REPORT #608 February 2003

Produced by the Belize Development Trust

According to the most recent Budget Speech in Jan. 2003, the government of Belize under the PUP has a fixed cost of $412 million. There are also fixed costs of $200 Million in government salaries and pensions. The $412 million covers the salaries and pensions and the costs of maintaining buildings, equipment and such. The PUP actually require over $800 million to function per annum, as over the fixed costs, you need money for new road contracts, building schools and classrooms, expanding health clinics and numerous other infra-structure projects, like public housing and so forth.

The income of the government is averaging $380 million a year. Far short of the over $800 million required to function under the PUP fiscal managment plan.

The total debt, both local and foreign is somewhere around $2.2 billion and mounting monthly, due to interest and continuing ongoing loans borrowed to keep ongoing infra-structure projects going. If borrowing were to be stopped this instant, in five years the total debt would probably increase to $6.5 billion due to compound interest.

The government Ministers are continuously bombarded with loan sales people to borrow more money, irregardless seemingly of the ability to pay? These pitchs of financing various and sundry schemes, come from the World Bank, the Inter American Development Bank and banks from all over the spectrum, of lending institutions. Cabinet Ministers find it difficult to refuse loans, due to the scientific nature of the sales pitchs. Most of them have a valid core of genuine rationalization and are sold to Cabinet Ministers on the basis of development through increasing GDP. Though in practise this GDP has not changed much in the last fifteen years.

The bank loan salesmen of course work on commission, and their jobs are based on how well they increase their loan portfolio. There are literally TRILLIONS OF TRILLIONS of dollars looking and competing around the world for someone to borrow. With the use of compound interest, such lending policies are profitable indeed. In fact, the debts of Belize are probably not even 1/1000 of 1% of any famous International Bank lending portfolio. In case of default they would not even make a blip on a computer screen, or the bottom line. Compound interest already taking care of that, through a diversied country lending portfolio.

But how would you govern Belize considering these facts? We have Cabinet Ministers chauffers receiving around $70,000 a year which includes overtime payments, while substistance farmers in our Southern District grow their own food and have a cash flow of $400 per year. Somewhere in between these extremes, the normal Belizean lies. The average middle class Belizean in towns probably earns less than $7800 a year. The farmer much less, probably in the $1500 a year range. Last estimated count put the population at 182,000 thereabouts. The number of voters is around 120,000.

You have $380 million a year as average government revenue. HOW WOULD YOU GOVERN BELIZE? Last tax estimates project a tripling of government taxes, permits and fees in four years, in order to cope with just holding still on loan payments, due by the government. HOW WOULD YOU GOVERN BELIZE?

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