Analyst says time to “Know Your Budget”
The 2012/2013 budget will be debated shortly. News Five has spoken to an analyst who has delved into the details of the budget book. In the series presented by the analyst called “Know Your Budget”, the expert says that there is key emphasis that Belize’s economy is export driven. This means we depend largely on inflows from abroad to generate jobs, income and government revenue. Two of these sources of inflows are export of goods and services and foreign direct investment. Looking at foreign direct investment from 2005 to 2011; in 2007, foreign direct investment was eleven point one percent of G.D.P. From then it trended on a downward spiral to eight point zero percent in 2009, six point eight percent in 2010, to a significant decrease of five point zero percent in 2011. For 2012, it is projected by Standard and Poors to be at four percent of G.D.P. This shows that within a period of four years, foreign direct investment has dropped by seven point one percent, a significant shortfall in adding to government revenues as economic performance is very much dependent on the size of inflows, in this case, foreign direct investment.
A second factor to look at in measuring the overall level of economic performance is employment. In the public sector alone, wages and salaries have increased from two hundred and seventy-three point seven million dollars in 2009/2010 to two hundred and seventy-nine million in 2010/2011, three hundred point four million in 2011/2012 and the draft estimates budgeted for fiscal year 2012/2013 is two hundred and ninety-four point seven million. Now, greater teacher and other public sector wage demands are likely to put pressure on current expenditure in the 2012/2013 budget. Within the overall labor market, the picture gets more serious. With low economic activity, low foreign direct investment will have a stronger impact on the employment level. This will seriously affect the young demographic, as fifty-six percent of the population is younger than twenty-five years of age.
In 2010, unemployment, according to the national population census, was close to twenty-three percent. Unemployment rates are higher for workers between the ages of fifteen to twenty-four at twenty-eight percent while for older workers it is at twenty percent. Within the budget for fiscal year for 2012/2013, while there are relatively small unsustainable pro-poor programs aimed at alleviating the poverty rate of forty-seven percent of the population; there are no new direct sustainable programs or policies to address the high unemployment rate. Not being able to educate these youths and maintain sufficient economic growth to stay ahead of the population curve is a critical policy challenge as there will be insufficient opportunities or avenues to employ the largely young demographic.