OVERCOMING STRUCTURAL BARRIERS TO GROWTH WITH EQUITY            IN SMALL DEVELOPING COUNTRIES LIKE BELIZE             An A...
2dissemination of information which was typically a by-product of expandingmarkets and innovation.      The colonization o...
3      Our understanding of why countries and economies grew is becausethey were able to attain basic thresholds in severa...
4minded prophet of self-interest. Smith did point out that the motivation formutually beneficial exchanges does not need m...
5income is distributed among workers.         Higher income workers usually getmost of what the nation produces as has bee...
6homeland were able to contribute significantly to the growth in agriculturalproduction for domestic food consumption.    ...
7      The historical record showed that economic growth was a powerfulforce for pulling poor people above the income pove...
8adequate social safety nets. His conclusion which is irrefutable is thatglobalization as it has been practiced is unfair ...
9      Paul Collier a Professor of Economics at Oxford University whose studywas focused on African economies, speaks of t...
10make the leap forward to development and others are not is the culturalendowments of its people, particularly the values...
11      Meanwhile right next door in little Belize a major land reformprogramme was initiated by the government of Premier...
12      Both   equity   and   sustainability   are    about   distributive   justice.Inequalities are especially unjust wh...
13     Research carried out by UN and other international agencies indicateno definitive causal effect between the 2008 fi...
14terms which exports from the African-Caribbean-Pacific (ACP) countriescould enter the European Community.     The Lomé C...
15     Again in the field of technology, there have been dramatic advances inmedicine, agriculture, energy, information an...
16      In Belize, the government has been responsible on average for a highshare of this investment since independence (a...
17The millions of dollars that will have to be paid as compensation is putting asevere strain on this government‟s ability...
18      The Report identified a lack of education and skills level as a majorfactor contributing to growing poverty and in...
19was able to reduce the fiscal deficit from about 8% of GDP in 2004 to lessthan 1% of GDP in 2008. The Government also su...
20International Monetary Fund (IMF) and debt restructuring, Jamaica‟s debt isstill about 130% of the GDP.      There is no...
21      But a most debilitating phenomenon is the rise in crime and violence. Iam ashamed to say that the once tranquil an...
22       The cost of crime and violence falls disproportionately on poor andmarginalized people. Fears of violent conflict...
238.    The Role of Civil Society      NGOs   are   no   panacea   to   income   inequality.   But   neither   aregovernme...
24      The successes of NGOs have been well documented and includeseveral Nobel Prize winners such as Muhammad Yunus whos...
25also involved in “charity” work with the homeless, soup-kitchens and thelike.        In the eyes of the international NG...
26delivery of basic services not only ensure that development projects aremore sustainable but also improve the chances of...
27iii)   Private sector investment, local and foreign, is crucial. I believe       strongly in promoting self-sufficiency ...
28as   knowledge-based    industries    such     as    off-shore   medicalschools, and language Training Centres. Our geog...
29      technology and greater market access is critical to a successful      growth strategy.iv)   This economic growth m...
30Court Justice nearly a century ago, “is said to be the bestdisinfectant.”Again in the absence of effective campaign fina...
31v)   The most powerful weapon to breaking down this wall of     political, social and economic injustice and discriminat...
32      It is no coincidence in my view that less than half our children do      not even complete a secondary school educ...
33       It is this growing culture of cynicism, dependence and lack of       responsibility   that   must   change   lest...
34        A major factor in addressing persistent poverty is the provision        of universal primary health care service...
35      implementation        capability.   In   this   regard,   bilateral   and      international cooperation programme...
36      In the final analysis I believe that it is not only in our enlightened self-interest but as citizens living in a c...
37Constitution wherein we the people affirmed that the nation of Belize shallbe founded upon principles which acknowledge…...
