Belizeans know that money does not grow on trees but not until money matters literally stare us in the face, we do not grasp the full concept of it.
Our economy, unlike that of other developed countries such as the U.S., Britain, Japan and Canada, is extremely reactive to minor shifts on the international markets. The $30 million budget shortfall recently announced by the Prime Minister is a jolt of reality which we must now collectively face.
Petroleum revenue has played a key role in our economic survival and the lack thereof or decrease in production has had a tremendous effect on our finances. This is not to say that we must convert it into a cornerstone of our economic development – after all it is a finite product. I believe that small and vulnerable economies such as ours must be diverse and not totally dependent on any one given source or industry. A mixed economy is always a safe bet for small, third world economies.
Waste can be considered a characteristic of any democracy for the mere fact that it tends to satisfy the masses and helps to secure votes. Governments today more than ever should look at economies like those of a private company rather than those of a nation. While a government’s obligations are more complex than that of any given corporation – considering the social and political aspects to it – it should guard, save and invest as private businesses do.
The two largest missteps that have plagued most third world countries including Belize are corruption and over commitment by administrations. Plainly put, massive theft and corruption take place, and administrations spend more money than they make. Most third world countries also depend on massive regional and international financial aid and bi-lateral and multi-lateral agreements to bridge budget shortfalls. In the case of extremely indigent countries such as Haiti and Somalia, reliance on foreign aid is a must for survival, as their countries barely generate income of their own.
These financial ‘donations’ most of the time come with certain stipulations, which at times go against what the populace wants or needs. In other words certain principles or beliefs which the populace holds near and dear are compromised in exchange for money.
The Belizean economy can hold its own as we are able to pool our own resources with international help. Ideally, we would stand on our own feet so to speak, but, at the pace we are going, financial independence remains a distant dream. How the current administration plans to close our debt gap in the budget is something we all have to wait and see, since no concrete details on how it will be done have been given.
I believe that austerity measures targeted at genuine waste and not at essential services and needed social programs are in order. With oil prices plummeting on the world market and with minimal increases in oil prices, oil revenue will not be a practical answer. Like any other government, this administration will manage what has become a national financial crisis with much care because there is a lot at stake.
Our financial problems are not a recent occurence, rather a result of systematic mismanagement and corruption which have literally been part of the our nation’s history. While this administration has not embarked on wild spending sprees, austerity measures should have been implemented from the time they took office during their first term. Let’s admit it, GOB has never been a prudent fiscal manager and if we all managed our household the way GOB does, we would all be broke and bankrupt.
The hand-out mentality and election bribes that we have grown to expect from our elected representatives has to come from somewhere and guess what, it’s time to pay it all back now. Now it does not matter whether or not you got something – it is now time to pay and we will all feel the pinch.
Don’t expect our financial woes to magically resolve themselves anytime soon. We need to brace ourselves for some hard times ahead because our economy is a reactionary one. Unless we have some quick and massive investment, the private sector will continue to shed jobs, and GOB will in no way be able to fill that gap.
While the outlook may not all look like sunshine, the important thing is that we can learn from this and hopefully insulate ourselves from more ills in the future. We can put the necessary securities in place so that when another financial catastrophe comes around, we are better prepared.
It’s all about the people!
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