Posted: Tuesday, December 13, 2016. 10:24 a.m. CST.
By Richard Harrison: Belize is a small, under-developed, independent nation member of Sistema de la Integration CentroAmericana (SICA); nestled in the Caribbean basin of Central America.
Relatively peaceful and safe, compared to its neighboring countries, it has been acting like a socio-economic pressure-release-valve since the civil conflicts in Nicaragua, El Salvador, Guatemala and Honduras in the latter half of the last century.
Today most of rural Belize, which accounts for around 50% of the population, is inhabited by Central American descendants and their offsprings, with growing representations in the urban centers.
Central America, and especially Guatemala, must recognize this role that Belize has played in allowing pretty much an open-door immigration policy that allows their people the right of movement in search of a better way of life….of hope. They must appreciate that an independent and stable Belize serves the best interest of all Central Americans, including Belizeans and Guatemalans.
A lot of our national debt is directly related to this function of Belize as a place of refuge for people from Central America who find it necessary to leave their villages and towns in their home country in search of hope and a better way of life for their families. Our schools, hospitals, lands, passports, jobs and public services have been made open to them…and this has cost Belize a very pretty penny…..we have had to invest in communities, roads, bridges, security, utilities services, among other things, to accommodate this influx.
Belize’s history is defined by a “giver nation”, when placed in this context.
However, Belize now faces a challenging debt crisis….and is seeking a third restructuring of the US$530 million SuperBond, within a period of 9 years and only 3 years since the last restructuring. This SuperBond accounts for around 40% of Belize’s total external debt.
If this restructuring effort fails, Belize could face default on its loan obligations….which could have all kinds of domino-effect repercussions on the general economy….with the possibility of a devaluation and all its destructive implications.
Belize has made some fundamental financial and economic errors….and is now on the verge of becoming a beggar nation….each year leaning more on Taiwan, European Union and other friends to close its deficit gaps. Belize cannot face this debt challenge on its own and remain sustainable without causing crushing, undue hard times for its citizens and residents….we simple are not producing at the level required to pay.
The leaders of Central America, through the institution of SICA, needs to help Belize face this debt challenge. Belize needs to make a formal approach, call for a special round of meetings, and present credible arguments and proposals.
This can be in the form of SICA lobbying for Guatemala unilaterally ending its claim to Belize forthwith…based on simple human dignity….because this claim is a principal bottle neck that chokes and stifles Belize’s development, which does not serve the best interest of Belize, Guatemala nor Central America. Belize in return would agree to join SICA in allowing Central Americans to travel freely within Belize, observing the standard rights and responsibilities of citizens. Belize would also commit to developing an open and more modern financial market, so that Belize can serve Central America in the way Hong Kong, Taiwan and Singapore has served China. Reciprocal trade and investment treaties with SICA countries would also be on the table, to facilitate more and better trade and investment climate within the region.
At the same time, SICA can and should assist Belize through the Central American Bank for Economic Integration (CABEI) with refinancing a significant portion or all of the SuperBond by purchasing Belize sovereign guaranteed bonds at LIBOR + 1 over 30 years, with 2 years grace period, where only the interest will be paid during the grace period. This compact is to acknowledge and value the past, while investing in hope for the future of Belize and all the Central Americans who have and will benefit from a peaceful, rapidly growing and stable Belize.
Belize governments need to better manage the financial and economic affairs of the country….it must learn from its mistakes….and place legal limits on borrowing and other financial and economic matters…..it must create a more competitive and productive economy….but Belize is more than its particular governments….Belize is a melting pot of mostly law-abiding people seeking a relatively peaceful and safe way of life, from all over the world, but especially from Central America.
Belize needs help…..it does no one good to allow Belize to fall into the category of another beggar nation.
Belizean leaders….do not continue to squander our historical national investments….you need to think, talk and act with dignity, humility, discipline and decorum…we need to get closer and speak honestly to our friends and allies, not isolate ourselves in egotistic, ignorant, destructive bliss.
Belize….you need to live your National Constitution….and create the environment where ALL can advance according to merit, ability and integrity.
The views expressed in this article are those of the writer and not necessarily those of Breaking Belize News.
This article was written by Richard Harrison, Belizean investor in production and services businesses in Belize. He holds a Masters in Business Administration degree from Lancaster University.