OVERCOMING STRUCTURAL BARRIERS TO GROWTH WITH EQUITY IN SMALL DEVELOPING COUNTRIES LIKE BELIZE An Address by the Rt. Hon.

Said Musa at the Institute for Cultural Diplomacy, Berlin, Germany June 20th 2012

1.

The Challenges to Growth Many of us were taught at school that during the Middle Ages there

was little or no economic improvement over some eight centuries.

Then

came the Industrial Revolution when incomes consistently advanced at a rate that was extraordinary by any former historical standard. We were then told to draw the conclusion that technological advance was the origin of economic growth and that it was in fact the central if not the sole cause of the industrial revolution.

Since then some economists have argued that inventions in and of themselves are not the sole or even leading source of prosperity. Technological innovation is necessary to growth but it is as much a consequence of economic opportunities as it is their cause. As the argument goes, it is the growth of markets through trade, colonization and domestic expansion that is the predominant factor in Western economic development. The growth of markets was closely associated with the rapid flow and

2 dissemination of information which was typically a by-product of expanding markets and innovation.

The colonization of African, Caribbean, Latin American and Pacific territories by Western powers provided significant sources of cheap raw materials and basic commodities for the growing markets and factories in the metropolitan centres of Europe. The mass extermination of indigenous people and the inhumanity and abomination of the slave trade that accompanied imperialism and colonialism stand out as dark clouds in the evolutionary landscape of capitalism which re-appear ever so often in modern times whenever mans inhumanity to man rears its ugly head.

The poetic writings of Eduardo Galeano in his book: Open Veins of Latin America, the seminal work of Dr. Eric Williams a former Prime Minister of Trinidad and Tobago in his book: From Columbus to Castro and the penetrating analysis of How Europe Underdeveloped Africa by the late Guyanese Professor Walter Rodney provide powerful insights into this sordid period of history.

But the expansion of markets through trade and colonization with the spread of information, were not sufficient factors for sustainable growth and development.

3 Our understanding of why countries and economies grew is because they were able to attain basic thresholds in several key areas. These include democratic governance, order, peace and political stability; literacy,

educational attainment and health of the population; the distribution of income-making assets, the availability of financial capital; the development of legal institutions; the vitality of entrepreneurialism.

Most of these key areas are necessary conditions for sustainable growth but no one of them is sufficient in itself. The abundance of natural resources is certainly a blessing but as history shows it can also be a curse. An equally important factor is the human instinct to improve ones material well-being. It has been said that the first human material motivation is to acquire adequate food and shelter. The second seems to be security. The third is apparently power and pleasure including recreation and other aspects of enjoyment. identity. The fourth is all the complex issues of status and

The instinct to improve oneself materially is necessary for growth. It is at the fountain of the enterprising spirit which drives private enterprise. But as Amartya Sen a Nobel Prize winner in Economics reminds us in his book Development as Freedom it is important to dispute the common description of Adam Smith the father of modern economics as the single-

4 minded prophet of self-interest. Smith did point out that the motivation for mutually beneficial exchanges does not need more than what he called selflove. But he also noted that in dealing with other economic issues like the rules to be followed for generating productive efficiency, the virtues of prudence, humanity, generosity and public spirit are the qualities most useful. The profit motive leads far too easily to individualism, selfishness and greed. Furthermore ones basic motivation for self-improvement has

often been undermined by despair, humiliation, poverty and tyranny.

2.

Growth in GDP is not Enough No budget speech by a Minister of Finance is ever complete without

mentioning the rate of growth of the gross domestic product (GDP) of the nation. But G.D.P. by no means provides all the information about how well off we are. When the GDP grows faster so do incomes on average generally. It does not however measure the nations total wealth its assets, such as land, housing and stocks as opposed to the annual volume of goods and services made and provided. It does not account for the degradation of the environment when a hurricane devastates the coast line of a small Caribbean nation and destroys its physical infrastructure and the poorly constructed homes of low income citizens. In fact reported G.D.P. usually increases because more money is spent to rebuild damage high-end dwellings and hotels. And G.D.P. does not tell us how the nations total

5 income is distributed among workers. Higher income workers usually get

most of what the nation produces as has been the case since the late 1970s.

