Belize’s Failure: U.S. Proxy or Corrupt Leadership?

By: Hubert Pipersburgh on September 29, 2011

As a peripheral economy it is difficult for countries such as Belize. The U.S. cast a huge shadow. Few leaders in the region have been able to plot an autonomous course.  The late Michael Manley of Jamaica with his non-aligned movement during the cold war tried, Belize was a member of that group under the Premiership of George Cadle Price. With the exception of Cuba, Grenada under the Late Maurice Bishop and his New Jewel Movement attempted a course that did not rely on the U.S. patronage he was promptly assassinated in cold blood by CIA backed factions after the invasion of the island by U.S. marines under the pretense of rescuing U.S. citizens.

Ronald Reagan was president at the time he was an ultra conservative right wing zealot who made no secret of his disgust for left leaning progressive regimes the so called Regan Doctrine.  He was effectively able to blunt the Sandinistas progress in Nicaragua by illegally funding a U.S. backed group called the Contras. This group operated out of Honduras. Honduras entered into a devil’s pact with Washington, agreeing to open its territory to the Contras and U.S. troops in exchange for U.S. military and economic aid.  The right wing government in El Salvador was in the midst of fighting an insurgency movement the FMLN.  Encouraged by Washington they were also used to destabilize the Sandinista revolution of Daniel Ortega.  Guatemala at that time was also cracking down on her indigenous population as well namely the Mayas.

This militarization of Central America caused it to become an armed camp. They had more guns than food for their people.  Meanwhile, U.S. hegemony in the region was relentless. Reagan dismantled the Caribbean Basin Initiative (CBI). The new policy was to deal with individual governments directly as oppose to part of a consortium.  This policy shift signaled that the U.S. would isolate any country whose policies do not coincide with U.S’s national economic security interests.

As the decades of the 80‘s and 90‘s passed to present day.  Caesar Chavez in Venezuela is one of the few regimes along with Brazil’s De Silva who have essentially chartered an independent economic path.  In Mr. Chavez’s case, he is determine to challenge U.S. hegemony in the region.  He defiantly nationalize the oil industry and other major sectors of the Venezuelan economy despite the hue and cry of the oligarchy and business elite.  He effectively reversed the neo-liberal economic policies adopted by his predecessors.  He has empowered the urban and rural poor that were effectively sidelined with those failed conservative policies of the past.  His Petro-Caribe initiative is a direct affront to Washington’s national interests.

This brings me to Belize. Under pressure from foreign donors such as the IMF and World Bank. Belize embarked on neo-liberal economic policies of development with the election of Mr. Esquivel’s regime in 1984.  Mr. Barrow was his foreign Minister. This neo-liberalism principle of economic development is based on a conservative business oriented philosophy of development that is entirely market based and concerned only with the bottom line. Mr. Esquivel’s economic policy emphasized a dominant, unfettered private sector. A high light being 100 percent foreign ownership of an enterprise was permitted.  There was also a noticeable growing U.S. influence in the form of Peace Corps and U.S. embassy personnel. His regime had made it quite clear according to Mr. Esquivel that it was gleefully, unabashedly pro-American and pro-western.  In 2008, Mr. Barrow’s regime inherited a wreaked national economy left in place by Mr. Musa’s regime. Mr. Musa’s economic policy was directed by Mr. Fonseca a minister who was most often accused of dishonesty and corruption.  Earlier in his tenure Mr. Musa had resisted a group of party militants so called G7, who had called for the ouster of Mr. Fonseca from his government. As a result, Mr. Barrow have been successfully able to argue that many of the policies left in place were not all his fault one way or another they were pursued by Mr. Musa’s regime as well especially those related to foreign investment.

As a consequence, of those previous regimes commitment to conservative free market economics there is a huge marginalization of the population in particular the working poor. The bottom line character of the neo-liberal economic policies favored by Washington left large sectors of the population out of the economic growth equation while promoting the interest of the business elite and foreign donors. Thus, much of the population was written off as a marginal underclass with little role in the economy. Although the export-oriented agricultural and tourism sectors did benefit from these policies the domestic economy and the welfare of the poor majority suffered.  Tourism in particular because of the international linkage involve that is, the money comes in, but it goes back out to the foreign investors is not the preferred vehicle for sustainable economic development.  Without needed structural reforms to that industry we will continue to be a nation of tray-holders.   Similarly, the rush to privatization and the slash of the public sector BEL, BTL, The Port Facilities, WASA, and the Belize International Airport as examples may have resulted in some temporary financial stability, but it also cut essential services and left Belize’s economy in a state of disrepair.  These parties( PUP, UDP) do not risk defying their main sponsors so they continue to whole- heartily embraced these neo-liberalism principle of economic development.

