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GOB, Broke And Busted #542251
05/09/20 05:15 AM
05/09/20 05:15 AM
Joined: Oct 1999
Posts: 72,057
oregon, spr
Marty Online happy OP

Marty  Online Happy OP
And while the Prime Minister had time to send well wishes for a colleague with whom he has often sparred, he had no kind words for the Public Service Union.

As we told you, his government and the PSU are locked in a dispute over annual increments. Government wants the Union to fully forego this year's increment, the union wants it deferred so that they can get it back sometime down the road when government's finances improve.

As we have been reporting, those finances are in the gutter right now. Because the country and the economy has been on lockdown, revenue collection has gone down by more than half. This leaves them with not even enough money to pay public officers, according to the PM:

Rt. Hon. Dean Barrow - Prime Minister
"Consider finally that the Government's monthly wage bill is 45 million dollars. That means that the 41.2 million collected from business tax, GST and Customs in April could not meet that 45-million-dollar monthly wage bill. The story still does not end there because there are, of course, Government's other operating expenses. These include debt service, utilities, supplies, fuel, and capital spending; and they amount to another 45 million dollars for a total Government of Belize monthly outlay of 90 million dollars. But, I repeat, we only collected 41.2 million dollars in April and expect no more than 30 million altogether in May."

Channel 7

Re: GOB, Broke And Busted [Re: Marty] #542360
05/15/20 04:49 AM
05/15/20 04:49 AM
Joined: Oct 1999
Posts: 72,057
oregon, spr
Marty Online happy OP

Marty  Online Happy OP
Government Facing Chasmic Deficit

So, we are back to an impasse - the unions on on side; government on the other. And between them a 300 million dollar chasm. That's right, government projects its recurrent deficit will be upwards of 275 million dollars.

And, the PM says that when you're 300 million dollars in the hole, the kind of cost savings that the unions are talking about don't count for much:

Rt. Hon. Dean Barrow, Prime Minister
"Let us not fool ourselves, let is not try to have any one suggest and get away with it that we would not be where we are, or we could get out of where we are by effecting cost savings. There is no cost savings that can be possible to the extent that would relieve us of more than as I said this small savings of 75 million dollars, not small general, but in the context of where we are, leaving us with a deficit of basically 300 million dollars. Don't let us misunderstand what is happening and what is happening to us is happening to every country. There is no point talking about what you could have done in the past, what was not done at any particular juncture. The richest countries in the world are catching their tail. The only way, I repeat, you can bring the finances back into alignment is if if you cut salaries and cut staff and I also repeat I am not prepared to do that."


Retrenchment Down The Road?

And those tight finances that the PM just described is when regular folks would say "things di buck!"

Indeed government's finances are in the gutter and they are facing a recurrent deficit of close to 300 million dollars.

A large part of the recurrent budget is the wage bill - which we were alarmed to hear is now listed at 688 million dollars - when two months ago the PM said it was 140 million dollars less!

We asked about that today - and the inevitable eventuality that - at some point down the road - the fat will have to be trimmed from the public service:

Jules Vasquez- Reporter
"In your budget presentation you said the wage bill was $540 million. You said just now it is $688 million if I understand you right, with pensions. Obviously, we know and it is an increase twofold from when you took office in 2008. Obviously, at some point we know that the wage bill is a cat that will have to be billed. Somebody at some point has to say well the Government has to contemplate retrenchment or some adjustment of its non-contributory pension scheme."