The recent Occupy Wall Street Protest movement demonstrates a widespread dissatisfaction with the growing economic inequality in our world today. This is not simply one of the divide between the rich and the poor countries but also inequality among individuals and groups within societies both rich and poor.

There are two general indicators of beneficial growth for an economy. The first is the growth of the workforce. The second is the growth of productivity or the output per hour of work of all workers. And it is only the

portion of growth due to gains in productivity that is available to raise the nations living standard. Without productivity gains, any growth in GDP is exactly offset by population growth and the average income stays the same. For a small nation like Belize with a population of just 350,000 where 15 to 20 percent represent refugees and economic migrants, who sought refuge in Belize fleeing the civil conflicts and social unrest in the eighties from neighbouring El Salvador and Guatemala and other parts of Central America this question of productivity is critical. Most of these migrants were poor

peasant families (the well to do ones were able to make their way to North America). There is no doubt that these migrants once settled in their new

6 homeland were able to contribute significantly to the growth in agricultural production for domestic food consumption. However their presence also

created serious additional burdens on the social infrastructure costs of the nation (the need for new schools, health clinics, potable water systems, electricity and land surveys, transportation and communication).

Historically, Belize has always been a place of refuge for persecuted and economically displaced persons in our region from the days of the Caste War in Mexico in the middle of the 19th century to todays economic migrants from Central America. We have always prided ourselves for living in a

tranquil haven of democracy. But that too comes with serious challenges.

3.

The Challenges to growth and shared prosperity The 21st Century opened with an unprecedented declaration of

solidarity and determination to rid the world of poverty. In the year 2000, the United Nations Millennium Declaration, adopted by the largest ever gathering of heads of state and government, committed countries rich and poor to doing all they can to eradicate poverty, promote human dignity and equality and achieve peace, democracy and environmental

sustainability.

7 The historical record showed that economic growth was a powerful force for pulling poor people above the income poverty line, but that such gains did not automatically happen. Furthermore, these gains can be dissipated if income inequality widens and poor people do not share adequately in growth a phenomenon observed in many countries in recent years. Over the past two decades income inequality worsened in 33 of 66 developing countries according to a UNDP report.

Joseph Stiglitz the Nobel Laureate for Economics 2002 has written challenging the received wisdom that there is a systematic relationship between globalization and growth and between growth and poverty reduction. He debunked what he called long discredited trickledown

economics which hold that a rising tide lifts all boats.

The policy issues, he contends, are not whether to globalize or not to globalize or to grow or not to grow. In some cases it is not even to

liberalize or not to liberalize. Neither theory nor evidence, he says, supports the view that opening markets to short term speculative capital flows increases economic growth. Rather there is considerable evidence and thought that it increases economic instability and that economic instability contributes to insecurity and poverty. And even if growth increased slightly, the form of it might increase poverty especially in countries without

8 adequate social safety nets. His conclusion which is irrefutable is that globalization as it has been practiced is unfair and its benefits have disproportionately gone to rich corporations and the wealthy elite. The debate should be on how globalization can be shaped (including the rules of the game) to better promote growth and reduce poverty in the developing world.

As Jeffrey Sachs tells us: The defining challenge of the 21st century will be to face the reality that humanity shares a common fate on a crowded planet.

4.

A Rising Tide does not lift all Boats We in the small developing countries are beginning to understand that

our own citizens share a common fate requiring the active role of government to ensure that every citizen has a chance and means to participate productively within the society and to curb societys dangerous encroachment on the physical environment. The market economy operates in most if not all our countries but market forces left to themselves, the socalled laissez-faire capitalism now fashionably called neo-liberalism, will not deliver sustained and equitable economic growth without the guiding hand of overarching principles of social justice and environmental stewardship.

9 Paul Collier a Professor of Economics at Oxford University whose study was focused on African economies, speaks of the Bottom Billion. A group of about 50 failing states caught in various poverty traps whose problems defy traditional approaches to alleviating poverty. These poverty traps include

civil war and corrupt governance. Even in countries that may be rich in natural resources like oil, this blessing often becomes a resource curse resulting in deepening poverty and inequality. The government indulges in wasteful spending. Cost of living skyrockets. The politics of patronage,

cronyism and nepotism soon shatters the growth and development of the nation.