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Overcoming Structural Barriers to Growth and Equity

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Overcoming Structural Barriers to Growth and Equity

  1. 1. 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 20121. The Challenges to Growth Many of us were taught at school that during the Middle Ages therewas little or no economic improvement over some eight centuries. Thencame the Industrial Revolution when incomes consistently advanced at arate that was extraordinary by any former historical standard. We were thentold to draw the conclusion that technological advance was the origin ofeconomic growth and that it was in fact the central if not the sole cause ofthe industrial revolution. Since then some economists have argued that inventions in and ofthemselves are not the sole or even leading source of prosperity.Technological innovation is necessary to growth but it is as much aconsequence of economic opportunities as it is their cause. As the argumentgoes, it is the growth of markets through trade, colonization and domesticexpansion that is the predominant factor in Western economic development.The growth of markets was closely associated with the rapid flow and
  2. 2. 2dissemination of information which was typically a by-product of expandingmarkets and innovation. The colonization of African, Caribbean, Latin American and Pacificterritories by Western powers provided significant sources of cheap rawmaterials and basic commodities for the growing markets and factories inthe metropolitan centres of Europe. The mass extermination of indigenouspeople and the inhumanity and abomination of the slave trade thataccompanied imperialism and colonialism stand out as dark clouds in theevolutionary landscape of capitalism which re-appear ever so often inmodern times whenever man‟s inhumanity to man rears its ugly head. The poetic writings of Eduardo Galeano in his book: “Open Veins ofLatin America”, the seminal work of Dr. Eric Williams a former Prime Ministerof Trinidad and Tobago in his book: “From Columbus to Castro” and thepenetrating analysis of “How Europe Underdeveloped Africa” by the lateGuyanese Professor Walter Rodney provide powerful insights into this sordidperiod of history. But the expansion of markets through trade and colonization with thespread of information, were not sufficient factors for sustainable growth anddevelopment.
  3. 3. 3 Our understanding of why countries and economies grew is becausethey were able to attain basic thresholds in several key areas. These includedemocratic governance, order, peace and political stability; literacy,educational attainment and health of the population; the distribution ofincome-making assets, the availability of financial capital; the developmentof legal institutions; the vitality of entrepreneurialism. Most of these key areas are necessary conditions for sustainablegrowth but no one of them is sufficient in itself. The abundance of naturalresources is certainly a blessing but as history shows it can also be a curse.An equally important factor is the human instinct to improve one‟s materialwell-being. It has been said that the first human material motivation is toacquire adequate food and shelter. The second seems to be security. Thethird is apparently power and pleasure including recreation and otheraspects of enjoyment. The fourth is all the complex issues of status andidentity. The instinct to improve oneself materially is necessary for growth. Itis at the fountain of the enterprising spirit which drives private enterprise.But as Amartya Sen a Nobel Prize winner in Economics reminds us in hisbook “Development as Freedom” it is important to dispute the commondescription of Adam Smith – the father of modern economics – as the single-
  4. 4. 4minded prophet of self-interest. Smith did point out that the motivation formutually beneficial exchanges does not need more than what he called “self-love”. But he also noted that in dealing with other economic issues like therules to be followed for generating productive efficiency, the virtues of“prudence, humanity, generosity and public spirit are the qualities mostuseful.” The profit motive leads far too easily to individualism, selfishnessand greed. Furthermore one‟s basic motivation for self-improvement hasoften 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 withoutmentioning the rate of growth of the gross domestic product (GDP) of thenation. But G.D.P. by no means provides all the information about how welloff we are. When the GDP grows faster so do incomes on average generally.It does not however measure the nation‟s total wealth – its assets, such asland, housing and stocks – as opposed to the annual volume of goods andservices made and provided. It does not account for the degradation of theenvironment when a hurricane devastates the coast line of a smallCaribbean nation and destroys its physical infrastructure and the poorlyconstructed homes of low income citizens. In fact reported G.D.P. usuallyincreases because more money is spent to rebuild damage high-enddwellings and hotels. And G.D.P. does not tell us how the nation‟s total
  5. 5. 5income is distributed among workers. Higher income workers usually getmost of what the nation produces as has been the case since the late 1970s. The recent Occupy Wall Street Protest movement demonstrates awidespread dissatisfaction with the growing economic inequality in our worldtoday. This is not simply one of the divide between the rich and the poorcountries but also inequality among individuals and groups within societiesboth 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 ofproductivity or the output per hour of work of all workers. And it is only theportion of growth due to gains in productivity that is available to raise thenation‟s living standard. Without productivity gains, any growth in GDP isexactly 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 to20 percent represent refugees and economic migrants, who sought refuge inBelize fleeing the civil conflicts and social unrest in the eighties fromneighbouring El Salvador and Guatemala and other parts of Central Americathis question of productivity is critical. Most of these migrants were poorpeasant families (the well to do ones were able to make their way to NorthAmerica). There is no doubt that these migrants once settled in their new
  6. 6. 6homeland were able to contribute significantly to the growth in agriculturalproduction for domestic food consumption. However their presence alsocreated serious additional burdens on the social infrastructure costs of thenation (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 andeconomically displaced persons in our region from the days of the Caste Warin Mexico in the middle of the 19th century to today‟s economic migrantsfrom Central America. We have always prided ourselves for living in atranquil 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 ofsolidarity and determination to rid the world of poverty. In the year 2000,the United Nations Millennium Declaration, adopted by the largest evergathering of heads of state and government, committed countries – rich andpoor – to doing all they can to eradicate poverty, promote human dignityand equality and achieve peace, democracy and environmentalsustainability.
