Op-Ed: Why the Economy Is the Biggest Issue in Belize’s Elections
By Kay Menzies
The voters of Belize will go to the polls next week to decide which party will form the next Government of Belize. Without a doubt, most voters will make their decisions based on, among other priorities, a personal economic argument, i.e. “my life was or is better under…”
Beyond that immediate and personal decision, however, general economic performance has become one of the key issues of this general election. The global recession in the Belizean context has meant slow, or almost no economic growth in the past few years, just when the country needed it most in order to meet its debt servicing requirements.
Our external debt totals approximately 85 percent of GDP, and about half of that debt is commercial debt consolidated into a bond familiarly known as the Superbond, which features interest payments on a step-up schedule (6 percent currently, rising to 8.5 percent later this year) with amortization beginning in 2019.
The step-up structure was intended to give the country breathing room in order to create economic growth to meet the payments as they come due. This, however, has not gone according to plan, and has placed Belize in a very tight fiscal position. Therefore, in partial answer to the economic challenges the country now faces, both of Belize’s major political parties have made varying attempts to address the needs of the private sector as part of their election platforms.
Historically, the private sector in Belize has not, as a body, enjoyed a durable partnership with any sitting government. While Belize has had governments which defined themselves as pro-business, overall development has in fact occurred haphazardly and without formalized input from the organized private sector. Both parties have signaled that the status quo may change with this election, and have made some degree of commitment toward this end via their party manifestos and other public statements.
We submit that whatever commitments are made, the fact is that for the required level of economic growth to occur in the shortest possible time frame, the public and private sectors must regard themselves as equal partners in Belize’s growth and development.
It should be axiomatic that those who pay the taxes and provide the majority of the jobs have input regarding what happens next in our development. However, for such input to be accepted in any meaningful way, mindsets across the spectrum must change.
This week, the Belize Chamber of Commerce and Industry finalized a White Paper on investment that suggests, among other things, the formation of a Technical Assistance and Strategic Cooperation (TASC) Division within the Office of the Prime Minister. Our view of TASC’s composition combines senior government personnel with representatives of business services organizations such as the Belize Trade and Investment Development Agency (BELTRAIDE), Youth Business Trust (an SME development agency for young entrepreneurs), and the Belize Chamber of Commerce and Industry (BCCI). TASC’s purpose is envisioned as follows:
“to implement and constantly evaluate national strategies and production development policies in a systematic and consistent fashion that allows for systemic failures to be easily identifiable and altered through constant improvements. It is envisioned that as a priority the Terms of Reference (TOR) of the TASC can be to outline timelines and deliverables for uniform collaboration, both across ministries and departments and between the public and private sectors.”
While the final product may differ somewhat from our vision, we believe the highest priority must be given to a formalized public/private partnership structure, and our purpose for putting TASC in the Prime Minister’s office is to assign it the level of importance demanded by the urgency of the economic situation.
It is not unlikely that some attempt will be made to restructure the Superbond, but ultimately debt servicing obligations must be met, and in order for this to happen without sacrifice of other public programs, economic growth has to accelerate quickly.
Elections in Belize next week are centered around other priority issues as well, including social/poverty issues and national security. The biggest of these, however, is the economy, and while an energetic, results-oriented public/private sector partnership is not the full solution, it’s an imperative first step in jump-starting the economy.
We hope that whatever the people of Belize decide on March 7, the importance of economic stimulation will move from commitment to serious action.
Kay Menzies is the President of the Belize Chamber of Commerce and Industry.
Note: the opinions expressed in Caribbean Journal op-eds are those of the author and do not necessarily reflect the views of the Caribbean Journal.