Saturday, March 27, 2010




We wonder as government watchers; how the Department Heads of various functions in the centralized system of government operations will rise to the occasion, as budget cuts, FORCE re-adjustments to the way we operate the Belize government?
It was thanks to the PUP Opposition in this week, last House sitting in our Parliament, that we became aware of current budget cuts across the board of government operations. The PUP Opposition of course used the budget cuts to criticize the government. In their political world, everything the UDP in politics do, is BAD, and everything they the PUP in Opposition do is GOOD. So the twist to the budget cuts announced by the OPPOSITION PUP, while used as ammunition in the never ending propaganda campaign, to influence voters, alerted us to some phenomena going on in government as something bad; actually came as a pleasant surprise to us.
We are going to award the government UDP in power an additional 5 points to their performance REPORT CARD, for implementing the budget cuts.
The thinking here goes like this! As a life long sailor, seaman and captain of vessels, one learns quickly to “be prepared” and take what comes with storms, reefs and less desirable events that face any person who has spent a life dealing with the unforgiving characteristics of life lived on the sea. We know the sea does not care one way or another, about what we decide to do, and it us alone that can only face the weather that is thrown at us. To survive, you must be prepared and respond in a timely manner. In my later career as a financial trader, one learns the same mistakes, that one can make to your bank account. The financial markets care not one whit about your circumstances, you must always have financial trading contingency plans.
The announcement in the Parliament by the PUP Opposition, of the current budget cuts by the UDP government, comes as a pleasant surprise. We take this as the proper approach to changing financial weather.
That said; now the exercise is obviously under way, we would guess the first cuts are 10% ? In our rough thumbnail subjective judgment without statistics, we can foresee over the next 18 months additional cuts of about 30% more. This would be roughly an additional 5% budget cuts necessary per quarter, as the next 18 months progresses. After that a review of the situation would be needed.
The question arises; is this a prepared contingency plan, or is this forced upon us by changing financial weather? Either way, we judge the budget cuts the proper response. With the alarming, budget reporting, in the House Sitting and the DEBT to GDP ratio at 107% of GDP, there is cause for great alarm. Nevis and St. Kitts Prime Minister yesterday on television was flaying his OPPOSITION in that twin island small country, because his Debt to GDP ratio was 170% and his OPPOSITION were saying it was the WORST IN THE WORLD. The ratio of course; expresses in formula form, the usual inadequacy of amateur and corrupt leadership found in democracies. To be properly good, the debt ratio has to be below 3% of GDP, the European Union say.
We try to put the dots together, as we observe and listen to both political parties explaining what is going on with government. From this we form opinions. Connecting the dots, means that the recent series of seminars on the NEWS, for government employees, in not being afraid of CHANGE and how to handle change in the way the government is run, is a pre-planned response to changing fiscal weather. Another DOT to be connected, for this first quarter of 2010, is that tourism has recovered and oil exports will increase, and barring a Hurricane strike this season, or torrential rains over Belize and Guatemala causing flooding, all is right with our ECONOMY of BELIZE. Things are back to normal we judge! The local private sector recovery has been fairly rapid and did not consume more than 18 months of a recession, due mostly to outside world financial crisis’s. That said; then whatever revenues with increased taxes due in another week to be implemented, will give us ball park figures on how much revenues can be expected to receive and actually has to be spent on government, by the time, interest payments are paid on outstanding government debts of past current administrations. From this we can allocate and extrapolate the future abilities of the money available, to run the government of Belize.
Obviously, past policies of running the government of Belize on borrowing loans, both foreign and domestic is no longer going to work. Thus the financial weather forces changes, a revolution if you will to the way our centralized government is being run. This means that Department Heads are on the forefront of the battle, for re-organizing and restructuring our government operations into an affordable, self sustainable model. Some department heads are obviously going to be casualities in this revolution, as the nation adjusts and changes the way government services are rendered. Priorities will shift and a lot of DEADWOOD bureaucrats will be discarded, as we no longer have the inflow of loans to sustain them. The balancing act is going to be a NEW GOVERNMENT, based on our ability to pay, according to the economic figures we receive one year from now, for 2010. Which are going to be our normal revenues to run this country for the next forty years probably? A lot of this is guess work. Politics will play a part of course, as those with the political muscle, will struggle like hooked fish landed in the bottom of a boat, to feed off the tax trough, we no longer can afford to feed them with. Next year 2011 this time, looks to be an interesting time! The changes are going to take place now for the next year and probably another year after that, before we arrive at a rational self sustaining model of private sector production and graduated government costs that can be afforded. Somewhere in there, over the next 18 months, the civil service is going to be faced with some monumental changes in the way we do government business, and only the strong, smart and efficient will survive. I believe we have the talent in country. If education is any guide, we should have! This is not like the old self government years when nobody had even a Bachelors Degree in any subject.
As the Chinese proverb says: “May you live in interesting times!” The civil service of Belize are going to find that very interesting indeed, as they must by force of stormy financial weather coming over the horizon, beyond their control, re-structure this nation of Belize and how it is run. The old colonial model no longer works and has not for a very long time.

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