BELIZE - The difference in thinking on the debate on National Debt and Development of the economy

ECONOMIC DEBATE ABOUT DEVELOPMENT IN BELIZE, BETWEEN THE SUCCESSFUL BUSINESS PEOPLE AND THE SALARIED ACADEMIC BUREAUCRATIC MIND SET.

That is a bunch of baloney!   First off, to be self reliant, we need to NOT EVER AGAIN use commercial debt.  If we force ourselves to do so this way, that is a good thing.  It is pretty hard for a state the size of Belize geographically with the small population it has, to do much more in the sense of economic advancement.  As our population grows, so will the economic opportunities, particularly in light manufacturing.  We lack the entrepreneurs among the younger generation coming up.  It isn't the lack of opportunities, but lack of self starting, bootstrap capablility. A mental outlook problem! That is coming, slowly but surely, as our numbers grow.  We can short cut that a bit, if we encourage successful business types from other countries.  That have already learned the lessons of entrepreneurship.  Most lessons of which, can only be learned by trial and error. Academic education helps, but the real test of learning is HANDS ON practice.  Nothing like getting your feet wet and going broke small scale, a few times, to teach you the do's and don'ts of successful business experience.  If you want to blame the credit crisis on somebody, name them? Said, Fonseca and Godfrey.  ( End of story )  Blame also a country whose media, is port town based and think they know it all.  They still believe in GIMME DOLLAR, or BORROWING is the only way to get ahead.  They do it differently in the districts, it is pay as you can go, and some at least are learning to sell shares in their business ideas, to raise capital.  THAT IS THE WAY TO DO IT PROPERLY.  Since our culture is dominated by the CREOLE lend me money loan crowd of the port town, until that changes, nothing will much happen, that and the buildup of our young human capital, outside of the port town.  The economy is going great in the Mennonite areas, they only go to PRIMARY SCHOOL level.  Then they LEARN by HANDS ON. Trial and error!

  We also have too much in overhead for infra-structure for our small population base. Nothing you can do about that, but suck in your tummy and tighten your belt, and be leaner and persevere more.  Success in economics comes with BULLDOG tenacity for your dreams.  Not from a College or University.

  Buses leave every day down here on the highway, picking up people to harvest citrus from the trees. Where are those unemployed of the port town?  Too much work picking citrus?  Pah! Let them cry and shoot each other over pennies and personal slights.

  We neither NEED, or WANT foreign loans and credit, other than infra-structure stuff, in a smaller controlled manner from regional institutions designed for that purpose, at low interest rates. Belize will grow stronger economically and better, as the population naturally grows and apply the lessons of selling shares in your new venture to family and friends.  e.g: Espat family I notice in the media just SOLD their shares in Belize GRACE KENNEDY to the Jamaica outfit.  Now THEY did it right, not the port town idiot theories on LEND ME THE MONEY, or GIVE ME DOLLAR mentality.

---

From: innovate belize
To: bz-culture@psg.com
Sent: Sunday, October 14, 2012 8:18 AM
Subject: Bz-Culture: Small Caribbean states can't afford to follow Greece ?

SOME small Caribbean countries are in danger of acquiring the reputation as failed pariah states.

States are regarded as failed for three reasons:

First, they have shown themselves to be incapable of successfully performing the first task of a state, which is to keep law and order within the national borders of their territories.

Second, they are incapable of protecting their populations from external aggression and invasion, as is evident in the uncontrolled penetration of transnational crime and drug trafficking.

Third, they are not able to achieve self-reliant sustainable economic development.

Their foreign policy is usually to seek external assistance from Taiwan to Venezuela, dependent on foreign aid, lobbying for special trade arrangements and pleading for debt cancellation.

They are pariah states because they default on their debt-servicing and sell economic citizenship to persons of dubious reputation, providing safe haven to questionable off-shore financial institutions active in drug production and transshipment. In addition, like in many other countries, there is corruption, tax evasion and human trafficking.

Now, some of our small Caribbean countries are doing further reputational damage by defaulting on servicing their debt. The list of defaulting states includes Belize and Grenada, who have made a fundamental error in strategy by following Greece.

They failed to appreciate that Greece could default because they, given the need for viability of the Euro and the political unity of the European Union (EU), matter to the EU.

When a small Caribbean state defaults it does not matter to anyone, it does not threaten any financial institution and the markets cannot afford to be merciful because it sets a precedent that perennial bad debtors would seek to emulate.

When a small Caribbean state defaults it gives up the already limited leverage which is the threat of default, thereby weakening its bargaining position. To default is to give up any possibility of bargaining with creditors. After the default, creditors let these small states sweat, then the financial institutions and consultants charge exorbitant fees to arrange a restructuring of the debt which, when accomplished, involves a new higher interest rate and a long repayment schedule and maybe a small write-down of the debt.

Meanwhile, the prime minister and the finance minister (if they are not one and the same person) and the financial secretary and governor of the central bank, are forced to do the diplomatic rounds in Washington, DC; New York; and London, making earnest, if not credible, pleadings of their inability to pay because of the global economic crisis.

They express their contriteness and willingness not to do this again if they get a fresh start. They pledge to accomplish what they have never done, which is to practise proper fiscal management and accept all technical advice from the International Monetary Fund.

Default is not a workable negotiating strategy for small states because the actuality of default affects no government, financial institution or financial market. Whereas all lending countries know they must beware of Greeks bearing debt, the only people affected by a default by Belize and Grenada are Belizians and Grenadians.