  7. 7. 7 The historical record showed that economic growth was a powerfulforce for pulling poor people above the income poverty line, but that suchgains did not automatically happen. Furthermore, these gains can bedissipated if income inequality widens and poor people do not shareadequately in growth – a phenomenon observed in many countries in recentyears. Over the past two decades income inequality worsened in 33 of 66developing countries according to a UNDP report. Joseph Stiglitz the Nobel Laureate for Economics 2002 has writtenchallenging the received wisdom that there is a systematic relationshipbetween globalization and growth and between growth and povertyreduction. He debunked what he called “long discredited trickledowneconomics which hold that a rising tide lifts all boats.” The policy issues, he contends, are not whether “to globalize or not toglobalize” 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 capitalflows increases economic growth. Rather there is considerable evidence andthought that it increases economic instability and that economic instabilitycontributes to insecurity and poverty. And even if growth increased slightly,the form of it might increase poverty especially in countries without
  8. 8. 8adequate social safety nets. His conclusion which is irrefutable is thatglobalization as it has been practiced is unfair and its benefits havedisproportionately gone to rich corporations and the wealthy elite. Thedebate should be on how globalization can be shaped (including the rules ofthe game) to better promote growth and reduce poverty in the developingworld. As Jeffrey Sachs tells us: “The defining challenge of the 21st centurywill be to face the reality that humanity shares a common fate on a crowdedplanet”.4. A Rising Tide does not lift all Boats We in the small developing countries are beginning to understand thatour own citizens share a common fate requiring the active role ofgovernment to ensure that every citizen has a chance and means toparticipate productively within the society and to curb society‟s dangerousencroachment on the physical environment. The market economy operatesin most if not all our countries but market forces left to themselves, the so-called laissez-faire capitalism now fashionably called neo-liberalism, will notdeliver sustained and equitable economic growth without the guiding hand ofoverarching principles of social justice and environmental stewardship.
  9. 9. 9 Paul Collier a Professor of Economics at Oxford University whose studywas focused on African economies, speaks of the Bottom Billion. A group ofabout 50 failing states caught in various poverty traps whose problems defytraditional approaches to alleviating poverty. These poverty traps includecivil war and corrupt governance. Even in countries that may be rich innatural resources like oil, this blessing often becomes a resource curseresulting in deepening poverty and inequality. Cost of living skyrockets.The government indulges in wasteful spending. The politics of patronage,cronyism and nepotism soon shatters the growth and development of thenation. What we can discern from all these studies is that poverty and growinginequality is an outcome of more than economic policies. It is an outcome ofa failure of political will and capacity to address the human development of apeople through policies that promote economic growth with equity. It is anoutcome of the inability or powerlessness of a people to take charge of theirown lives, to demand and to pursue the social programmes and actions thatpromote opportunity and enhance their security. There is also the crucial and complex role that culture plays in thisprocess. 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. 10. 10make the leap forward to development and others are not is the culturalendowments 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 andnew technology. The beliefs and practices that are part of local culture canno doubt be a source of sustainable development. But too often customarypractices and discrimination on the basis of gender, ethnicity, race, religion,social status or class are the root sources of pervasive inequality in manycountries. We have seen from history how racism in the United States and manycountries in Latin America have led to deeply divided and unequal societies.The extreme poverty of the indigenous Maya and Ketchi people the majorityof the population in the Central American nation of Guatemala can only beexplained by decades of repression and social marginalization. Under alatifundista system where most of the arable land was owned and controlledby the wealthy and powerful, the vast majority of the people were left to ekeout a living as subsistence peasant farmers in poor rural communitieslacking even basic health and education facilities, potable water system orelectricity.
