In the beginning there was one government….it taxed the people and provided services based on those taxes….through its various line ministries.
Then….the public sector entrepreneurs started special-interest projects….with the guise of improved services through better management….with “cost-recovery” mechanisms….replicating all kinds of quasi-government statutory bodies out of these projects…most with special “laws” that these bodies would write for themselves…with their built-in authority/right to “tax”….but without the fiduciary responsibility to account for those “extra-budgetary” revenues. The line of authority still ended with the Minister under whose portfolio the statutory body fell….so the MINISTER ruled in the CENTRAL GOVERNMENT…..and the NOT-SO-CENTRAL GOVERNMENT….he became a king with two fiefdoms.
So it was….that the politicians built….a house for themselves and their favorites….outside of the house where the voting public has a direct say.
The Belize Tourism Board (BTB) is one of those houses. The Minister of Tourism is at the head of the line of authority….it has a Board of Directors that is appointed by the political directorate of the day, but which is mostly rubber-stamp….and it has its own law that gives it authority/rights to collect taxes and license fees…. with its own “tax-collectors “….among them, the Hotel Tax….which is many millions of dollars in revenues each year. Every year, it hosts a gala event to present an Annual Report, which mostly focuses on arrival statistics and some of the superficial activities undertaken during the year….its detailed “audited” financials are under lock and key….but in closing, there is a big party with enough free expensive wine and liquor to celebrate the “achievements”….not of the BTB….but of the “industry”. Of late, we have heard of ramblings and “resignations” from high offices…but no one in Belize, in their right mind, expects any investigation or corrective measures. The government outside the government remains intact. The BTB is to do all what a Ministry of Tourism is to do….but we now have to pay for the BTB….and for a separate Ministry of Tourism. One has to wonder what does the Ministry of Tourism do?
Since Independence, Belize politicians have created a plethora of these statutory bodies and public corporations…..BTL, BEL, BWSL, DFC, BSSB, PACT, BIL, NICH, Free Zone Management Authority, Export Processing Zones Board, BELTRAIDE, Coastal Zone Management Authority, Belize Agricultural Health Authority, Central Building Authority, Solid Waste Management Authority, Trade License Board, IMMARBE, Belize Intellectual Property (BELIPO), International Business Companies Registry, International Insurance Services Authority, KOLBE prison, Border Management Authority, Belize Port Authority, Belize Airports Authority, Belize Transport Authority, NEMO, NEAC, Belize Marketing and Development Corporation, Land Management Authority….and the list goes on….all of them with their own self-written law which gives them authority/right to charge fees for their “services”….and to modify those fees if and when they see it fit. Most of them have a Board of Directors made up from political appointments and persons directly invested in the specific sector….with “management teams” that have become a part of the furniture by perfecting the 6:30 dance….they call it self-policing.
Together, this government outside of government collects and controls as much money as does the Central Government of Belize…..but this is not reflected in your Annual National Budget….nor is there any requirement for timely annual publication of their detailed audited financial reports.
With this parallel government operating and budgeted for…..most of them still receiving substantial “subventions” from the public coffers as part of their “revenues”…..one has to wonder what is left for the Central Government of Belize to do? But each line ministry still add “increments” to their budgets each year….
As this top-heavy reality has grown out of proportion…..so has the competitiveness and productivity of the Belize economy declined….raising the cost-of-doing-business to astronomical levels….reducing the chances for turning an honest profit from an investment….and creating the enabling environment for corruption to systematically spread horizontally and vertically….across the public and private sectors. Belize now boasts its status as one of the toughest places to do honest business in the world.
The construction of this second government….is the principal contributor to the touted growth of Belize’s SERVICES ECONOMY….which I dare say is false….with an ever shrinking PRODUCTIVE SECTOR. Many of these “statutory bodies” need to be re-absorbed back into the line ministries, with a major reduction in cost of providing those services by reducing the fees and including them in national budgets. Some of them can be kept, but they must be required, like private corporations, to publish their detailed audited financial statements…their legal ability and methodology for modifying fees revamped…and their management structure, line-of-authority, performance appraisal and rewards and punishment made more transparent and accountable.
Services are built around production systems…..not production systems around services…and their cost-benefit to production systems should be enhancing….not like a ball and chain.
We have banks, insurance companies, shipping and port services, utilities, transportation services, etc…..because we have sugar, citrus, banana, marine, papaya and other production….not the other way around.
There are those “leaders” among us who think that Belize, with its low level of technology and innovation capacity and capability, can depend on sustainable growth of services businesses alone to provide a decent standard of living for its people….and thus they pander to those interests diametrically opposed to the fomentation and growth of the productive sector in Belize.
This is what has lead us to casino one-arm bandits…internet gambling….paper Trojans IBC’s and “Trusts” and “asset protection” gurus…”free zones”, “export processing zones”, and money laundering, drug peddling….MegaBingo, Fantasy 5, Lucky 3, Lottery, Boledo…an NGO representing foreign interests around every corner…more “real estate agents” than nurses and doctors….trading and flying the Belize flag on ships for convenience….persons trading and carrying the Belize passport, permanent residence and visas for convenience and human trafficking.…and the busiest streets lined with cover-up “front” businesses….fake, fake, fake robust and growing “SERVICES ECONOMY”.
Touch the ground Belize….take your head out of the clouds.This article was written by Richard Harrison, Belizean investor in production and services businesses in Belize. He holds a Masters in Business Administration degree from Lancaster University.