Posted: Tuesday, April 28, 2020. 8:37 am CST.
By Aaron Humes: “I will do my damnedest to refrain from any pay cut for public officers.”
Prime Minister and Minister of Finance Dean Barrow was adamant on this point in meeting with reporters Monday afternoon, but how will he do it?
Teachers will be paid later this week after missing payment last week. For now, funds will come from the Central Bank as there is ‘some headroom’ to borrow. Government has already borrowed $75 million for the Unemployment Relief and Food Assistance Program and the P.M. said they will lean on the Bank for more:
“… if we borrow all that we can borrow we should be able to see the public servants through until there is a total reopening of the economy which will then put us in a position to start to see the revenue inflows that will allow us to continue on from the point we reach. In other words, we should start to see some revenue enhancement before we reach the point where all the monies that I propose to borrow from the Central Bank would have run out. So, in this way, I hope to keep public officers entirely without any pay cut.”
And Belize also has to meet its own external debt obligations, particularly in the case of the “Superbond” re-negotiated four years ago. Interest payments twice a year continue up until the end of the current decade, when the first of five ‘soft bullet payments kick in.
While he said he did not want to say anything to bondholders even as Belize’s sovereign debt rating has been cut, he is closely watching developments with the international financial institutions such as the Inter-American Development Bank, the World Bank and the International Monetary Fund, which have already begun instituting sovereign debt relief.
“I note that what the people who specialize in this sort of thing refer to as the official international sector… has pretty much agreed that there has to be debt relief for the sovereigns. I think they’ve already initiated a move to provide the sovereign debt relief for those that qualify for either, international development assistance, those are the poorest of the poor: Sub-Saharan Africa and places like that. But they do chorus a call for wider debt relief to so-called middle income countries. In that context, we are playing a waiting game to see whether that call for wider sovereign debt relief will in fact be actioned by the IDB, the World Bank, the IMF. So it’s a bit of a waiting game.”
The Prime Minister said he was not aware of, according to the Belize Business Bureau, the United States opposing such relief or delaying it, but contends they may not have much of a say.
Belize’s debt is close to 100 percent of GDP at more than $3.5 billion dollars.
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