  11. 11. 11 Meanwhile right next door in little Belize a major land reformprogramme was initiated by the government of Premier George Price whichtransformed the country and greatly reduced the inequality between ruralcommunities and urban residents.5. The Human Development Approach In 1990 a new approach was introduced to assess the development ofnations by putting the condition of people and their quality of life at centrestage. UNDP Reports began measuring human development by nationalincome (GDP) but also by life expectancy and literacy. This new approachwas inspired by the creative passion of Muhbub Ul Haq and the groundbreaking work of Amartya Sen, a Pakistani and Indian economistrespectively. The central contention of the human development approach isthat well-being is about much more than money. It is about the possibilitiesthat people have to fulfill the life plans they have, reason to choose andpursue. The human development approach emphasizes empowerment,equality and sustainability in expanding people‟s choices; people‟s freedomsand capabilities to lead lives that they value and have reason to value. Weare talking here about the freedoms to live long, healthy and creative livesto advance other goals and to find fulfillment in doing so.
  12. 12. 12 Both equity and sustainability are about distributive justice.Inequalities are especially unjust when they systematically disadvantagespecific groups of people, whether because of gender, ethnicity or birthplaceor when the gap is so great that acute poverty is high. The currentgeneration destroying the environment for future generations is no differentfrom a present day group‟s suppressing the aspirations of other groups forequal opportunities to jobs, health or education. Most people today live longer, are more educated and have moreaccess to goods and services than ever before. But income inequality hasdeteriorated in many countries and regions. Over the last decade or so several Latin American countries havebucked this trend – Argentina, Brazil, Mexico and Peru. Others in theCaribbean and Central America have experienced growing inequality evenwith a level of economic growth. Some trace Latin America‟s performance tothe shrinking earnings gap between high and low-skilled workers and to theincrease in targeted social transfer payments.
  13. 13. 13 Research carried out by UN and other international agencies indicateno definitive causal effect between the 2008 financial crisis and the growinginequality. 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, areconsidered Medium Human Development nations. Several – Barbados,Costa Rica, the Bahamas, Cuba, Panama, Trinidad & Tobago are classified asHigh 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 wasachieved only 30 years ago on 21st September 1981. Belize began life as anindependent country ranked 22nd in terms of GDP per head among thecountries of the Caribbean indicating the long distance Belize needed totravel. Independence did entitle Belize to certain preferential TradeAgreements namely the Caribbean Basin Initiative (CBI) in 1984 that gaveus duty-free entry to the US on certain exports such as citrus. Thispreferential treatment virtually disappeared with the coming of NAFTAbetween the US, Mexico and Canada. The Lomé Convention defined the
  14. 14. 14terms which exports from the African-Caribbean-Pacific (ACP) countriescould enter the European Community. The Lomé Convention has since gone through several changes – theCotinou Agreement and now the Economic Partnership Agreement (EPA).These trading arrangements are important to small developing countrieswho all need to become competitive in the products they export anddiversify into others. The fact remains that trade policies in the richindustrialized countries remain highly discriminatory against the products ofthe poor, especially the agriculture based, small developing countries.Protection in most rich countries remains extremely high through a variety ofinstruments. Most rich countries apply higher tariffs to agricultural goods and simplemanufactures – the very goods that small developing countries produce andcan 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 largesubsidies to their domestic food producers. Belize‟s and the Caribbean‟sagricultural exports of sugar, citrus, bananas, rice, sea-food (fish, lobster,shrimp) are directly affected by such unequal terms and arrangements inglobal trade regime.
  15. 15. 15 Again in the field of technology, there have been dramatic advances inmedicine, agriculture, energy, information and communications technologyoffering huge opportunities to put the power of technology to work fordevelopment by raising productivity. Many rich countries however, despitetheir commitment in the Trade-Related Aspects of Intellectual PropertyRights (TRIPS), have taken no real steps to share their technology. In its entire post-independence period, the Belizean economymeasured by GDP at constant prices grew at nearly five percent per year.Most of this growth, however, is explained by the increase in population, sothat the growth of GDP per head has been a more modest 2.2 percent still arespectable performance and one that compares favourably over the sameperiod (1980-2010) both with Central America (0.8 percent) and theCaribbean as a whole (1.7 percent). A recent study done by Victor Bulmer Thomas and Barbara BulmerThomas: “The Economic History of Belize” (from the 17th Century to PostIndependence) shows that the fluctuations in the growth of the Belizeaneconomy since independence have several causes, the most volatile hasbeen investment both private and public.