What we can discern from all these studies is that poverty and growing inequality is an outcome of more than economic policies. It is an outcome of a failure of political will and capacity to address the human development of a people through policies that promote economic growth with equity. It is an outcome of the inability or powerlessness of a people to take charge of their own lives, to demand and to pursue the social programmes and actions that promote opportunity and enhance their security.

There is also the crucial and complex role that culture plays in this process. David Landis in his book The Wealth and Poverty of Nations contends that the key factor in explaining why some countries are able to

10 make the leap forward to development and others are not is the cultural endowments of its people, particularly the values of hard work, thrift, honesty and tenacity as well as the degree to which it is open to change and new technology. The beliefs and practices that are part of local culture can no doubt be a source of sustainable development. But too often customary practices and discrimination on the basis of gender, ethnicity, race, religion, social status or class are the root sources of pervasive inequality in many countries.

We have seen from history how racism in the United States and many countries in Latin America have led to deeply divided and unequal societies. The extreme poverty of the indigenous Maya and Ketchi people the majority of the population in the Central American nation of Guatemala can only be explained by decades of repression and social marginalization. Under a latifundista system where most of the arable land was owned and controlled by the wealthy and powerful, the vast majority of the people were left to eke out a living as subsistence peasant farmers in poor rural communities lacking even basic health and education facilities, potable water system or electricity.

11 Meanwhile right next door in little Belize a major land reform programme was initiated by the government of Premier George Price which transformed the country and greatly reduced the inequality between rural communities and urban residents.

5.

The Human Development Approach In 1990 a new approach was introduced to assess the development of

nations by putting the condition of people and their quality of life at centre stage. UNDP Reports began measuring human development by national income (GDP) but also by life expectancy and literacy. This new approach was inspired by the creative passion of Muhbub Ul Haq and the ground breaking work of Amartya Sen, a Pakistani and Indian economist

respectively. The central contention of the human development approach is that well-being is about much more than money. It is about the possibilities that people have to fulfill the life plans they have, reason to choose and pursue.

The

human

development

approach

emphasizes

empowerment,

equality and sustainability in expanding peoples choices; peoples freedoms and capabilities to lead lives that they value and have reason to value. We are talking here about the freedoms to live long, healthy and creative lives to advance other goals and to find fulfillment in doing so.

12

Both

equity

and

sustainability

are

about

distributive

justice.

Inequalities are especially unjust when they systematically disadvantage specific groups of people, whether because of gender, ethnicity or birthplace or when the gap is so great that acute poverty is high. The current generation destroying the environment for future generations is no different from a present day groups suppressing the aspirations of other groups for equal opportunities to jobs, health or education.

Most people today live longer, are more educated and have more access to goods and services than ever before. But income inequality has deteriorated in many countries and regions.

Over the last decade or so several Latin American countries have bucked this trend Argentina, Brazil, Mexico and Peru. Others in the

Caribbean and Central America have experienced growing inequality even with a level of economic growth. Some trace Latin Americas performance to the shrinking earnings gap between high and low-skilled workers and to the increase in targeted social transfer payments.

13 Research carried out by UN and other international agencies indicate no definitive causal effect between the 2008 financial crisis and the growing inequality. A lot depends on the policy responses to a recession.

6.

The case of small developing countries: Belize, the Caribbean and Central America Most of the countries in this region with the exception of Haiti, are

considered Medium Human Development nations.

Several Barbados,

Costa Rica, the Bahamas, Cuba, Panama, Trinidad & Tobago are classified as High Human Development (UNDP Human Development Report 2011). Yet, in most if not all these developing countries there is persistent poverty, deep-seated pockets of extreme poverty and gross income inequality.

Belize is a young nation. Political independence from Britain was achieved only 30 years ago on 21st September 1981. Belize began life as an independent country ranked 22nd in terms of GDP per head among the countries of the Caribbean indicating the long distance Belize needed to travel. Independence did entitle Belize to certain preferential Trade

Agreements namely the Caribbean Basin Initiative (CBI) in 1984 that gave us duty-free entry to the US on certain exports such as citrus. This preferential treatment virtually disappeared with the coming of NAFTA between the US, Mexico and Canada. The Lom Convention defined the

14 terms which exports from the African-Caribbean-Pacific (ACP) countries could enter the European Community.

