REPORT #221 April 2000

Produced by the Belize Development Trust

Ray working on the Library
"Hmmph! Why don't those young bloody fools in Belmopan use common sense", was the often used quote of 83 year old, Valentine Alamina of Caye Caulker village. The answer of course, was because 'common sense isn't so common!'

The Belize Electronic Resource and Development Library is read around the world. The Development Issues section often gets e- mails, from remote exotic countries in places we have never heard of and cannot even find on a map. It seems that even United Nations eggspurts are also reading the library.

A report in the United Nations last Tuesday has raised good governing, or bad government, as the TOP priority in fighting poverty by the development program's new administrator, Mark Malloch Brown. Without good governance, reliance on trickle-down economic development and other traditional strategies will not work, the report concludes.

Battling poverty in the Third World by traditional methods needs to be re-thought, the report says. The question is; why does poverty persist in an era of substantial economic growth and political freedom?

The report went on to say that democracy alone is not enough. Even democratic reforms with regular elections that are free and fair only seem to contribute in a small way to accountability. But these things seem not to be a vaccination against poverty.

The report goes on to explain that "LOCAL GOVERNMENTS" are often non-existant in the developing THIRD WORLD. ( "You listening you selfish old port Belize City townies who treat government as a private corporation for your own convenience?) Local governments play a critical role in reducing poverty. ( Well thankyou Mr. United Nations- welcome to the party about 12 years too late.)

"Historically, foreign aid has gone to Central Governments." ( Amen brother!) Now donors are insisting money go to NGO's instead of government. More effective use of limited funds and resources. ( Hallelujah and praise the Lord!)(I'm being sarcastic, not religious!)

Which as an afterthought, brings us to outmoded economic theories. It is a fact of life. The only thing constant is change! (Put that sentence in your cud and chew on it for a while!) Economists are usually 20 years behind the times, becausing of the constant of change. The world is always re- adjusting. By the time you get an economic theory figured out, it is obsolete. It was interesting to see our Minister of Finance promote an old economic theory of GROWTH ECONOMICS. By borrowing money and investing in infra-structure you supposedly increase your earning capacity. Indeed, this theory was the hot thing back 30 or 40 years ago and had a lot of validity at the time in THIRD WORLD countries. But third world countries are still third world countries and always will be. It is more of a classification on manufacturing countries, versus agricultural, primary product countries nowadays. The meaning of a THIRD WORLD country has changed over the last thirty years. But GROWTH ECONOMICS has changed also in the last twenty years. Most third world countries have stabilized. We don't have that much change in Belize anymore, things have leveled out. There have been no studies by economics students from the University College of Belize ( faculty and administration are not doing their job! ) But we should have statistics now, that would give us an exponential average of the annual revenue of the Government of Belize for the last twenty years to do projections on. A guess estimate would be around $250 million a year to run the Government of Belize on.

Recently in the annual budget speech, the Prime Minister claimed a growth rate last year of 6% and a projected 10% growth rate for the next three years of 10%. Pure political rhetoric bombast and anybody who believes that should see me about a bridge I have to sell in the Cayo District, called the Hawksworth Bridge. You could make a lot of money with a toll booth.

The Economics Unit, whatever that is, was quoted in the newspapers in Belize of saying the actual growth rate last year was 2%. Which is more common sensical. Sort of what you would expect from controlled immigration, some smaller emmigration and a slowly rising birth rate. We know the government revenues have levelled off and the country has a diversified economy. Things go up and others go down. Sugar is down this year, but acquaculture exports have risen to be the third largest export foreign exchange earner. The government has to operate, on around $250 million. It doesn't of course, cause the PUP party in power have never ever been able to run the country on a fixed budget in their history. They are basically spendthrifts and lack the foresight and acumen to develop sustainable government systems. So they borrow foreign loans from abroad, thus ruining any chance of sustainable self reliant government.

The Economics Unit report of a growth rate of 2%, sort of punched a hole in the GROWTH ECONOMICS balloon theory of the Ministry of Finance. Actually, we are just barely staying even, treading water and taking deep breathes between waves. Mostly, because the foreign loans are a weight on our feet pulling us down. GROWTH RATE AND GROWTH ECONOMICS was fashionable and valid thirty years ago. It no longer is. The constant of change again. Obsolete economics and all that. With a diversified economy, the only way to bring back a temporary growth rate and growth economics is through the introduction of NEW industry paradigms.

