World Bank Reviews Belize’s Public Spending

Today, the World Bank shared its findings of a review on Belize’s public spending, primarily in areas of education, health and climate change resilience. The bank is of the view that Belize could reduce its debt to below fifty percent of G.D.P. by undertaking reforms in these areas particularly. The report also found that budget credibility and fiscal discipline remain a challenge and a high public sector wage bill continues to limit spending power. News Five’s Marion Ali has a report on the review.

 

Marion Ali, Reporting

For the first time, the World Bank has presented the findings of a review that it has conducted on Belize’s public spending and how the government could improve its ability in addressing specific areas of need if it were more efficient in how it manages the public purse. Senior Economist with the World Bank, Anton Dobronogov, broke down the figures.

 

Anton Dobronogov, Senior Economist, World Bank

“As of 2023, the risks to sustainability of public debt  were judged as moderate. which is a major achievement for the country which experienced multiple debt restructurings in the past. Revenue collection in Belize remains lower than in most of the Caribbean countries. Since this report was on the expenditures and not on revenues, we did not go in we did not do in depth analysis. But I would like to highlight this point because Belize still needs to continue fiscal consolidation and increasing revenues needs certainly to be a part of this effort. As you can see at the next slide total expenditures which was at 23 percent in 2022, has an even larger gap between Belize and the Caribbean average. Obviously, this is a consequence of the fiscal consolidation and for a while this gap, is likely to persist.”

 

The World Bank found that one of the main challenges for Belize in public spending is its huge wage bill, which in 2022 accounted for 41 percent of total public spending.

 

Anton Dobronogov

“The public expenditures in Belize are rather rigid. About 81 percent of expenditures are non discretionary. In part, this is a consequence of the lack of fiscal disciplines, of lack of fiscal discipline, which persisted for a fairly prolonged period in the country. And the most important rigid expenditure in Belize is the public sector wage bill. As of 2022, the wage bill including transfers to public high school and public hospitals allocated for salaries accounted for slightly over 40 percent of total public spending, 50 percent of total revenue, and 55 percent of recurrent expenditure.”

 

Minister of State in Finance, Chris Coye says there has to be a way to effectively address the issues that were raised.

 

Chris Coye, Minister of State, Finance

“I think you, you look at the recommendations, and those are recommendations that, that have to be seriously considered. Certainly, the size of the workforce is, one. But also the, compensation, the pay scale is compressed. The skill side is underpaid versus the broadness of the lower-mid or mid-level workers within the system. Those are areas that we actually have to spend a lot more time in looking at how do we develop probably a new pay scale structure, a new compensation structure. So that is quite a bit of work, but that is something that needs to be undertaken.”

 

The review singled out areas of education and health that have also given serious challenges to the government over the years. The bank’s Country Director for the Caribbean, Lilia Burunciuc spoke on these.

 

 Lilia Burunciuc, Country Director for the Caribbean, World Bank

“A key recommendation is the need to improve the efficiency and effectiveness of public spending in key sectors such as health and education. And these are the two and these are the two very important sectors for the country. for the people of, the country. We will learn more about this today, but I would like to highlight that in education, worldwide, study after study, has shown that the factor number one that determines the results in terms of the learning outcomes in education is the quality of teachers. And this is one of very important  area that Belize needs to really pay attention to, to improve the quality of teachers and, teaching. In health, it is important to make sure that the money, that public money that goes into this sector really delivers the results, and the citizens can see the benefits in terms of improved services that they get from, the health sector, improving the efficiency and effectiveness of spending in health.”

 

C.E.O. in the Ministry of Education, Dian Maheia, pointed out that the ministry has already begun to correct some of the weaknesses that existed in previous years.

 

 

 

 

 

Dian Maheia, C.E.O., Ministry of Education

“There are a few things to take away here. One is that this is a review that really incorporates data leading mostly up to 2019.  There are significant changes that have been made since 2019, and there’s data that has yet to be collected. I think that yes. What happens from 2020 on especially from 2021 on because with 2021, we were fully back after the pandemic, I think is going to be interesting as we move forward. So that’s one thing, because this was a review, s I said, with data up to 2019. That’s one thing. Another thing to take away from this is the fact that They’re not a whole lot of surprises.  It’s true that we absolutely as a government, have to be aware of the fact that we spend a lot of our money on education and we should expect that our system would be more efficient.”

 

A lot of money is spent on teacher training C.E.O. Maheia said, but the fruits of that are still just beginning to have bearing. Marion Ali for News Five.