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Belize private sector supports renegotiation
BELMOPAN—The Belize Chamber of Commerce and Industry (BCCI) says it supports the decision to renegotiate the “super bond” after the Dean Barrow government announced earlier this week that it was defaulting on the repayment of its external debt. A statement from the Office of Prime Minister Dean Barrow said that the next interest payment of US$46 million on Belize’s accumulated US$544 million foreign debt, referred to as the “super bond” is due on August 20.
The payment would have been the country’s first under the interest payment plan on the US dollar Step Up Bonds due in 2029. The government said that the reason for the non-payment is that the stepped up payments represent almost one half of the country’s total public indebtedness under the new stepped up 8.5 per cent rate.
The main opposition Peoples United Party (PUP), which said it was neither consulted nor informed of the government’s decision, has called on Prime Minister Barrow to address the nation on the implications of his administration’s decision to default on the external debt payment.
In a statement, the BCCI said that it believes that, without exception, “debts must be paid and that we must be financially responsible citizens. “However, where the economic viability of our country is at stake, the terms of repayment should not be so onerous as to strangle or deter the country’s economic growth. It is in this vein that the BCCI, in principle, supports the renegotiation of the bond with the goal of making debt repayment more manageable.”
The BCCI said that the debt burden must be restructured so that it is sustainable in the long term “thereby enabling Belize to honour its financial obligations without further damage to the economy. “The BCCI urges the Government to use any fiscal relief achieved through a renegotiated bond to introduce programmes to stimulate and promote economic growth and investment.
“Further, the BCCI urges the government to take appropriate measures to trim its own expenditure so that it can introduce balanced budgets and avoid the recurrence of an unsustainable debt burden,” the private sector group said. Belize is currently trying to renegotiate its foreign debts with creditors and has offered them a three pronged payment plan, which involves an extension of the payment period on the super bond well beyond the 2029 maturity date.
Manager of Belize Business Bureau, Hipolito Bautista, said that there are penalties for defaulting and the country may now have to look at the Washington-based International Monetary Fund (IMF) for assistance. He said the creditors “could seize all our assets...all our foreign exchange assets and that will take away from us the foreign exchange we need to keep this economy going and so it seems quite likely that the government will have to go to the IMF, which he described as a “serious customer” that is hated in some parts of the world “because they play no games”.
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