Rt. Hon. Dean Barrow- Prime Minister
"I think that it is part of my charge. As long as I am sitting where I am, to try to protect the public officers for as long as possible. But I will say this, and it is also what I told them yesterday, I will hold on as long as I can but a day of reckoning is coming. All this business about or quibbling over when and if the economy will recover and the extent of such recovery. That is not idle but any sense of serious optimism about a strong early recovery is entirely misplaced. We don't want to kill hope but why would we fool ourselves into thinking that there will be some kind of springing back with respect to our economy. All that so as to say that ultimately and maybe that is the solution, ultimately as part of our efforts at recovery, who comes next, in my view will more likely than not have to talk to the IMF. Who comes next will have to talk to the IFI. Who comes next will need assistance, serious funding assistance. They won't give you the assistance that you require except they say, 'aha!' you will no longer be able to proceed as though you are heedless, you've been telling you for years and years. A conditionality or a condition for the assistance that you will need is in fact pension reform, is in fact the trimming of the wage bill, is in fact, retrenchment in the public sector. Now, if I were still in play I could sit here and tell you that I will find a way to dodge that. but when you don't have to face the music, you can pretend to be the most skillful dancer in the world, you know. Bottom line is, I grieve for my poor Belize and I certainly extend my sympathy from now to those who will have to deal with that particular problem because Jules, you are absolutely right. There is no way we will be able to postpone for any extended period beyond this crisis, coming to terms with the IMF and the other IFIs."

Channel 7


Foreign Reserve Below Three-Month Import Cover

The tourism industry is practically on life support. It accounts for about forty percent of the gross domestic product and is a huge foreign exchange earner. And while domestic tourism is back in play, it can never meet the millions of dollars in revenue from international tourists. There has been talk in the private sector that with the economic fallout, foreign exchange will be hard to come by. The Prime Minister says that it is below the three-month importation mark.

Prime Minister Dean Barrow

“I don’t know exactly where we are now. It changes from moment to moment. We are certainly below, I would hazard and I think the last report that the Central Bank confirmed that, were certainly below the three months import cover that ought to be the benchmark. We are nt yet though at a point where the Central Bank has to step in and ration the foreign exchange disbursements. The commercial banks are still in fact serving their customers who need foreign exchange to continue importing. I believe though that between the commercial banks and the Central Bank there is a kind of priority list that has been developed but the short answer to your question is while we are not where we would want to be or ought to be in the middle of a pandemic we are still managing up to this point in time.”

G.O.B. Maxed Out Commercial Borrowing

With a burgeoning deficit of over three hundred million dollars, Prime Minister Dean Barrow says that the time has come to trim emoluments and pensions which stand at a whopping six hundred and eighty-eight million dollars. The international financial institutions have been advising his government to do so for quite some time now, but the PM managed to avoid taking the bitter pill. According to the Prime Minister, due to the harsh and crippling economic impact of COVID-19, international institutions such as the IMF would strengthen their call for government to reduce debt. And as he makes his way out of office, PM Barrow warns that whoever becomes the next Prime Minister would need to go to international financial institutions for necessary lending post COVID-19.

Prime Minister Dean Barrow

“However it is pitched, there is this now in my view deafening cry on the part of the international financial sector , on the part multilaterals for some kind of debt relief, for some kind of debt standstill,, some kind of possible debt forgiveness to take place. We are naturally anxiously following this discussion. The next superbond payment is due on August. We want to see where this discussion will lead before we take position and begin some sort of a conversation with our bondholders. On the other hand, there are those who would say that the writing is very clearly on the wall. If I wanted to take the view that because my departure from electoral politics both inevitable and imminent, depending on how you describe imminent, I could not worry about various things. I would then cop out of this whole contretemps if you will with the unions. I could say what does it matter if I agree with you that in two years time you get it back. I won’t be here for you to collect it from but I don’t think that is responsible. I don’t think that is fair. Ultimately as part of our efforts at recovery w ho comes next in my view will more likely than not have to talk to the IMF. Who comes next will have to talk to the IFIs generally. Who comes next will need assistance, serous funding assistance. Any chance of further commercial borrowing is shot. So we will have to go to these people and they will extract their pound of flesh. It is a kind of old automatic. They won’t give the assistance that you require except if they say, aha you will no longer be able to proceed as though you are heedless to what we have been telling you for years and years and years. A condition for the assistance that you will need is in fact pension reform, is in fact the trimming of the wage bill, is in fact retrenchment in the public sector. Now, if I were still in play I could sit here and tell you I would find a way to dodge that but when you don’t have to face the music, you can pretend to be the most skillful dancer in the world you know. Bottom line is, I grieve for my poor Belize and I certainly extend my sympathy from now to those that will have to deal with that particular problem.”