The Lom Convention has since gone through several changes the Cotinou Agreement and now the Economic Partnership Agreement (EPA). These trading arrangements are important to small developing countries who all need to become competitive in the products they export and diversify into others. The fact remains that trade policies in the rich

industrialized countries remain highly discriminatory against the products of the poor, especially the agriculture based, small developing countries. Protection in most rich countries remains extremely high through a variety of instruments.

Most rich countries apply higher tariffs to agricultural goods and simple manufactures the very goods that small developing countries produce and can export. Import quotas are a more extreme version of the same policy. Another way rich countries tilt the playing field for trade is by paying large subsidies to their domestic food producers. Belizes and the Caribbeans

agricultural exports of sugar, citrus, bananas, rice, sea-food (fish, lobster, shrimp) are directly affected by such unequal terms and arrangements in global trade regime.

15 Again in the field of technology, there have been dramatic advances in medicine, agriculture, energy, information and communications technology offering huge opportunities to put the power of technology to work for development by raising productivity. Many rich countries however, despite their commitment in the Trade-Related Aspects of Intellectual Property Rights (TRIPS), have taken no real steps to share their technology.

In

its

entire

post-independence

period,

the

Belizean

economy

measured by GDP at constant prices grew at nearly five percent per year. Most of this growth, however, is explained by the increase in population, so that the growth of GDP per head has been a more modest 2.2 percent still a respectable performance and one that compares favourably over the same period (1980-2010) both with Central America (0.8 percent) and the Caribbean as a whole (1.7 percent).

A recent study done by Victor Bulmer Thomas and Barbara Bulmer Thomas: The Economic History of Belize (from the 17th Century to Post Independence) shows that the fluctuations in the growth of the Belizean economy since independence have several causes, the most volatile has been investment both private and public.

16 In Belize, the government has been responsible on average for a high share of this investment since independence (around 40%). Since high public investment in boom years is normally financed by borrowing from abroad it has led to a problem of external indebtedness with the central government struggling to service the debt in slump years.

Historically the main driver of the Belizean economy has been forestry (logwood and mahogany exports), then agricultural exports and since the 80s, tourism and services. In 2006 oil was discovered (in modest quantities 5,000 barrels a day). Recently however the private investment climate has been jolted by the governments takeover of the main telecommunications provider (BTL) and the national electricity company (BEL). Taking over these private companies in the name of nationalizing Belizean public utilities offered the government both immediate financial and political benefits: Financial, because the profits accrue to the revenue base of public finances, while the compensation due to the original foreign investors remains unpaid, tied up in litigation; Political benefits because of its nationalistic stirrings in the hearts and minds of the populace.

The long term costs to the country may however be harder to calculate. For there is no doubt that the nationalization has put a very serious damper on the already dismal level of foreign investment in Belize.

17 The millions of dollars that will have to be paid as compensation is putting a severe strain on this governments ability to service its debt obligations. The social sector (health services, education) is facing further cuts. Public officers, teachers, nurses and police have had their wages frozen.

7.

The Gap between the have and the have not At the time of independence, the people of Belize were all relatively

poor; there was a lack of extremes between the rich and the poor. Ostentatious wealth was not flaunted even by the few well-to-do merchants, landlords and business people. Conspicuous consumption was virtually absent.

Twenty years later, according to the 2002 Poverty Assessment Report, one-third of all Belizeans were defined as poor despite the fact that the economy had been growing in the previous years. The Poverty Assessment Report in 2009 was even more shocking. The level of indigence (extreme poverty where the individuals income is insufficient even to buy the minimum food requirements) had increased to 16 percent and poverty as a whole had increased to 41.3 percent. The level of income inequality (the gini coefficient) had also increased. In the Caribbean only Haiti and the Dominican Republic had higher levels of poverty.

