What macroeconomic policy prescriptions/strategies would you recommend for Belize in an effort to foster economic growth and development? One characteristic that developing countries’ economies share is vulnerability. Belize is small in size, prone to natural disasters and environmental fragility. Belize also has an open economy with a high trade-GDP ratio, but its export base is very narrow, dominated by primary products (bananas, sugar, citrus, etc.) and natural resources. Therefore, the Belizean economy is subject to external disturbances from world goods and financial markets. As a result, the economy experience significant volatility in their economic growth. To enhance the volatility and external shocks the Belize government have introduced various macroeconomic policies to influence aggregate income, total employment (unemployment), economic growth (increase per capita GDP), wages, prices, interest rate and social development (poverty reduction). A macroeconomic policy does not only take into consideration finance but also social development. According to the World Commission on Environment and Development, sustainable development encompasses the assurance that changes “meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland (1987, p.8). In this regard, from past experience in the Belizean context, it is known that the government has implemented at least three macroeconomic policies, namely: Fiscal Policies, Monetary Policies and Supply-Side Policies. In its purest form, Fiscal Policies refer to discretionary change in government expenditure and/or taxes in order to achieve certain economic goals. In Belize, for example, the government has been committed in spending more in education and health so that the future generation can enjoy a higher standard of living and as a result stimulate economic activity. Fiscal policies, however, tend to also have a negative effect on the...
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