It is a sad fact of life, that the third world has been enslaved in DEBT PEONAGE, using the technique of COMPOUND INTEREST. As the ex-President of Nigeria said, back in 1986, they owed $5 billion dollars and paid off $16 billion and were told that they still owed $28 billion dollars. He blamed COMPOUND INTEREST, the most savage weapon in the world against third world countries. World Bank and other lending institutions, train and send off their loan salesmen to third world countries like Belize, selling GDP growth through expanding infra-structure loans at compound interest. There is always a logical reason given by salesmen to gullible local politicians for doing infra-structure immediately, by using the offered loans; rather than waiting a bit and paying out of our own revenues. Could we rather pay for our infra-structure as we go, out of revenues? Is there anything that is so urgent for our current population level?
In Belize, we owe $2.2 billion and if we were even able to pay it off, the amount to be paid would exceed $5 million within five years due to compound interest.
What will any new government do about such debt peonage enslavement? They will have a difficult time trying to figure their way out of this trap.
The PUP claim that population explosion, to over half a million people over the next five years in Belize will automatically raise the GDP and erase this debt. The PUP financial policy plans are declared as a continuation of borrowing and spending. The only real question in the Belize public's mind, is what is going to happen to our small jewel of a country, if you keep expanding the population through immigration? We are already finding whole niche resources disappearing at a fast rate, from pine building lumber, to grouper and conch. Even the Whale Sharks are disappearing from pressure of population visits. Do you really want any new government to double in size our population in Belize to eliminate the national debt? Traffic would really get terrible then.
The Belize Development Trust has floated one idea to create a debate, of making a NATIONAL BANKRUPTCY ACT. It has merit, but so far there has been no debate on the subject?
The UDP claim they will seek debt forgiveness and restructuring of the national debt.
The WTP are still thinking over the different options and understandably concentrating on trying to get sufficient seats in the House of Representatives to create a nationwide debate on this subject, under the guidance of WTP Movement Leader, businessman Francis Gegg.
Whoever makes up the new government have some really hairy statistics to deal with! The PUP in the last five years have been operating the government on about $1.1 billion a year, allowing 11% slippage, for corruption as an operating norm. Most of this money has been borrowed, as the government annual revenues are running between $360 million to $400 million a year. Obviously there is a great big gap between what the government is spending and what the GOB is earning and it shows no end in sight? At least under the PUP? Whether the PUP idea of a population explosion through immigration into Belize is a desired solution is a separate debate? Though that solution might work, but would simply destroy the ambience of the Belize we know today. How much do we rely on the ambience and pleasant living and recreational facilities going along with a small population? Should we keep the population small? Or turn Belize into a congested Salvador? Do we like the current population to land ratio, or are we willing to change it in favor of millions of citizens living in Belize?
The UDP on the other hand, indicate that they were more successful in the past and amenable to some restructuring of how we financially govern, to bring things in line with our revenues. But even they were never totally successful at arranging the finances of Belize so we could hold our head high and be self sufficient and independent.
Businessman Francis Gegg leader of the WTP, claims he has business solutions to such problems and can solve them. We have had forty years of port town lawyers running the country, maybe it is time to give a businessman a chance?
But the statistics are sobering! We need $200 million to meet payroll of the government and pensions. We need $250 million to meet interest payments on our debts, which under compound interest would not stop the debt from growing exponentially. Such payments would not reduce any principal on our loans and we have to pay interest on our interest. Debt peonage and enslavement is true enough, right now in Belize.
About $185 million goes to just ONE, of the eight towns in Belize, the old colonial capital of Belize City, which is almost 95% supported from central government revenues. That is a lot of families depending on the government payroll and other discretionary spending. Plus, this same Belize City gets the lion's share of revenues, or about $150 million a year in infrastructure spending. It would have helped a little bit, if re-districting of the electoral divisions had been done, so that the fast growing West Cayo District got it's fair share of the money annually. But Cayo District lost 3 electoral divisions through illegal manipulation of the electoral and boundaries Commission and Belize City and the political machinations gave three undeserved electoral divisions AGAIN, to Belize City the port. Which translates into TENS OF MILLIONS OF DOLLARS IN payroll and infra-structure spending, to the detriment of the heavily populated Cayo District who should have got three more elected representatives to argue their case for money at budget times.
The problem is; that during the last five years, we have got used to spending $1.1 billion a year. Our government costs more than our income to run, at about $412 million in fixed outlays, versus the revenues of $360 million to $400 million. Our debt load, just forget it, the numbers are off the charts, the needle is pegged way over hard against the overextended peg. Taxes either have to quadruple in the next three years, and quadruple again very rapidly, or we have to find a half a million people to move to Belize and raise our GDP to match our spending habits.
Difficult questions indeed for whoever the new rulers, or whatever will be, in the next five years, after election day in about 48 hours.