Consider these empirical data: Belize’s debt to GDP ratio is over 100 percent.  Chief among the reasons why that is important is because it is an indicator of a country’s ability to meet its civic responsibilities owed to the people.  For example, let say you have a GDP to debt ratio of say 50%. It means that for every dollar earned your treasury only have 50 cents to spend towards essential services owed to the people. Hence at over 100% for every dollar earned nothing is left to spend on essential services such as schools, hospitals, street and construction repair, roads, bridges, affordable housing, and public safety.

Additionally, during Mr. Musa’s two terms, the GDP to debt ratio had risen as high as 127%.  However, during his second five year term, he instituted a policy of austerity as demanded by the IMF and World Bank and handed over 76% GDP to debt ratio to Mr. Barrow after the election. By European Union standards, no country should have a debt to GDP ratio of more than 3% as an indication of good governance.  That may sound well on paper, however, that ratio is virtually impossible for peripheral economies to reach or maintain.  Not even Germany the best of the European lot economically can maintain that.  The world economic downturn certainly did not help it only added insult to injury because hence the cliche “when the U.S. sneezes these peripheral economies catches pneumonia.“

Thus, as all of these regimes have been prone to do in the past decades, Mr. Barrow has attempted to offset this deficit in GDP growth with more foreign loans and increase taxes.  In short, balance the budget on the backs of the average Belizean.  Even in Economics 101 we learned that this practice is untenable because it does not offer long-term development and sustainable economic growth.   Belize now faces double digit unemployment, a stagnant economy, rising cost of living, and decreasing wages.  Blame can be apportioned accordingly. It is problematic for the PUP who is now in the opposition to argue otherwise, when its economic policies were substantially not very different from those pursued by the UDP. However, this is the legacy of the disastrous neo-liberal conservative economic policies that Mr. Barrow so enthusiastically embraced in the past. Now we see him trying to undo some of those failed conservative economics policies with the passage of amendment 9.

During much of the last several decades as the deterioration of the social and economic fabric of the society unraveled, Mr. Barrow has been in the decision making smoke filled back rooms enjoying a front row seat to Belize’s rapid decent of potentially becoming a failed state in the 21st century.  Mr. Barrow has been front and center in all this. It is no surprise then that he is now trying to undo the failed conservative policies of the past. The economic policies adopted in the 80’s and 90’s should be re-evaluated as the adverse consequences of many of these conservative policies have become evident.  His policy of amending Belize’s constitution in an attempt to bring under government control major utilities is not in the least bit surprising. Although, I have major issues with the constitution of Belize I do not support amending it. I advocate eradicating the whole document and drafting a new one that closely represents our struggle as a people. In principle what he is doing is an admission that these neo-liberalism policies that he once championed has failed in Belize. I do not have any trepidation or ambivalence regarding the nationalization of these assets. I must confess that I am intrigued by this apparent policy divergence.  This democratic socialist approach has many questioning his motives and rightly so. After all, his record indicates a staunch capitalist throughout his political career. I see no evidence to the contrary. From foreign minister, to party leader, and now to Prime Minister Mr. Barrow has always been far right on the political spectrum.  Dictator he is not! He has not suspended the constitution. He is not making laws by decree. He is still working within the confines of the two party Westminster model.

Moreover, he has a history of supporting policies in the region that coincides with the U.S economic security interest. He has never communicated a core economic philosophy that diverts from capitalism. In short, he has always advocated policies that are pro U.S., and pro west.  He is not in the progressive mold of Castro, Bishop, Manley or Chavez.   Nor does he share their ideology.  For those reasons alone the dictator moniker will not stick.

For me, the question is how do we regulate companies considered too big to fail? My concern is the corruption of the public good. Mr. Barrow has yet to articulate how this conversion from private to public will benefit the average Belizean. In addition, he has been vague as to how he will go about restructuring the hierarchy of those assets to ensure effectiveness, efficiency and economic vitality. To date he has not formulate a clear coherent policy. Is this just scripted politics? Does he really want to govern and organize major sectors of Belize’s economy? Or is this all about making a political statement and not necessarily a better Belize?

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