In a nutshell, our country sells agricultural and marine products — sugar, citrus, bananas and lobster — to pay for manufactured foods and fuel; and sells vacations that include tours to our spectacular reef and Mayan temples (tourism) to pay for refrigerators, medicines, electronic equipment, vehicles, and other items that we don’t produce.
Between 2008 and 2017 our standard of living got a boost from taxes from oil wells in Spanish Lookout and soft Petro Caribe loans. When those sources dried up we were left with only our traditional foreign- income earners, and two of those, citrus and farmed shrimps, because of diseases, are not what they once were. Then the Covid-19 pandemic knocked tourism flat, and almost overnight the number of Belizeans living in an impoverished state doubled.
Ever since the pandemic hit in March, we have been borrowing about $1 million each day to meet our bills, and it was no surprise to anyone when Prime Minister John Briceño told us that the budget for fiscal year 2020/2021 had a massive shortfall of $500 million.
It is usual for our prime ministers to present budgets with substantial deficits. The 2019/2020 budget estimates showed we were $132.5 million short, and the 2020/2021 budget estimates showed we needed $232.1 million to balance it.
The Ministry of Finance estimated that at the end of the fiscal year 2019/2020 our total debt was $3.536 billion, or 90.9% of GDP. It is expected that when the budget estimates are presented in March, our total debt will have increased to about 130% of GDP.
The budget estimates for 2019/2020 included $440.6 million for personal emoluments and $97.1 million for pensions, and the estimates for 2020/2021 included $453.8 million for personal emoluments and $95.8 million for pensions.
Every year the International Monetary Fund (IMF), in its Country Report for Belize, calls on our governments to rein in the public sector wage bill to reduce the deficits. The IMF panacea for countries with deficits is austerity, and in 1997 a UDP government did heed the advice of the IMF and shaved off 800 persons from the public purse.
It’s a gloomy picture that stares us in the face, an unsustainable position, and recently it has prompted calls from all over, particularly the business community, for the government to cut its wage bill. Within a couple months of the pandemic, the business communities’ two registered organizations, the BCCI and the BBB, had publicly issued similar calls. A recently leaked document from the BBB shows that they have called on the government to cut salaries by as much as 15%.
In March last year, after the pandemic stopped the cruise ships and plane loads of tourists from coming, and our economy collapsed, Prime Minister, Hon. Dean Barrow, borrowed heavily to, as much as possible, maintain life as we knew it. The hope was that the pandemic would go away quickly, and Hon. Barrow also wanted to protect his party’s chances in the imminent general elections.
In the eight months in which the UDP steered the economy during the pandemic, they put in stop gap measures and prayed, and in its first three months in government the PUP spent most of its energies battling the pandemic, which was at its worst when the party took office, and putting in place the people it will depend on to help carry out its manifesto.
The PUP has been criticized, maybe deservedly, for placing in key positions a number of persons who are related to, or too friendly with, leaders of the party. It’s not unusual for new governments everywhere to hire a number of their loyalists, and these appointees might indeed be the right choices, but in the short term, under our present circumstances, they will not be able to prove their worth. We have to hope, for our sakes, that down the road they will prove that they were chosen for their capacity and integrity, and thus vindicate their selections.
It’s been almost one year since the pandemic has had us in its grip, and all we’ve done is plug holes. Now we’re in a real tough spot. $500 million, and counting, is a gaping hole for a little country like Belize to fill.
If the government can’t find the money, and all the indicators say that it can’t, it will have to listen to the call of the business community that it cuts the salaries of its over 14,000 employees. Such a move, which looks unavoidable, will negatively impact almost every other sector in this country.
Last week there was some relaxation of the stiff Covid-19 prevention measures that were in place, and that was welcomed by food vendors who can now set up their stalls all along the streets in populated areas, but their sales will be less if government employees have less to spend.
An SIB (Statistical Institute of Belize) pamphlet released in 2016 showed that 60% of the earnings of Belizean families was spent on housing, food, and transportation. The 2016 statistics showed that the average Belizean household spent $26 out of every $100 on housing, water, electricity, and butane; $20 out of every $100 went to pay for food; and $14 out of every $100 was spent on transportation.
In 2021 the cost of food is much higher than it was in 2016. The cost of many locally produced foods went up recently because of the floods last year but, fortunately, these prices are expected to come down when new crops come in. The big problem is that the cost of imported food keeps rising, and as a result Belizeans spend a lot more of their dollar on food than they did back in 2016.
Something has to be done, we all know that, and if our leaders decide there is no way out of this crisis without paring the salaries of public employees, for a time, there will be increased hurt across the nation.
It’s tough times we face today; our leaders have very tough decisions to make, but if they put our country first, they can make our story have a good ending. They can greatly lessen this period of pain if they are serious about good governance practices, and if they chart a course that includes all of us, they just might be able to deliver on their manifesto promise — that with the PUP all of us will win.
For all of our sakes, we have to pray to God, and keep the pressure on them, so that they make the right decisions.