Over 130 teachers have gone months without receiving salaries, forcing many into financial distress, the Belize National Teachers Union (BNTU) revealed during a press conference on October 7th.
BNTU President Nadia Caliz outlined the severity of the issue, stating that teachers have not been paid for up to six months due to their names being manually removed from the payment system. Caliz described the situation as an attack on both the teachers and the union, with several teachers at risk of losing their homes, facing utility disconnections, and struggling to support their families. According to Caliz, these removals are in direct violation of an agreement reached in July with Minister of Education Francis Fonseca, which guaranteed that no licensed teacher would be removed from the system.
One teacher recounted how, despite securing her teaching license after months of bureaucratic hurdles, she has not been paid since May. She explained that her savings have been depleted, and her classroom remains under-resourced due to the lack of financial support. The BNTU also noted that the situation has caused significant emotional strain, with some teachers experiencing breakdowns due to the uncertainty surrounding their pay.
While the issue of non-payment remains the most urgent, it is rooted in broader administrative challenges tied to the teaching profession. Licensing and Continuing Professional Development (CPD) requirements have become another source of frustration for educators. Teachers must accumulate 120 CPD hours to renew their licenses; however, many have faced difficulties with the Teaching and Learning Institute (TLI) system, which has failed to accurately record completed CPD hours. This has left teachers unable $10 million loan aimed at promoting digital innovation among micro, small, and medium-sized enterprises (MSMEs). As the Federal Reserve lowers its benchmark interest rate, SOFR tends to follow, which may lead to reduced interest payments on future loans Belize secures from the IDB.
In recent weeks, the Federal Reserve cut its interest rates by 50 basis points, with Chair Jerome Powell suggesting that further cuts totaling another 50 basis points could be in store by year-end, depending on economic performance. Powell noted the U.S. economy is poised for a slowdown in inflation, creating the opportunity to ease monetary policy. This policy shift is designed to address inflation concerns and sustain economic activity, providing relief to borrowers linked to rates like SOFR.
SOFR, which closely tracks the Federal Reserve’s rate, has reflected these changes. Recent data shows that SOFR stood at 5.35% at the beginning of September but has gradually declined following the rate cut. By September 30, SOFR had dropped to 4.96% and further adjustments could occur as the Fed's actions continue to ripple through the financial system.
Belize has previously benefitted from loans tied to SOFR, and with the IDB continuing to use this benchmark, future loans for development projects, like infrastructure or economic growth initiatives, may become less expensive. The IDB’s $10 million loan to Belize in November 2022, with a 25-year term and a rate based on SOFR, highlights the direct impact these rate changes could have on the country's economic development.
Fed Chair Jerome Powell emphasized that the pace of cuts will depend on economic indicators, stating, "The risks are two-sided, and we will continue to make our decisions meeting by meeting." Analysts are interpreting this as a sign that, while inflation is cooling, the Fed remains cautious about how quickly to lower rates, leaving room for flexibility depending on future data.
For Belize, a country that has historically relied on international loans to fund critical projects, the trajectory of SOFR and the Federal Reserve’s policy decisions are crucial. Lower SOFR rates mean lower interest on loans, ultimately reducing the cost of financing projects aimed at boosting the local economy.
The downward trend in SOFR rates, seen as a result of the Fed’s September rate cut, provides an optimistic outlook for countries like Belize that have linked their financing to this benchmark. This shift may help ease the financial burden on the country’s budget, making it easier to manage debt while investing in key development areas.
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