsustainable path, that we must rein in our massive debt, and that some of the most effective ways to do that are to reform the pension system, cut salaries of government’s employees, and downsize — retrench hundreds of persons.
If Covid-19 had not caused the ships and planes loaded with tourists to stop coming, if the citrus and farmed shrimp industries had rebounded, if the Petro Caribe loan program hadn’t stopped rolling, if the oil wells in Spanish Lookout hadn’t dried up, hadn’t diminished from a gusher to a dribble, the IMF would still have told our leaders that they had to curtail spending.
Belize’s economy didn’t earn a passing grade between 1998 and 2020, largely because our national debt grew by almost four billion dollars. It was far from a total bust, for we can point to some major infrastructural developments, but poverty increased, the gap between the well-off and the poor grew, and Belize became one of the most dangerous countries to live in, consistently ranking among the top ten most murderous nations on the planet.
Forest products led Belize’s economy during the colonial era, and in the period after self-government and immediately after independence, agricultural and marine produce led the way, but after the turn of the century tourism came to the fore, increasing from a little over 20% of the national economic output around 2000 to over 45% just before its collapse in 2020 due to the Covid-19 pandemic.
Belize found oil in Spanish Lookout in 2005, and the industry contributed greatly to Belize’s economy between 2008 and 2014. The previous government rode our little oil boom, which yielded for them royalties from the wells in Spanish Lookout, and also extremely soft loans from the Alba Petro Caribe Program, to general election victories in 2012 and 2015, and to keep the oil money flowing, the previous government pursued oil exploration.
Our leaders sought to increase oil production, but came up empty, partly because exploration was blocked in two areas —one area for environmental and legal reasons, and the other solely for environmental reasons.
Official information is that seismic surveys carried out by US Capital on lands in and near to the Sarstoon-Temash National Park did not show any signs of oil in commercial quantities, and the exploration was discontinued because the government had not sought, or received, the go-ahead from Mayan communities in Toledo that had won customary land rights over portions of the district in the Supreme Court in 2007.
The government’s ambition to explore for oil in the sea was also thwarted. In 2012, in a “People’s Referendum” organized by Oceana, Belizeans overwhelmingly voted against oil exploration in/near the reef: 96% of almost 30,000 people who participated voted NO, and in 2015 the government formally placed a moratorium on oil exploration in most of the sea off the coast of Belize.
Negligible oil, negligible tourism, two major agro-industries struggling for over a decade, our number one agro-industry yielding returns at the macro level but little to no profits for the smaller farmers, and indebtedness that reaches as high as her nose — Belize, as described by the IMF, is today at the brink of complete failure.
We are in a very difficult economic situation, and at this time our new government appears to be on course to implement much of the IMF’s annual recommendations, because, it says, we don’t have a choice. It must be noted that on top of the aforementioned ways to improve our economy, the IMF has added at least one of their old favorites: increased taxation of goods.
Employees of the government recognize the dire straits our economy is in, and at this time their leaders are sitting down with the leaders of government to help chart a way forward.
When thousands of Belizeans lost their jobs or took home less pay because of the pandemic, it hurt across the nation. If the government’s employees were to suffer a similar fate, the pain across the nation would be even greater, because they are just about the last group in the country that has the capacity to spend.
Cutting the salaries of government employees is tantamount to an individual cutting out meals to pay his or her bills. Hungry, the individual has less energy to work to earn money to meet his/her financial obligations. It is a hard day indeed when our leaders contemplate cutting the salaries of government employees, the majority of whom are underpaid, but the numbers show that we are the sixth most indebted country in the world. We are between as hard a rock and as harsh a tough place as can be found anywhere.
What a difficult situation we are in; our precious Belize is one of the most murderous, most indebted countries in the world, and we are limited in options because we are committed to not sacrificing our environment for short-term gain, and the tourism industry, because of the pandemic, doesn’t hold great promise in the coming year.
Despite all that, we remain one of the most beautiful countries in the world; our people are one of the most resilient in the world, and with a better education system we can very quickly become one of the most resourceful too.
All we need to climb out of this deep hole we are in is the will, and sincere visionary leadership. We will have to pool our resources and rally for the survival of our country, and our leaders will have to make intelligent decisions to one, stanch the losses; two, protect our people (those who have a little, so they don’t have to fire sale their assets; and those who don’t have anything, so they don’t have to sell their very souls to survive); and three, put in the foundation for a recovery that will see all Belizeans win — a reality that has never existed in our country.
On the economic front, our leaders promised to increase the minimum wage, create thousands of jobs, build many houses, and much more, but before they deliver on all their promises, their task is to get us out of this economic pandemic, as quickly as possible. For now it looks like Plan Belize is on hold; now it’s all about Plan Survival.