  16. 16. 16 In Belize, the government has been responsible on average for a highshare of this investment since independence (around 40%). Since highpublic investment in boom years is normally financed by borrowing fromabroad it has led to a problem of external indebtedness with the centralgovernment 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 the80‟s, tourism and services. In 2006 oil was discovered (in modest quantities5,000 barrels a day). Recently however the private investment climate hasbeen jolted by the government‟s takeover of the main telecommunicationsprovider (BTL) and the national electricity company (BEL). Taking over theseprivate companies in the name of nationalizing Belizean public utilitiesoffered 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 inthe hearts and minds of the populace. The long term costs to the country may however be harder tocalculate. For there is no doubt that the “nationalization” has put a veryserious damper on the already dismal level of foreign investment in Belize.
  17. 17. 17The millions of dollars that will have to be paid as compensation is putting asevere strain on this government‟s ability to service its debt obligations. Thesocial sector (health services, education) is facing further cuts. Publicofficers, 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 relativelypoor; 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 virtuallyabsent. Twenty years later, according to the 2002 Poverty Assessment Report,one-third of all Belizeans were defined as poor despite the fact that theeconomy had been growing in the previous years. The Poverty AssessmentReport in 2009 was even more shocking. The level of indigence (extremepoverty where the individual‟s income is insufficient even to buy theminimum food requirements) had increased to 16 percent and poverty as awhole had increased to 41.3 percent. The level of income inequality (the ginicoefficient) had also increased. In the Caribbean only Haiti and theDominican Republic had higher levels of poverty.
  18. 18. 18 The Report identified a lack of education and skills level as a majorfactor contributing to growing poverty and inequality. Nearly 90 percent ofheads of indigent households particularly in rural communities left schoolwith only a primary school education. Secondary school attendance rates inBelize are dismally low by international standards less than half of ourchildren complete a high school education. And for those who make it toSixth 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% andcloser to 40% for young people between the ages of 15 to 30. The depressed state of the economy and the dramatic fall in privatesector investment (local and foreign) with the resulting high unemploymentrate are no doubt significant factors leading to growing poverty andinequality. During the period 1998 to 2007 the country of Belize sustainedextensive damage and destruction to crops, infrastructure and housing stockfrom a series of hurricanes, tropical storms and flooding. These naturaldisasters and the costs of reconstruction put a severe strain on the financialresources of Belize resulting in a major fiscal deficit and a significantincrease in the foreign debt. Our government through a home-grownadjustment programme of increased taxes and cuts in capital expenditure
  19. 19. 19was able to reduce the fiscal deficit from about 8% of GDP in 2004 to lessthan 1% of GDP in 2008. The Government also successfully carried out adebt restructuring of virtually 100% of its commercial foreign debt whichprovides significant cash flow savings from reduction in interest rates and anextended moratorium on the payment of the principal debt. This tough austerity programme which the government carried out toreduce the deficit to less than 1 percent, though fiscally successful, took itstoll politically when our government was trounced and voted out in theelections of 2008. Deficit reduction was the right thing to do in order toensure that Belize can maintain economic sustainability but the pace ofimplementation may have been too rapid resulting in much hardshipespecially on the working poor and the middle-class. A recent study on the debt-burdened Jamaica‟s economy by the Centerfor Economic and Policy Research a Washington based think-tank describesthis Caribbean country as having the highest percentage of debt-servicinginterest payment to gross domestic product anywhere in the world. Foryears roughly half of the Jamaican government‟s budget has been dedicatedto paying the debt which has forced the country to scrimp on schools, healthservices and infrastructure. Despite several programmes with the
  20. 20. 20International Monetary Fund (IMF) and debt restructuring, Jamaica‟s debt isstill about 130% of the GDP. There is no doubt that one of the debilitating structural problems ofmost of the Caribbean economies is a high external public debt and the highinterest charged to service the debt. The high lending rates by Banksundermine investment and make the return on capital needed by new firmsparticularly the small and medium sized enterprises extremely challenging.The argument then that development will be propelled by a focus on theSMEs rings a little hollow without access to relatively inexpensive capital andappropriate technology for such small and medium-sized firms to investgrow and develop. The unsung hero in Belize as well as many other developing countriesis the Credit Union Movement. Credit Unions promote savings “for a rainyday” and provide loans to members for basic human needs as well as start-up capital for your entrepreneurs. Profits are shared with members throughthe payment of annual dividends. The Credit Union in Belize is called thepoor man‟s bank.
