With the Belizean economy plummeting into severe recession and with COVID-19 further exposing our extreme vulnerability to exogenous shocks, I believe that there needs to be a more serious national discourse about the short and long-term strategies to revitalize and expand our Belizean economy. These strategies ought to lead to generating increased national income, as well as a significant decrease in poverty and debt, in order to bring the economy to a sustainable development path. Economic prosperity is of utmost significance to the country’s overall prosperity, and seeking to achieve better standards of living ultimately has implications for the quality of life of every citizen.
As a young Belizean, I find it extremely troubling that our generation as well as upcoming generations of Belizeans are bound to inherit a worsening economic situation due to lack of proper planning and implementation of effective long-term economic policies. This is not to say that successive governments in Belize have not made efforts or attempted to expand the economy. The heavy debt burden has not only stifled Belize’s ability for further investment, but the nation’s debt is a burden that we young people are saddled to pay well into the future.
World Bank data shows that sustained economic growth has been one of Belize’s main developmental challenges. Economic diversification and expansion has been on the agenda as a main development goal among many developing countries, including Belize. While I may not have all the answers, my opinion is that there must be sustained national effort for Belize to diversify its export portfolio. This includes finding every opportunity to produce and export more value- added goods and services, decrease our balance of trade deficit and increase foreign direct investment.
Furthermore, I believe that there is a stronger need for more efficient tax collection mechanisms in order to further secure the extra revenue that is rightfully due to the country. Gross leakages are in the tax collection system. All these, I believe, would put the country in a better fiscal position to finance development initiatives.
Currently, Belize exports mostly raw material such as seafood, sugar, citrus products, and bananas, and imports machinery, food, fuels and lubricants. This pattern of trade continues to result in a balance of trade deficit, which makes it much harder to reduce debt burden and maintain a primary surplus. It is obvious Belize does not have the capacity to produce many of these complex imported items and has no choice but to use our foreign exchange to buy them from abroad.
However, there are many items, particularly food and beverage items, being imported into our country which can be produced right in Belize. This time of COVID, when the economy is severely depressed, provides opportunities to rethink priorities regarding the types of products that are imported and that drain foreign exchange. Some of these products are unnecessary, while local production can be encouraged. Why use foreign exchange to import, for example, packaged broccoli, canned beans, coconut oils, corn chips, bottled water or sliced potatoes, when all these products have locally produced alternatives, which tourists can also enjoy?
Providing fiscal incentives for investments in local products and industry will enable us to preserve more of our dwindling foreign reserves that would otherwise be used to import non-essential food items that can be produced locally. Imposing tighter restrictions on nonessential imports during these times of economic crisis as well as tighter measures to ensure that the use of scarce foreign exchange could be a way to better balance the economy. Economic progress will not be possible if we as a nation believe that we can continue to make economic decisions in the same old way that we did in the past. There is urgent need for fresh approaches that will ensure that citizens of Belize nurture a new sense of hope that this crisis will bring fresh opportunities rather than cause us to sink further into poverty and debt. Continuing to hang our hats in the tourism basket and encourage the same old heavy importation for tourists has shown how very vulnerable this has made us.
Despite the gargantuan task at hand, Belize has no choice but to start investing and implementing new policies and reforms to strengthen our economy, or else risk the possibility of indefinitely remaining a poor and dependent nation. We MUST be proactive and place strict economic policies on ourselves, or else our nation will have no choice but to turn to the mercy and harsh austerity measures of the IMF. Having spent a year abroad pursuing a Master’s degree in Jamaica, I was able to have a firsthand account of the hardships that citizens in that country have had to endure for decades under an economy stifled by IMF large-scale structural adjustment policies.
COVID-19 provides the opportunity for deep rethinking and reorienting our economy in a way that sparks new homegrown industries that will enable Belizeans to consume more of what we locally produce and produce more of what we consume. We Belizean youths are watching and constantly hoping that the vision and actions of governments along all party lines will get it right this time.
Since this is not an “overnight” solution, the youth must be engaged from the earliest stages, as we will be the generation working diligently alongside those implementing these changes and continuing the work where current ones left off. Or else, Belizean elders will continue to saddle us youths, the future generation, with heavy debt, poverty, lack of employment and entrepreneurial opportunities, and alienation of our resources to the preference of foreigners (including land). COVID-19 provides opportunities to show that we can do better in planning and managing our economy. We must do better.