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Jan 2, 2013

The Economic Indicators of 2013

In economic indicators tonight, we look at the Impact of Rising Electricity Rates on the Productive and Business Sectors.

The electricity sector promised significant reforms in recent years. These reforms were to bring about higher efficiency and productivity, lower and better services.  But that has not been the case.  The Public Utilities Commission has announced a significant increase on already high electricity rates.  The new year started with a spike in electricity rates of sixteen point eight-seven percent; an increase from forty-one point six cents to now forty-eight cents per kilowatt hour.  With an average inflation rate of close to two percent the hike will have a double negative effect on every Belizean consumer and will worsen inflation and the cost of living. A drastic effect will be felt primarily in the already struggling productive sector and will likely drag productivity into further decline. Ballooning expenditure has more than doubled rates. The government, however, is expected to rake in rising dividends and income taxes from profits while productivity will be hard hit. The negative repercussions and trickle-down effect will be felt from the productive to the business sectors to the small and medium enterprises and eventually passed on in higher prices to the ordinary consumer.

It is noted that rates were decreased to forty-one point six cents just before the general elections but the new increase still puts it above where it stood last February before the decrease.  It is argued that the increase is to recover additional costs of power for 2012 and to cover expected costs for the first six months of this year. So why have costs risen so much under the government-run company? This analysis concludes that rather than cutting expenditure which would have a significant impact on prices and efficiency, the opposite is taking place. In sum, most will agree that the most important contributor to the reduction of poverty is improved productivity and growth; not higher prices.

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5 Responses for “The Economic Indicators of 2013”

  1. Storm says:

    Look around the world, and you will have a very hard time finding any government-run business that runs better in any way than a private one. GOB proves that universal law.

  2. Ricky Malthus says:

    In addition to what is written here, Belize other leading economic indicators like the savaging unemployment rate of 33%, the pittance paid out by Social Security for benefits, the assault and theft of Social Security funds by UDP, the inordinate low amount of consumer demand for goods and services over the past eighteen months, the flight and foreclosures of businesses while no new businesses are replacing them, the lack of money and its ensuing price effect in the economy, and the non productivity of government workers tied to staggering one billion dollars overhead not to mention the servicing of the external debts (Super Bond) and the internal debts; and yes we can’t forget the CORRUPTION factor as well as the CRIME factor. All these factors combined will indicate a negative composite index of our economy which will cause at least a 20 year lag{ time series analysis} for the economy to rebound in a robust manner, ceteris paribus. Happy New Year.

  3. Rod says:

    This is a thieving pm and gov. The more they thief the more the poor people suffer but I must say that the people of this country deserve what they get because they keep taking this crap from this pm and gov. You need to wake up and get rid of this thieving pm and gov. Beforeyou or one of your family members are the next one to be murdered kick out this useless corrupt pm and gov.

  4. Bear says:

    Happy New Year, indeed, Malthus.

    Now I’ve got a big headache, because you’re right on every point.

    I just read a very good book called “Anatomy of a Bolshevik,” written by a former Soviet Union-trained engineer. It makes many strong points, mostly about American politics, but it also illustrates how big government means little business, and vice versa. In other words, get government out of the way of private people, and let them build the economy naturally, according to the laws of economics.

    When you add GOB corruption to GOB attempts to control the economy, well, that’s a sure formula for failure on a national scale.

    What’s worse than a Bolshevik? A corrupt Bolshevik.

  5. Liberty and Freedom says:

    Great comments thus far. Call it what you may, communism or fascism. They are both derived from the system of socialism with more government control. The PM cut rates by 6% before the election. Now we face a 16.8% increase. Will the Belizean people try to topple Dean and his corrupt administration. Not a chance and he knows it. Just control the dumb masses with free booze and little gifts of money. Yes, dumb masses; like sheep being led to slaughter. It has happened in America, why not here. Obama just hands out welfare checks. Nothing like a free lunch! It is not a free lunch – you sell your freedom. Just a different approach in Belize. Look around you – poverty is rampant. Crime is on the rise. Corruption is unprecedented. How do you control the masses – make them beholding to the government. Any scraps from the rich table of Barrow are thrown to the dogs in the yard. Perhaps some day the dogs will use the sharp teeth in their mouths and the master will become the scraps of food……….

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