GOB responds to Petrocaribe concerns

Monday, June 1st 2015. Aaron Humes Reporting: This morning KREM Wake Up Belize Morning Vibes hosts Mose Hyde and India Camiel discussed documents reported to be leaked from the Central Bank which suggested that the Government of Belize had spent $20 million of Petrocaribe funds on continuing salary and debt service commitments.

That’s not true – well, not quite, according to the Ministry of Finance, which responded via press release this afternoon. Suggesting that the position taken by KREM was out of “ignorance” and not malice, the Government chided the media house for not checking with them first.

According to the Government’s explanation, the two transfers of $20 million in March of 2014 and 2015 were in fact to meet salary and debt service comments, but it was not to make up a shortfall. The Government operating account also hosts funds to pay contractors for infrastructure work including those done on Petrocaribe-funded projects.

Dean Barrow

Since the Petrocaribe monies are not immediately available, Government spends on the projects in advance and then replaces the money when the Petrocaribe funds come through from that separate account. Drawdowns such as the $40 million previously described are only to replace what was spent from the account and specifically on Petrocaribe contracts. The replaced monies and anything else in the account are recurrent spending on Government’s operating expenses, including its largest which are salaries and debt servicing.

The Government maintains that it did not borrow specifically from Petrocaribe funds to meet salary and debt service commitments and it can show its documents to that effect. As all monies credited to the Government – including Petrocaribe funding – go through one Consolidated Revenue Fund, the replenished monies become part of that and are used on general Government spending, the Petrocaribe contractors having already been paid.

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