We had one last year. It was the hoped for Corozal Free Trade Zone, internet ISP, international e-commerce thingy. But the PUP cabinet shot it down. Which they can do, as the United Nations say, because of bad governance systems, which is now the top priority identified by the UN as the major failure in why third world countries like Belize remain poor.

GROWTH ECONOMICS is not working, so why borrow more? Where are the solutions? Well, we have covered this stuff in the Development Issues reports until I am as sick of writing about it, as the regular readers are of reading about it. Basically, in rough lingo, the Government of Belize has to re-configure itself to run on $250 million a year, or some such figure. The townies from the old colonial capital who control the political process and the government largesse under the old African style British Colonial plantation model of government resist that solution. They simply point fingers and use rationalizations and throw out all kinds of excuses. Anything but lose control of the Treasury and the political power process. Selfish self interest first in their eyes. No patriotism, just excuses. Even the University students are apathetic says Toledo Maya villager Valentino Shal over at school there. They just want to get a degree and a job, from a government that has no money, to make jobs for them. They don't care about patriotism, anybody else, or the country at large. Shortsighted bunch! Either that, or the UCB faculty are not spending sufficient time on Belizean issues. Too bogged down in offshore academic requirements and curriculums I expect. No humanities in the program???

Even our Prime Minister who means well within his limits is trying hard to de-centralize, but without federalization, through geographic representation equality, the de-centralization will probably cause more problems than it will solve. The two have to go together. The United Nations have finally realized that it is the way we govern that makes the difference. Not how much money is available. Belize has many solutions, but which the townies frankly admit they have no answers in their governing system. The townies say they have not enough money to put government services in the 288 villages in the nation. I agree! So change the governing system to achieve that goal! Lots of places in the world do just that. The Electronic Library has examples and sources under Civics ( I think it is - it's there some place.) You want me to tell you how? I'll make you sick you asked, with the volume of suggestions.

If growth economics and trickle down economics is not working, then change the paradigm. Or is there private ego and pride involved and the country has to suffer for that? GROWTH ECONOMICS was a valid theory thirty years ago. But today? What it has done is changed to something else. Just like the World Bank, the Inter-American Bank and all those supposedly specially created banks to help small countries in the THIRD WORLD. They were originally supposed to lend poor countries loans to build infra-structure to promote GROWTH RATE at a 2% interest rate. Called a soft loan. Bet you can't find a 2% soft loan from any of those banks balance sheets in the last five years. Want to bet a $100? What the GROWTH RATE is today, is an INDICATOR for these banks and other lending institutions and foreign countries, to judge your ability to pay off a loan. If you have a high growth rate, then you become a sales target to get you to maximize your borrowing in the name of the country, for the benefit of the balance sheet of the lending bank, not your country. They now want you to borrow loans to make their own bank's balance sheet look good. Secure their jobs. This is born out by the rise in their interest rates for such loans. They solicit business by giving you a few sweet free GRANTS, in order to soften, and beholden you, in order to sell you on a big loan later on. The intent to help build infra-structure in poor third world countries is no longer there, or a minor effect. But it is a good sales pitch for their salespeople to sell you a loan. When the growth rate indicator goes down, then suddenly they must dry up the loans and squeeze you for payments and get you to sign over controls and qualifications on the old loans. The story changes. The only thing constant is change! Mull on that a while.

Sustainable government! Can Belize become self-reliant? Of course, it is fairly easy. Will it? Ahhh! Now that is another question of interest. Not if Valentino Shal our firebrand articulate Mayan Hill country villager, student at the Belize City University College of Belize, doesn't get off his butt and form a new political party for the next elections with that very intention. He's the only bright spark on the horizon. Otherwise, we are stuck with Musa, a good administrator, but not likely from appearances to do what the United Nations suggest.

To form local governments, geographic representation, District GRANT mechanicisms and matching funds for the distribution of finances and political decision policy making. These are some of the solutions and lots of Belizeans are waiting and ready for it, both at home and abroad.

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