  21. 21. 21 But a most debilitating phenomenon is the rise in crime and violence. Iam ashamed to say that the once tranquil and quaint Belize City is todayconsidered one of the most violent cities of the world (in per capita terms)with 400 murders committed in the last four years. Drug trafficking, gangsand the proliferation of firearms provide a lethal cocktail of violence.Marijuana is the home-grown herbal drug of choice in the Caribbean andCentral America. But the region is also the transshipment area for the lethaland lucrative cocaine trade which moves by air, land and sea from SouthAmerica to the demand market of North America and Europe. The problemis compounded by the easy supply of guns from the United States whoseconstitution affords its citizens the right to freely purchase and bear arms.Today our neighbour to our immediate north – Mexico is terrorized by drug-gangs like the Zetas whose penchant for mass killings and horrific massacresof civilians has been described as the 21 century latest terrorism. There is agrowing awareness among regional leaders that the war on drugs isunwinnable and the call for decriminalization at least for marijuana hasbecome more pronounced. If human development is about expanding choice and advancing rightsthen 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. 22. 22 The cost of crime and violence falls disproportionately on poor andmarginalized people. Fears of violent conflict and random shootings disrupteveryday life and livelihoods. In addition to the direct loss of incomes andinvestments there are costs with a bearing on human development.Increased spending by the government on the security apparatus results inless spending on social investment in education and health, thusperpetuating growing poverty and income inequality. Women and childrenare especially vulnerable and are the main victims who bear the brunt of thehuman cost. Poor mothers ability to cover health costs, to keep theirchildren in school and maintain nutrition is diminished often times with fatalconsequences. Loss of opportunities for education is transmitted acrossgenerations in the form of illiteracy and reduced prospects for escaping thepoverty trap. To assist and prevent this inexorable descent into violence,deepening poverty and chaos, civil society and the population at large mustbe challenged to cooperate with law enforcement agencies to root outorganized crime. Such an initiative must be based on a new approach thatpromotes trust and confidence between the citizen and the police.
  23. 23. 238. The Role of Civil Society NGOs are no panacea to income inequality. But neither aregovernments, nor markets. We need them all to become more focused,more integrated, more ethically committed to a common purpose to create abetter world, of greater opportunities and less divisiveness; a world of equaljustice for all, where cultural differences based on ethnicity, gender orreligion are celebrated in freedom where the economic and social walls ofexclusion and marginalization will be torn down like the Berlin Wall. The Berlin Wall came down not because Mr. Reagan willed it so. Butbecause 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. Andthen there is this other profound notion: “No army can withstand the force ofan idea whose time has come”. It is an undoubted fact that no agency has played as constructive arole in the challenges of poverty, disease and the environment as the NGOsector. The sector includes a wide array of institutions; philanthropicfoundations and individuals, activist groups, professional associations,scientific organizations, religious groups, academia and many other grass-roots organizations.