Channel 5

Re: GOB, Broke And Busted [Re: Marty] #542497
05/21/20 04:53 AM
05/21/20 04:53 AM
Joined: Oct 1999
Posts: 72,057
oregon, spr
Marty Online happy OP

Marty  Online Happy OP

Steep $$$ Cuts, No More Folgers In Gov’t Offices, Bring Nescafe!

Government's finances are in the trash right about now; due to COVID 19, revenue collection is about half of what it used to be - and government is borrowing to pay its bills, and its public officers.

A circular which went out yesterday from the Ministry of Finance shows how acute it is.

Circular number 6 of 2020, dated May 19th warns public officers about a reduction in their monthly budget. It says, quote, "we are faced with the need to further curtail recurrent expenditure...Effective June first until further notice de-reservation of funds, except for personal emoluments will be reduced from 1/12th to 1/20th of the approved estimates." Now that probably just sounds like bureaucratese so we asked the Financial secretary via telephone what it means in real terms, and what it is indicative of for government's finances generally.

He said this "cut to the bone" basically means that the days of Folgers Coffee and Coffee Mate in government offices are done! From now on, it's bring your own Nescafe, with Klim!:...

Joe Waight, Financial Secretary
"Actually it's an attempt really to try to squeeze where we can to generate some savings and savings is not the correct, its more deficit reduction maybe the correct term, because simply we do not have. The revenue has collapse. A good day we may get in about 50% maybe little lower, but we really have to trim our sales to meet and back of the envelope we'd lucky to get 60 million dollars savings if we sustain, but even within those lines there are certain things that can't compress very much including say supplies to medical supplies that we are buying, some subventions we can't touch like to say the hospitals. You know there are some subventions to the education system which we have to be very careful how we manage and then the big items like street lighting and things that are almost a given, but I am confident that the people within the public service, the finance managers and the CEOs who manage their budgets are sees with how serious the problem is."

Jules Vasquez, reporter
"Is there a real world example you can sight of something that will have to stop as a consequence of this cut?"

Joe Waight, Financial Secretary
"Purchases of basic supplies. Over the years some things have crept in, beverages, coffee and all of that, uniforms for staff - things like that will be easy things to give up."

Jules Vasquez, reporter
"One has a concern that things may be starting to reach a tipping point or a critical point insofar as we've seen what Tropic Air has done - 220 employees. There are rumors that Maya Island may be force to do the same. We know that the government is reaching a point where it will have to at some point start to look at its wage bill and start to see if it can make trimmings there. Are we reaching a critical juncture or a tipping point in finances both public and private where without an immediate infusion and a sustain infusion we just won't be able to hold it together?"

Joe Waight, Financial Secretary
"We can borrow, yes we will do what we can, but again, we don't want to go a point where we go into an irreversible situation, so we will have to trim our sales more and soon."

Jules Vasquez, reporter
"And that includes wages?"

Joe Waight, Financial Secretary
"Yes, yes. Now how soon is soon, we'll try to hold off as long as possible, but it is coming."

It's a grim prognosis, and we asked the Fin-Sec if there is any prospect of improvement on the horizon. He said they are waiting on tourism, which may be a vain hope:

Jules Vasquez, reporter
"They always say every problem has a beginning, a middle and an end. We are yet at the beginning, are you seeing the middle and the end anywhere on the horizon?"

Joe Waight, Financial Secretary
"Not really, because we really don't know when the economy will start to rebound, all depends on tourism and that's a big open question. I don't think until there is a vaccine people would be wanting to travel and even if they want to travel probably to take a vacation, I don't know if people have the money to take a vacation anymore. You see the unemployment figures; you see the devastation to the economies in the US and in Canada where we get most of our tourism from. I don't think that anybody will take a vacation anytime soon."

Channel 7

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