By BBN Staff: Belize’s national debt, now estimated to be somewhere around $2.6 billion, is always a hot topic of discussion. The national debt is projected to balloon to $3 billion by the end of 2017 and Belizeans should be concerned about how government intends to manage its debt obligations.
More than that, many sectors within the country are concerned about the current government’s inhibitions, or lack-thereof, as it relates to continued, unrelenting borrowing. Every country must borrow, especially small developing countries such as Belize; but with a growing national debt, it should be expected that existing as well as newly developing industries would be growing as a result, driving the country’s exports, however, that isn’t the case.
The economy, instead, is slowing down, as reported by the International Monetary Fund (IMF) and the World Bank. Neither of the last two governments have done especially good jobs of steering the country’s economy into the 21st century. Apart from tourism, the country relies mostly on exporting raw natural resources; industries which have all taken major hits over the last year.
And while the current government is always quick to place blame on the previous People’s United Party (PUP) government, which was fraught with corruption, for the country’s current economic standing, this government has been at the helm for the last eight years. Just recently, the United Democratic Party’s (UDP) newly elected First Deputy, in response to the IMF’s latest report, said: “There are some rough times that are coming and I’ll point out not because of our administration but these are things that are following us because of the legacy of the People’s United Party.”
One would imagine that at some point the government of the day, currently serving its third consecutive term, would take some responsibility for the current state of affairs, even if only just a smidge, but not so. It is never their fault. But how have they managed the country’s debt?
Prime Minister Dean Barrow did assemble a team led by Economic Advisor Mark Espat to renegotiate the terms of the $544 million “Superbond”, a move which was praised in international circles for its innovation. The Superbond, as you will remember, was the PUP’s greatest economic sin. The UDP used the term to demonize the PUP. It is one of many terms that still haunts the PUP, along with words like “Musa”, “Fonseca” and “Accommodation Agreement”.
So the Prime Minister must be credited for his quick action in this regard but he has made costly decision as well. His move to nationalize BTL, it was revealed this week, will cost the country a total upward of half a billion dollars.
His administration has also borrowed upward of $350 million from Venezuela under the PetroCaribe agreement.
According to figures from the Central Bank, external debt at the end of 2008, when the Barrow government took office, stood at $1.915 billion and domestic debt at $332,820,000 for a total national debt of $2,248,420,000.
As of April 2016, according to Central bank’s latest report, the national external debt stands at $2.34 billion and domestic debt at $522,593,000 for a total national debt of $2,862,593,000.
The difference between the total in 2008 and the current total as of April 2016 is $614,173,000. That total doesn’t include the outstanding payments GOB will have to make to the Ashcroft Alliance for BTL, which stands at around $400 million. That would put this government’s contribution to the national debt somewhere over $1 billion.
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