18 The Report identified a lack of education and skills level as a major factor contributing to growing poverty and inequality. Nearly 90 percent of heads of indigent households particularly in rural communities left school with only a primary school education. Secondary school attendance rates in Belize are dismally low by international standards less than half of our children complete a high school education. And for those who make it to Sixth Form or to the fledgling National University, jobs are hard to come by. The job market is very depressed. The unemployment rate is over 23% and closer to 40% for young people between the ages of 15 to 30.

The depressed state of the economy and the dramatic fall in private sector investment (local and foreign) with the resulting high unemployment rate are no doubt significant factors leading to growing poverty and inequality.

During the period 1998 to 2007 the country of Belize sustained extensive damage and destruction to crops, infrastructure and housing stock from a series of hurricanes, tropical storms and flooding. These natural

disasters and the costs of reconstruction put a severe strain on the financial resources of Belize resulting in a major fiscal deficit and a significant increase in the foreign debt. Our government through a home-grown adjustment programme of increased taxes and cuts in capital expenditure

19 was able to reduce the fiscal deficit from about 8% of GDP in 2004 to less than 1% of GDP in 2008. The Government also successfully carried out a debt restructuring of virtually 100% of its commercial foreign debt which provides significant cash flow savings from reduction in interest rates and an extended moratorium on the payment of the principal debt.

This tough austerity programme which the government carried out to reduce the deficit to less than 1 percent, though fiscally successful, took its toll politically when our government was trounced and voted out in the elections of 2008. Deficit reduction was the right thing to do in order to ensure that Belize can maintain economic sustainability but the pace of implementation may have been too rapid resulting in much hardship especially on the working poor and the middle-class.

A recent study on the debt-burdened Jamaicas economy by the Center for Economic and Policy Research a Washington based think-tank describes this Caribbean country as having the highest percentage of debt-servicing interest payment to gross domestic product anywhere in the world. For years roughly half of the Jamaican governments budget has been dedicated to paying the debt which has forced the country to scrimp on schools, health services and infrastructure. Despite several programmes with the

20 International Monetary Fund (IMF) and debt restructuring, Jamaicas debt is still about 130% of the GDP.

There is no doubt that one of the debilitating structural problems of most of the Caribbean economies is a high external public debt and the high interest charged to service the debt. The high lending rates by Banks undermine investment and make the return on capital needed by new firms particularly the small and medium sized enterprises extremely challenging. The argument then that development will be propelled by a focus on the SMEs rings a little hollow without access to relatively inexpensive capital and appropriate technology for such small and medium-sized firms to invest grow and develop.

The unsung hero in Belize as well as many other developing countries is the Credit Union Movement. Credit Unions promote savings for a rainy day and provide loans to members for basic human needs as well as startup capital for your entrepreneurs. Profits are shared with members through the payment of annual dividends. poor mans bank. The Credit Union in Belize is called the

21 But a most debilitating phenomenon is the rise in crime and violence. I am ashamed to say that the once tranquil and quaint Belize City is today considered one of the most violent cities of the world (in per capita terms) with 400 murders committed in the last four years. Drug trafficking, gangs and the proliferation of firearms provide a lethal cocktail of violence. Marijuana is the home-grown herbal drug of choice in the Caribbean and Central America. But the region is also the transshipment area for the lethal and lucrative cocaine trade which moves by air, land and sea from South America to the demand market of North America and Europe. The problem is compounded by the easy supply of guns from the United States whose constitution affords its citizens the right to freely purchase and bear arms. Today our neighbour to our immediate north Mexico is terrorized by druggangs like the Zetas whose penchant for mass killings and horrific massacres of civilians has been described as the 21 century latest terrorism. There is a growing awareness among regional leaders that the war on drugs is unwinnable and the call for decriminalization at least for marijuana has become more pronounced.

If human development is about expanding choice and advancing rights then violent conflict is the most brutal suppression of human development. The right to life and to security are among the most basic human rights. Insecurity is both a cause and a consequence of mass poverty.

