REPORT #442 October 2001
NATIONAL BUDGET CUTBACKS IN BELIZE FOR 2002 (COMPARATIVE POLITICS)


Produced by the Belize Development Trust

Can't say what will happen with the budget in Belize in 2002? But here in Florida, the State Government responding to Federal Government dispersements is announcing over a $1 billion dollar shortfall in funds going to cities, towns and villages and county governments. This is estimated to be a 5 % cut in spending, for all lower level governments and department heads overall, down the line. Already, our Six College campuses of the Miami Dade Community College system are being called to a special meeting this week, to plan the cost cutting necessary in the system. To top it all off, the extension branch my wife works at, has increased enrollment this fiscal year to somewhere between 6090 to over 7000 students, from about 2,200 student just 2 years ago. A triple increase of students but the budget cuts are already being felt ahead of time. She has no departmental budget this coming fiscal year at all; all the funds are being gobbled by the parent campus of which her little operation is just an extension. She has to buy smaller items out of her salary to keep functioning.

But up in Broward County across the county line, on the television news; they are already talking, laying off county government and city workers, so things are even worse up there. In Honduras our neighbor, they simply do not pay teachers and government workers for years some times.

Which brings us to Belize for a comparison! Using Comparative Politics as a learning educational tool! What will Belize do now? In a system where the next 20 years of earnings were squandered predicated on a high 5 year average government revenue flow, for some so-called brilliant scheme of borrowing and spend, "growth economics";, pushed by International Lending Banks who wanted to maximize the loan capability of the country of Belize, to skim off the foreign exchange in interest earnings for their lending banks. With Belize being treated these past 3 years like a farm, to encourage borrowing, during fairly high 5 year average government revenues for the interest earned crop flows of International lending bank rapists.

The annual government revenues are starting to take a nose dive into the lower sine curve, of 5 and 10 year average income flows. Because of hurricane disasters and export crop failures with low world market prices, which in a conservative money management system would be factored in. In fact, it is probably guessed that the lower annual government revenues are going to be lower than the actual amounts required to service the huge Foreign International Loans? Even cutting back, to just paying interest only and no principal, is expected to be higher than the actual capability of foreign exchange earnings the country has in government revenues? Which is really compounded, when you also consider that the sell off of utilities to private foreign buyers while a good management move; the guaranteeing of their being to take their profits in foreign exchange outside the country, is playing havoc with the system in this time of trial.

The PUP political party though, throughout the 40 years of their experience, have never practiced conservative public money management techniques. They have always operated on a borrowing and credit philosphy. In an autocratic centralized system, wherein the political party that wins the elections gets to make the rubber stamp legislature, Senate, and Cabinet and whichever Prime Minister is appointed by the party, gets to own the keys to the Treasury and credit of the nation, there is not much anything anybody can do about the constant ups and downs of the Belizean economy. It is constantly BOOM and BUST! There is no level constant steady slow growth curve in increments. The PUP always get suckered by Foreign Lending Banks into operating on loans, presented with a soft sell sales pitch based on wonderful GDP projections, to sucker in politicians that want to get re-elected and make a little baksheesh. What a foreign racket it is, fleecing the naive PUP and Belizean citizens.

Now of course, if we had a steady self reliant, self financed budgetary system, based on middle and lower level governments, and 5 and 10 year projections based on annual income averages, everybody would know that for the coming year, expenditures would have to be cut back about 20 %, to manage. Not nice, but manageable! But what happens now, when you have the keys to the Treasury in the hands of one man? The treasury is bare, the credit is gone! Financial Lending Banks are now going to tighten the screws and holler for their interest and principal, but at least their interest! No more loans except under stringent conditions with extreme controls based on the lenders getting their interest payements. The centralized political system of control does not permit creation and installation of legislation to limit government foreign borrowing, despite the soft soap sales pitchs of foreign banks, to a sensible conservative 12 % to 20 % maximum of average annual projected government revenues based on the averages, but logic says it should. You have to control the tendency of human emotional excesses by law and legal controls. The Foreign lending banks know this fact quite well in these third world autocratic parliamentary centralized political systems. They play on the naive desires of provincial country bumpkins elected to parliament and government, like a Stradivarious violin. You want to get elected, borrow and spend is the way, is their sales pitch! And of course with an overlong 5 year term, by the time a new batch of politicians come in to office, the lessons of budgetary finance have to be learned over and over again, the hard way. Because ordinary citizens are not involved through multi-layered governments and a piece of the revenues delegated to their own responsibilities at about 6 % per district in Belize, as it should be, does not exist in these parliamentary centralized autocratic systems.

So, how will Belize handle the annual budgets between 2002 and 2006 , the projected term from the averages when we will have lower average foreign exchange cash flows? Therein lies the big question under this system, in which one man owns the Keys to the TREASURY and the CREDIT CARD of the country? But we can guess! Lots of countries just like Belize in Africa. Take a look at Africa to find the answers. Or South America! Third World is third world for very good reasons. And it is always political organization the problem, not finance, or human resources. _

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