Belize's economy is crumbling and the Prime Minister and his government are casting blame on everybody's uncle, auntie and godmother. The Prime Minister is obviously a dunce on matters of the national debt which is unlike his Shakespearean prose.
In reality he and his Party came to office promising to "fix" an economy that didn't need fixing. As he continued his spendthrift ways, he suddenly realized that the country has international debt obligations and that he had been elected to "fix" things, not to cast blame. Get real Mr. Barrow.
But there appears to be some disconnect. There are still a few in the Cabinet who were bold enough to mention in the few minutes that they devoted to the "debate" on the government's budget, two weeks ago, that "this government is taking this economy on the way up….so that we can take the benefit of that growth and pass in on to the poor."
The poor are left to imagine the possibilities with the agony of deficient expectations. Representatives of this government have either become delusional, seeing things through rose-coloured lenses, or simply clutching at straws and hoping that the electorate will once again buy their crap.
Financial analysts disagree completely with Barrow's state of affairs. The economy AND the government are in a financial mishmash, to borrow from Mr. Barrow's lingua.
"Belize's fiscal accounts remain a long way from healthy" and as the government's expenditures continue to rise and because of the inability of the government to increase revenue, the government's debt 'is looking a lot less healthy", says the most recent report of the Business Monitor International.
BORROWING OUT OF DEBT
However the Barrow government believes in borrowing itself out of debt which is unsustainable. At the rate that this government is piling up the national debt, it will, without a doubt, burrow the country into a deep and slippery back hole.
The UDP government of Prime Minister Dean Barrow has tried to use the super bond issue as a scapegoat for this government's inability to stimulate growth. This is more like a red herring. Due to mainly the excessive borrowing of the Esquivel government between 1993-98 and with nothing to show for it, the incoming PUP administration had to move to consolidate its debt repayment. Simply put, there were a number of debts, loans or so-called bonds with several payment schedules. The then PUP government made the decision to lump all these loans into one basket so to speak. This made it possible for government to free up more money from the national treasury to stimulate growth and for more investment in the infrastructure. It worked, and Barrow admitted this.
But three years later, Belize finds itself in a jam as a result of uncontrolled spending by the Barrow Administration. Despite some limited financial assistance from China and more recently from Russia, which has raised red flags, the relief, if any, will be temporary and the deficit will widen even more in the next twelve months. Worse, rising fuel prices at the pump will also have a further negative impact on the GDP, with an increase in the cost of goods and services to consumers.
EXCESSIVE SPENDING
Rather than play the "poor me" blame game there are ways in which Mr. Barrow, as Finance Minister, can reschedule debt payments, reduce the excessive spending by his government (those expensive Prados and Lexus SUVs to start with), cut the drastic increase in personal emoluments in the public service as a result of having more political hacks on the government payroll and other not so invisible hustles.
Mr. Barrow has created his own big debt headache. He is being forced to spend more money on national security, not only to deal with the increase in violent crimes, but as a result of pressure coming down from the United States of America and Mexico. But even so, this sort of investment is like throwing pearls to swine given the incompetence of his government and its obvious inability to abate the rising crime rate, starting with the corruption in his government.
Mr. Barrow may be too arrogant to beg for assistance which is different from begging for money. He has scoffed at the offer of assistance. The World Bank, the Oak Foundation and the Nature Conservancy have offered to provide relief on the national debt in a Debt-for-Nature swap. The offer has been on the Prime Minister's desk for almost three years.
He has not acted on it. We know why.
MORE PRESSURE
Added to all these scenarios, the oil factor is likely to put more pressure on the Barrow government. There is not much more he can scalp out of Belize Natural Energy in the form of taxes. His move, announced in his budget speech, to add gasoline to the list of items excluded from the General Sales Tax, may offer consumers a temporary reprieve and as a result limit demand but will add to the government's cost. The private sector is angry by this move and it will further diminish the PM's ability to consolidate his financial mess.
In short, Mr. Barrow, come off your pedestal, take off your rose-coloured lenses and look at the Belize reality based on the body of evidence. Admit mea culpa and step away!
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Source: The Belize Times
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