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Editorial – Friday September 20th. 2019

September 21
14:33 2019

Independence means nothing if it cannot improve the lives of the people along with their standard of living. The better life is measured in terms of income, jobs, productivity and stability.

If the business sector of Belize only wants to buy and sell, that is economic activity, but it not productivity, and it cannot bring about prosperity for the nation, but only for the merchant community which profits from buy & sell.

If jobs are scarce and people cannot pay their rent or their taxes, or the school fees for their children, this is a sign of recession. It means that the economy has stalled.

The Cost of Living index is a measure of inflation. It is not a measure of economic activity and it does not take into account inevitable spending like for birthdays and anniversaries, illness or funeral expenses, and it does not factor in added costs such as home security.

The anniversary of Belize’s independence is a good time to reflect on where we are today in our quest for economic security and what should be the role of the government in providing more opportunities for all.

Belize suffers from a problem peculiar to small countries. Our customs external tariffs are structured high enough to support the needs of the government, but given Belize’s relatively small population, the tariffs are set too high to provide the right ingredients for a robust economy.

This provides a strong incentive for systemic cheating. Importers cheat by under-stating the value of their imports or by paying the correct duty on only a portion of what they import.

Those who do not cheat find that they can no longer compete with those who do. And since Belize is essentially a country of importers, this single anomaly is a cause for major disequilibrium in the system. Inevitably those with greater resources to import (and cheat) will have more success than those who don’t.

Any future government of Belize will have to find a solution to deal with this weakness in the structure. We need to have a lower tariff regimen but one with more supervision and stricter accountability.

Government should try to wean itself from its dependency on import duties as a first step to setting Belize on an elevated path to entrepreneurial success.

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