22

The cost of crime and violence falls disproportionately on poor and marginalized people. Fears of violent conflict and random shootings disrupt everyday life and livelihoods. In addition to the direct loss of incomes and investments there are costs with a bearing on human development. Increased spending by the government on the security apparatus results in less spending on social investment in education and health, thus

perpetuating growing poverty and income inequality. Women and children are especially vulnerable and are the main victims who bear the brunt of the human cost. Poor mothers ability to cover health costs, to keep their children in school and maintain nutrition is diminished often times with fatal consequences. Loss of opportunities for education is transmitted across generations in the form of illiteracy and reduced prospects for escaping the poverty trap. To assist and prevent this inexorable descent into violence,

deepening poverty and chaos, civil society and the population at large must be challenged to cooperate with law enforcement agencies to root out organized crime. Such an initiative must be based on a new approach that promotes trust and confidence between the citizen and the police.

23 8. The Role of Civil Society NGOs are no panacea to income inequality. But neither are

governments, nor markets. We need them all to become more focused, more integrated, more ethically committed to a common purpose to create a better world, of greater opportunities and less divisiveness; a world of equal justice for all, where cultural differences based on ethnicity, gender or religion are celebrated in freedom where the economic and social walls of exclusion and marginalization will be torn down like the Berlin Wall.

The Berlin Wall came down not because Mr. Reagan willed it so. But because people a freedom loving people hammered it down, brick by brick, rock by rock, stone by stone. We have a saying in our part of the world, Solo el pueblo salva el pueblo! Only the people can save the people. And then there is this other profound notion: No army can withstand the force of an idea whose time has come.

It is an undoubted fact that no agency has played as constructive a role in the challenges of poverty, disease and the environment as the NGO sector. The sector includes a wide array of institutions; philanthropic foundations and individuals, activist groups, professional associations, scientific organizations, religious groups, academia and many other grassroots organizations.

24 The successes of NGOs have been well documented and include several Nobel Prize winners such as Muhammad Yunus whose institution Grameen Bank transformed the development of micro-financing in the developing world; or Doctors Without Borders who pioneered the delivery of life-saving health care to some of the most impoverished regions of the World.

Then there are the large Foundations now highlighted like the Bill and Melinda Gates and Warren Buffett foundations. These foundations are backed by billions of dollars contributed by such wealthy people and corporations who have rightly focused their work on the elimination of extreme poverty and disease. Others like the Google team, Larry Page and Sergey Brin focus on the transformative power of information technology.

Local NGOs in our region who are dependent on grants from the international NGO community tend to concentrate on environmental

concerns like pollution conservation of our forest, wild life and marine resources and the dangers of off-shore oil exploration. There are also NGOs involved with the important work of blindness prevention and treatment for the visually impaired, other disabilities, HIV/AIDS awareness, cancer treatment, family planning, and domestic violence. Faith-based groups are

25 also involved in charity work with the homeless, soup-kitchens and the like.

In the eyes of the international NGO community, the Caribbean and Central America, with the possible exception of poverty-stricken Haiti, we are not on the radar screen except perhaps when we suffer a terrible disaster like hurricane Mitch which wrecked havoc on Honduras in 1998 resulting in the deaths of thousands with thousands left homeless and destitute. Most of our countries are simply not considered poor enough.

There is however hope in the growing awareness of the power of the people mobilized in grass-roots organizations to bring about change through collective action; expanding awareness for citizens to participate in decisionmaking through democratic structures. Communications technology makes possible linkages that were unimaginable just a few years ago. Social

networking tools such as the internet, Google and Facebook are becoming crucial tools for cross-cultural contacts and group mobilization.

The information revolution has empowered civil society to serve as a pressure on both governments and corporations to be more accountable and transparent and to function with new forms of governance and less corruption. Political reform and good governance matched with improved

26 delivery of basic services not only ensure that development projects are more sustainable but also improve the chances of the poor and the vulnerable to escape from the poverty trap.

SUMMING UP To sum up, I leave you with the following thoughts.

i)

Economic growth and wealth creation in the nation are important and necessary means to fight poverty and to provide a better quality of life for all the people. We in the underdeveloped countries need to get away from the old discourse of being for or against growth. What is crucial is the expansion of peoples real freedoms; rising income is important in facilitating the expansion of freedoms and choices.

ii)

There is no one model of development for all countries. Pathways to advancing human development are varied and specific to a countrys historical, political and institutional conditions.

