By Horace Palacio: Government has an essential role in Belize. But running utility companies is not one of them. History, economics, and global evidence all point to the same conclusion: when governments try to operate commercial utilities, efficiency drops, innovation slows, costs rise, and politics replaces performance. Belize has lived this reality long enough to recognize it.
The proper role of government is clear. Set the rules. Enforce fair competition. Protect consumers. Ensure universal access. Invest in public goods like security, justice, education, and infrastructure. What government is not built to do is compete in fast moving, capital intensive, technology driven industries like telecommunications, energy, or utilities.
Economists have studied this extensively. The World Bank, OECD, and IMF have repeatedly found that state owned enterprises in utilities tend to be less efficient, more indebted, and more vulnerable to political interference than privately run but well regulated firms. A World Bank review of utility reforms across developing countries found that state run utilities often suffer from overstaffing, underinvestment, and poor service quality, while consumers face higher long term costs due to inefficiency.
The reason is structural, not ideological. Governments do not face the same pressures as businesses. A private utility that performs poorly loses customers, market share, and eventually capital. A government run utility is protected from failure. Losses are absorbed by taxpayers. Poor decisions rarely carry consequences. Innovation becomes optional.
Belize’s experience reflects this pattern. When utilities become state controlled, decisions are often driven by politics instead of performance. Board appointments reflect loyalty rather than expertise. Pricing becomes a political tool instead of an economic one. Investment decisions prioritize control over competitiveness. The result is stagnation disguised as stability.
Look globally. Countries that improved utility performance did so by separating roles. Singapore’s government does not micromanage telecom companies. It regulates aggressively and enforces standards while allowing competition and private investment. New Zealand restructured its utilities by removing political control and focusing government on regulation and consumer protection. Even the European Union has spent decades breaking up state monopolies because competition lowered prices and improved service.
Data backs this up. OECD studies show that competitive telecom markets deliver lower prices, faster speeds, and higher innovation than monopoly or state dominated systems. The ITU consistently reports that countries with open telecom markets see faster broadband rollout and lower consumer costs. Competition works. Concentration does not.
This does not mean government has no role. Quite the opposite. Government’s role is more important when it is focused correctly.
Government should
- set clear licensing rules
- enforce competition laws
- prevent monopolies
- regulate pricing transparently
- ensure rural and vulnerable communities are served
- protect consumers from abuse
- maintain national security standards
That is where government adds value. Not by owning networks. Not by buying struggling companies. Not by crowding out private investment.
Utilities are not symbolic assets. They are systems that must evolve constantly. Technology moves too fast for political cycles. When governments run utilities, upgrades lag, global partnerships weaken, and innovation slows. Belize cannot afford that in a world where connectivity, energy reliability, and digital access determine economic survival.
The strongest economies learned this lesson. Government governs. Markets operate. Regulators enforce. When those lines blur, everyone pays. Consumers pay through higher prices and worse service. Taxpayers pay through hidden subsidies and lost opportunity. The country pays through stagnation.
Belize does not need a bigger government footprint in utilities. It needs a smarter government footprint. One that focuses on rules, fairness, and long term national interest while letting competition and innovation do the rest.
Running utility companies is not strength. Knowing when not to is.
The views expressed in this article are those of the author, Horace Palacio, and do not necessarily reflect the views or editorial stance of Breaking Belize News.
The post Government is not built to run utility companies appeared first on Belize News and Opinion on www.breakingbelizenews.com.
By Horace Palacio: Government has an essential role in Belize. But running utility companies is not one of them. History, economics, and global evidence all point to the same conclusion: when governments try to operate commercial utilities, efficiency drops, innovation slows, costs rise, and politics replaces performance. Belize has lived this reality long enough to
The post Government is not built to run utility companies appeared first on Belize News and Opinion on www.breakingbelizenews.com.