Prime Minister of Belize Dean Barrow presented his BDZ$1.3 billion (One Belize dollar=US$0.49 cents) “swan song” budget to Parliament as opposition legislators staged a walkout on Thursday after the debate on their motion of no confidence in his administration was deferred.
“Today, as everyone knows, is the final budget presentation of this Parliament, and my swan song as Minister of Finance. I consider the results for this year and the proposals for the next, to be persuasively positive, born of dexterous public sector management and collaboration amongst the various sectors of our society,” said Barrow, who has already announced that he was stepping down from active politics ahead of the general elections on November 1 this year.
The fiscal package comprises BDZ$1.291billion in Recurrent Expenditure “driven largely by increases in personal emoluments and salary related grants as provisions must be made for annual merit awards across the public service, in addition to the increase in pension costs.
Barrow said total Revenue and Grants is estimated at BDZ$1.239 billion for the new financial year, comprising BDZ $1.206 billion in Recurrent Revenue, BFZ$2.6 million in Capital Revenue and $30.8 million in Grants.
“For the new fiscal year, there is simply no way that we can realistically squeeze from our projections that two per cent of GDP, or what would be the equivalent of BDZ$70 million.”– Prime Minister of Belize Dean Barrow
He told legislators that the financing needs of the budget amounting to BDZ$232.1 million “will be comfortably satisfied’ from a number of sources, including the disbursement of BDZ$137.7 million from concessionary loans already contracted with multilateral development partners to fund the capital expenditure programme, as well as the disbursement of BDZ$20 million in budget support financing from the Republic of China under the on-going bilateral economic cooperation programme.
Barrow has also indicated that the fiscal package would be financed by sourcing BDZ$74.4 million in domestic financing.
Prime Minister Barrow told Parliament that although the rationale for the budget targets should be apparent from the detailed numbers he has presented, “there may be those, particularly our external audience, for whom a more specific fiscal policy context is helpful.
“Indeed, in order to push down our debt to gross domestic product (GDP) ratio and to provide some cushion in the case of unforeseen and unforeseeable events, our gutsy target was to attain a two per cent primary surplus for these years and into the medium term.
Barrow said in the last fiscal year, the effort at maximising revenue collections and holding a firm line on recurrent items such as goods and services, resulted in a surplus that fell just about 0.6 of a per cent or BDZ$20 million below the target.
“For the new fiscal year, there is simply no way that we can realistically squeeze from our projections that two per cent of GDP, or what would be the equivalent of BDZ$70 million,” Barrow said, adding “our approach is neither to mislead our friends nor delude ourselves”.
“This budget…contains BDZ$461 million more for salaries, benefits, pensions and transfers, BDZ$152 million more for capital projects…”– Prime Minister of Belize Dean Barrow
He said the commitment is firstly to the public servants, to their increments, to pensioners, to the operational costs of proper public management and, critically, to the infrastructural campaign.
“And these simply cannot be paused or pruned. This commitment to sustained stimulus is especially urgent in view of the recent jolts to the economy, such as the drought and crop diseases, and now the worrying prospect of a coronavirus-induced recession.
“In any case, the revised GDP estimates of output that’s a fifth greater than currently calculated, will prod the possibility of additional efficiencies from the standpoint of revenues. Then on the growth side there is no room for doubt that massive potential will be unlocked by projects such as the Caracol, Coastal and Sarteneja Highways.”.
Barrow said that these and the multiple smaller public sector capital projects as well as the various private sector domestic and foreign financed ventures, will buttress medium term economic expansion.
“In the longer run, they will lavishly vindicate the near-term deviation from the previous, restrictive budget targets,” he said predicting that by financial year 2023 “our overall budget balance should be neutral and the primary balance, our technicians expect, could be in excess of 3.5 per cent of GDP”.
In a budget presentation that sounded more like a report on his stewardship, particularly over the last three terms in office, Barrow said that preliminary population estimates suggest that during his tenure, the number of “people served, directly or indirectly, by this budget has risen by a third.
“That is a net increase of almost 100,000 residents. The needs and expectations placed upon the budget by the citizenry at large including, and perhaps especially, the social partners, have never been higher. “This is so particularly in the core areas of education, medical care, national infrastructure and public security.”
He said that the new proposed budget strives energetically to support those purposes most deserving of Government’s attention, “those principles enshrined in our Constitution and our compact with the electorate..
“This budget…contains BDZ$461 million more for salaries, benefits, pensions and transfers, BDZ$152 million more for capital projects and, as a percentage of recurrent revenues, almost a third less for interest and principal payments on the public debt,” Barrow said.