27 iii) Private sector investment, local and foreign, is crucial. I believe strongly in promoting self-sufficiency in food production for the domestic market. Export led production in the agro-industry sector sugar, citrus, bananas, rice, beans, papayas, lobster, conch and livestock in which our small countries can compete regionally if not globally, not only generate employment and foreign exchange but also sustain livelihoods and economic growth. Aquaculture shrimp farms and tilapia fish farms, successfully managed is also a major foreign exchange earner.

In the services sector, the Tourist industry is a natural for our Caribbean countries, well endowed with natures beauty, pristine forest, wild life, marine resources, cave systems, coral reefs, archaeological sites and artifacts. As a job-creator and income generator, tourism offers tremendous opportunities for broad based development in both stay-over arrivals and cruise-ship tourism.

Income-generating assets must be sustainably managed and marketed such as forest products for the furniture and woodcarving industries. Also to be pursued are: financial services, call-centres, sports, cultural and entertainment industries as well

28 as knowledge-based industries such as off-shore medical

schools, and language Training Centres. Our geographic location must be utilized for its strategic trade value with exports processing zones and free zones for the entre-pot trade between North and South America.

Where there is an abundance of water, rivers must be harnessed to produce hydro-electric power as we have successfully done in Belize. Pursuing alternative sources of energy in an

environmentally sound way including solar energy, can be very cost effective for long-term economic growth and sustainability.

Today although domestic oil production is still relatively small, it is the single largest export earner and government revenue generator for Belize. This unexpected bonanza should be targeted to uplift the standard of living especially for the marginalized.

A meaningful social partnership between the state, the private sector, labour and civil society is imperative. Foreign direct investment (F.D.I.) that attracts fresh capital, the transfer of

29 technology and greater market access is critical to a successful growth strategy.

iv)

This economic growth may not however translate into equitable growth unless there is democratic governance that practices transparency and accountability by public officials and

institutions. The rule of law, open government, an independent Judiciary, respect for human rights and fundamental freedoms enshrined in the Supreme Law of the land the Constitution, must be upheld.

Most people in our region live in democratic societies. They have the chance to vote in periodic elections to choose their leaders. The formal processes of democracy have proliferated at national levels. But democracy does not guarantee freedom and justice to all citizens.

For example, freedom of the press and freedom of information may be proclaimed in the Constitution and in a Freedom of Information Act. But the government has been better at rhetoric than reality. Sun/light wrote Louis Brandeis, a US Supreme

30 Court Justice nearly a century ago, is said to be the best disinfectant.

Again in the absence of effective campaign finance regulations, free and fair elections can be subverted by massive vote-buying. The Integrity in Public Life Legislation requiring all elected officials to file an annual declaration of income, assets and liabilities, must be strictly enforced. The posts of the Auditor

General and the Director of Public Prosecutions must be filled like the Judiciary by persons of the highest integrity, free from political interference.

The public service in many of our countries work in difficult, uncertain and under-resourced circumstances. Ministers and other high officials are too often vested with excessive

discretionary power, a situation which provides a breeding ground for corruption, abuse, patronage, nepotism and political victimization. The poor, the weak and suspected supporters of the opposition are the main victims in such a political culture of not so much what you know but who you know.

31 v) The most powerful weapon to breaking down this wall of political, social and economic injustice and discrimination is education. Investment in education that provides universal access to quality and relevant education is the key to poverty elimination. An education that awakens the curiosity, the creativity of young inquiring minds, that equips them with a positive attitude and with skill and ability to function and contribute to the development of their community, is the most effective strategy for growth with equity.

We must take full advantage of the I.C.T. revolution in our classrooms. Implementing the one lap-top per student at the primary and secondary level is an investment we cannot afford not to make even if we have to do it in phases.

I find it very troubling that in my country Belize which in the past was considered comparatively high on the Human

Development Index, by 2010 Belize was down to 78 out of 194 countries (still a medium development country). One year later according to the UNDP Index we had fallen to 93.

