By Harry Lawrence - Publisher, the Reporter
Money is a tool of production!
There are other tools, such as labour, human resources, technology and raw material. But money is needed to make it all come together. Besides needing money to live and grow and to be safe and healthy, we need it to create jobs. Whether we create the jobs ourselves or depend on others to create them for us, money is still a key ingredient.
Last year and the year before, thousands of people in Belize lost their homes, their jobs and their business.
They became poorer because of the double whammy caused by the collapse of the Development Finance Corporation and the international meltdown of the western economic support system.
The after-effects of this meltdown have been devastating beyond anything we have imagined, even in our own small corner of the world.
Many Belizeans who used to own something - a small farm, some land, savings, a family home, a truck, a mom & pop shop, a boutique, etc. have suffered losses from which they will not be able to recover.
Economists call it a recession. It is a period during which people collectively become poorer.
The first step in getting out of a recession is to understand that we will have to dig ourselves out. Nobody is going to come and do it for us!
The second step is to understand what it is that we have to do.
We have to create new wealth! What is lost is lost. No use crying over it! We now have to find new ways to create new wealth. We now have to restore the money balance so that people and enterprise will begin to prosper once more.
Government has a special role in helping to make this happen. It is true to say that Governments cannot create wealth. That is not its job. But governments can and should do things which help people to create wealth.
This is a special role because there are some things only a government can do. Only a government can pass laws. Only a government can bring about certain reforms - reforms in politics; reforms in the economy.
Government’s most important function is to regulate the economy with hands-on intervention from time to time. For example, it is government’s duty to see that inflation does not run away with the economy by controlling the flow of money. This is a function of he Central Bank.
Government has a similar, just-as-serious duty to make sure that hard times - what we call recession - does not destroy the livelihood of the people of Belize . It does so by releasing the flow of money, making it cheaper and easier to get at.
This also is a function of the Central Bank, but the Central Bank is not empowered to make this happen.
So, there’s the rub!
The Central Bank should be empowered to instruct commercial banks to reduce their interest rates, to free up the money supply. It should be a matter of national priority. Banks enjoy the good times.They should be prepared to share the bad times as well.
The Barrow government seems unwilling to take that step. But it is an action which needs to be taken, because nothing else will relieve the pressure.
This is an old lesson. We should not have to go through the pains and torments of the 1930’s to learn it all over again.