When the oil wells at Spanish Lookout began drying up around 2015, our economy started slowing, and our pain increased shortly afterward, in 2017, when soft loans from the Alba (Bolivarian Alliance for the Americas) Petro Caribe program came to an end. Strictly speaking about economic output, there has been no growth in Belize for seven consecutive quarters, with the falloff in the last four quarters greatly exacerbated by the pandemic.
The Statistical Institute of Belize (SIB) reported that our economy declined 0.8% in the second quarter of 2019, 0.4% in the third quarter of 2019, and 2.8% in the fourth quarter of 2019. The decline in 2020 was precipitous, with the first quarter decline of that year being reported as 4.5%, the second quarter decline, 23.3%, the third quarter decline, 13.2%, and the fourth quarter decline, 13.1%.
The last time our economy showed growth was two years ago, the first quarter of 2019, when the economy grew by 5.2% compared to the same period in 2018. Economic growth that quarter was buoyed by agricultural and marine output, by 13.8%, and strong growth in the services sector (mainly tourism), by 5%, with the Hotels and Restaurants subsector growing by 6.8%.
The slide for the economy was at first gradual, and then the bottom fell out in March last year when the world shut down because of the Covid-19 pandemic. Our economy is in bad shape, and as the government goes about preparing the budget for the next fiscal year, the Prime Minister, Hon. John Briceño, noted that 30% of Belizeans are without a job, and 38% of us are underemployed.
Leaders of government have been making the rounds, meeting with the major players in the economic sector, to hear their ideas about the way forward. As far as we know, these budget consultations have not yet concluded, but what is sure is that the government must cut costs. For anyone who had any doubts that lean and mean government will be the order of the day for some time to come, leaders of government showed the way by taking a pay cut.
The new government came to power on a manifesto that said all of us are to win, but it was forewarned by the former Prime Minister, Hon. Dean Barrow, that the government that took over after the November 11, 2020 elections had a hurdle to cross before they could begin delivering on their manifesto. PM Barrow said the new government would meet a deluge of economic problems, and it has.
It will take some time for the new government to turn things around, get us headed toward that better day that our people deserve, but so many have never had. Most experts predict that countries like ours will not recover from the economic doldrums in the near future.
Countries that have been hit hard by the pandemic are home-growing solutions to pay for the toll it has taken/is taking on their economies. The great debate in the UK is about a wealth tax. Emma Agyemang, in the Financial Times (UK), said proponents for the wealth tax said it would “shore up public finances and ensure that those with the broadest shoulders carry the greatest financial load’, while opponents said such a tax would “unfairly penalize savers, be hideously complicated and expensive to implement, discourage entrepreneurs and drive wealthy people out of the UK.”
The decisions we make today will go a long way toward determining how long our economy remains depressed, and how well it will perform when the recovery begins. When the economy does recover the government has to make sure it serves ALL of us. We stress ALL, because in the boastful days of the last government, when the nation’s coffers were flush with taxes from petroleum, and the softest of loan arrangements from the Petro Caribe program, forty percent of us were living below the poverty line.
The past government didn’t create many new or high-paying jobs, and its poverty alleviation programs such as Boost and Pantry were not sufficiently complemented with serious investment in training Belizeans who were not equipped to produce in our economy.
At this time, however, the main focus is on our getting through the pandemic. We have to pray that it isn’t extended. New vaccines hold great promise, but some new variants of the Covid-19 virus are more than an imagined threat to the extent of their usefulness.
It is critical that the government puts forward sensible cures for our problems, and of equal importance in these bad times is that those who are doing pretty well keep putting in their pound.
A reported five percent of Belizeans control ninety-five percent of the cash in our banks, and the bulk of it is in a few hands. Many members of this well-off group have been quietly assisting their neighbors; if they weren’t, conditions in Belize would be a lot worse, but more is needed from them, mainly from the ones who are rolling in cash.
In this pandemic, these extremely difficult times, employees of the government are among the haves, but many of them don’t have surplus cash because they are on the lowest and lower pay scales. They still make great contributions when they spend what they can afford on goods and services produced in Belize. If the government does cut their salaries, it is to be hoped that they do so to the minimum.
Those employees on the higher pay scales, if the government decides it has to cut salaries they might have to give up more. They should be reminded that it is only for a time, and reminded also of the important role they have to continue to play in sustaining us through this period. During this time it might be advisable that they save less, and spend a little more with the many Belizeans who depend on their support of their produce and services.
The worst thing that can happen to Belize is that people who have cash, stop spending. We had a peaceful constructive revolution once, and if the government and the people on the top of the ladder do the right thing, there won’t be much talk about a bloody one. The time has never been so ripe for such an upheaval. As much as possible, we must share this pain, and in that way things will be more bearable for those who are jobless. The haves will have to contribute more, until we get out of this pandemic.