32 It is no coincidence in my view that less than half our children do not even complete a secondary school education; and that the programme for universal primary health care initiated by the previous government has been severely cut back. It is absolutely imperative for Belize to get back on track on the pathway that will secure to our children, young women and men the fulfillment of their God-given talents and the means to participate

productively in society.

vi)

An

education

that

inspires

young

people

to

participate

productively in society must confront head-on the reality of the present generation that seems totally obsessed with the culture of materialism and instant gratification. It is a culture that negates the value of hard work and sacrifice today for a better tomorrow.

It sees nothing wrong in getting and having no shame in begging or stealing. Accepting responsibility for ones actions and the choices we make in life is no longer considered important to character formation.

33 It is this growing culture of cynicism, dependence and lack of responsibility that must change lest this quest for easy

contentment becomes the ultimate adversary of human freedom.

vii)

The mind is a terrible thing to waste. So too is the body and the spirit of a whole generation. A healthy population is essential for people to live long productive lives.

The growing gap between the rich and the poor is dangerous in countless ways. It is dangerous for the poor first whose lives are cut short from undernourishment, diseases, lack of safe drinking water, violence in their depressed, overcrowded homes and neighbourhoods. Without reliable and affordable access to basic health services, the poor who also happen to have the highest fertility rates and the most rapid population growth rates is a time-bomb ticking to explode. And even if my language here is somewhat of a hyperbole, the fact remains that a country, a world, where some live in comfort and plenty, while close to half the population lives in poverty and misery is neither just nor stable.

34 A major factor in addressing persistent poverty is the provision of universal primary health care services through a National Health Insurance (NHI) programme subsidized through the Social Security system to which all employers and employees contribute. The emphasis is on primary and preventive care and an aggressive public education campaign; early childhood

vaccinations, preventative measures against life-style diseases such as diabetes, hypertension and HIV/AIDS. As a Director of the Pan-American Health Organization once said: the health of the nation is the wealth of the nation.

viii)

Some problems are beyond the capacity of individual states, particularly small states, to deal with effectively. We need significant external resources to achieve critical levels of human development. To increase the productivity of small farmers, to improve basic infrastructure ports, farm roads, power and communication, broadband internet, to develop an industrial development policy that nurtures entrepreneurial activity and helps to diversify the economy away from dependence on primary commodity exports all such policy responses to structural constraints require a major overhaul of governments service delivery capacity and the nations development project

35 implementation capability. In this regard, bilateral and

international cooperation programmes are crucial.

ix)

In addition there are certain global issues such as migration, climate change and natural disaster relief which absolutely require the attention and financial support of the international community. In the case of Belize, the issue of migration is further compounded by the degradation of our forest and nature reserves carried out by daily illegal encroachments into our territory by poor Guatemalan peasants and those who hire them to cut down our timber resources and Xate plantsan ornamental plant, which grows in the jungle of Belize and which has high value in the European market. These illegal settlements and encroachments pose not only an environmental hazard but also a security threat because of the century-old Guatemalan claim to Belizean territory.

x)

The evidence of the devastating impacts on environmental sustainability is compounded by global climate change. And in the face of outrageous disparities in income and wealth our generation is called upon to meet this new challenge to human freedom and well being.

36

In the final analysis I believe that it is not only in our enlightened selfinterest but as citizens living in a community to find the maximum outlet for our creative energies and human potential, to understand the plight of the poor, the dispossessed, the young people without hope and to share in the responsibility of reshaping our world by doing all that we can to end the exploitation of one human being by another. Our common humanity demands this of us. The urgent demand of our generation is to reduce the widening gap in income inequality and to break down the barriers to growth with equity in our economic, social and political life.

For us in the small developing countries, whose forebears endured the brutality and oppression of slavery and colonialism, who were inspired by the Gandhian struggle of non-violence to defeat imperialism, its policies of divide and rule and to confront the legacy of racism in our march to freedom and independence, it is now incumbent on our generation to strive and to overcome the challenge of poverty in the midst of plenty.

Ending extreme poverty and inequality is the moral imperative and the great opportunity of our time. It is an undertaking that will relieve great suffering and spread economic well-being, thus expanding the reach of human freedom. It will be a fulfillment of the sacred promise in our nations

37 Constitution wherein we the people affirmed that the nation of Belize shall be founded upon principles which acknowledgethe dignity of the human person and the equal and inalienable rights with which all members of the human family are endowed by their creator.