  24. 24. 24 The successes of NGOs have been well documented and includeseveral Nobel Prize winners such as Muhammad Yunus whose institution –Grameen Bank transformed the development of micro-financing in thedeveloping world; or Doctors Without Borders who pioneered the delivery oflife-saving health care to some of the most impoverished regions of theWorld. Then there are the large Foundations now highlighted like the Bill andMelinda Gates and Warren Buffett foundations. These foundations arebacked by billions of dollars contributed by such wealthy people andcorporations who have rightly focused their work on the elimination ofextreme poverty and disease. Others like the Google team, Larry Page andSergey Brin focus on the transformative power of information technology. Local NGOs in our region who are dependent on grants from theinternational NGO community tend to concentrate on environmentalconcerns like pollution conservation of our forest, wild life and marineresources and the dangers of off-shore oil exploration. There are also NGOsinvolved with the important work of blindness prevention and treatment forthe visually impaired, other disabilities, HIV/AIDS awareness, cancertreatment, family planning, and domestic violence. Faith-based groups are
  25. 25. 25also involved in “charity” work with the homeless, soup-kitchens and thelike. In the eyes of the international NGO community, the Caribbean andCentral America, with the possible exception of poverty-stricken Haiti, weare not on the radar screen except perhaps when we suffer a terribledisaster like hurricane Mitch which wrecked havoc on Honduras in 1998resulting in the deaths of thousands with thousands left homeless anddestitute. Most of our countries are simply not considered poor enough. There is however hope in the growing awareness of the power of thepeople mobilized in grass-roots organizations to bring about change throughcollective action; expanding awareness for citizens to participate in decision-making through democratic structures. Communications technology makespossible linkages that were unimaginable just a few years ago. Socialnetworking tools such as the internet, Google and Facebook are becomingcrucial tools for cross-cultural contacts and group mobilization. The information revolution has empowered civil society to serve as apressure on both governments and corporations to be more accountable andtransparent and to function with new forms of governance and lesscorruption. Political reform and good governance matched with improved
  26. 26. 26delivery of basic services not only ensure that development projects aremore sustainable but also improve the chances of the poor and thevulnerable 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 people‟s 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 country‟s historical, political and institutional conditions.
  27. 27. 27iii) 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 nature‟s 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 wood- carving industries. Also to be pursued are: financial services, call-centres, sports, cultural and entertainment industries as well
  28. 28. 28as knowledge-based industries such as off-shore medicalschools, and language Training Centres. Our geographic locationmust be utilized for its strategic trade value with exportsprocessing zones and free zones for the entre-pot trade betweenNorth and South America.Where there is an abundance of water, rivers must be harnessedto produce hydro-electric power as we have successfully done inBelize. Pursuing alternative sources of energy in anenvironmentally sound way including solar energy, can be verycost effective for long-term economic growth and sustainability.Today although domestic oil production is still relatively small, itis the single largest export earner and government revenuegenerator for Belize. This unexpected bonanza should betargeted to uplift the standard of living especially for themarginalized.A meaningful social partnership between the state, the privatesector, labour and civil society is imperative. Foreign directinvestment (F.D.I.) that attracts fresh capital, the transfer of
  29. 29. 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. 30. 30Court Justice nearly a century ago, “is said to be the bestdisinfectant.”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 electedofficials to file an annual declaration of income, assets andliabilities, must be strictly enforced. The posts of the AuditorGeneral and the Director of Public Prosecutions must be filledlike the Judiciary by persons of the highest integrity, free frompolitical interference.The public service in many of our countries work in difficult,uncertain and under-resourced circumstances. Ministers andother high officials are too often vested with excessivediscretionary power, a situation which provides a breedingground for corruption, abuse, patronage, nepotism and politicalvictimization. The poor, the weak and suspected supporters ofthe opposition are the main victims in such a political culture ofnot so much “what you know” but “who you know”.
  31. 31. 31v) 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. 32. 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 one‟s actions and the choices we make in life is no longer considered important to character formation.
  33. 33. 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. 34. 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 government‟s service delivery capacity and the nation‟s development project
  35. 35. 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 plants–an 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. 36. 36 In the final analysis I believe that it is not only in our enlightened self-interest but as citizens living in a community to find the maximum outlet forour creative energies and human potential, to understand the plight of thepoor, the dispossessed, the young people without hope and to share in theresponsibility of reshaping our world by doing all that we can to end theexploitation of one human being by another. Our common humanitydemands this of us. The urgent demand of our generation is to reduce thewidening gap in income inequality and to break down the barriers to growthwith equity in our economic, social and political life. For us in the small developing countries, whose forebears endured thebrutality and oppression of slavery and colonialism, who were inspired bythe Gandhian struggle of non-violence to defeat imperialism, its policies ofdivide and rule and to confront the legacy of racism in our march to freedomand independence, it is now incumbent on our generation to strive and toovercome the challenge of poverty in the midst of plenty. Ending extreme poverty and inequality is the moral imperative and thegreat opportunity of our time. It is an undertaking that will relieve greatsuffering and spread economic well-being, thus expanding the reach ofhuman freedom. It will be a fulfillment of the sacred promise in our nation‟s
  37. 37. 37Constitution wherein we the people affirmed that the nation of Belize shallbe founded upon principles which acknowledge…“the dignity of the humanperson and the equal and inalienable rights with which all members of thehuman family are endowed by their creator.”

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