Access to low-cost financing is a major challenge for Belize’s economic recovery, says Minister of State for Finance

By Benjamin Flowers: Minister of State in the Ministry of Finance, Economic Development and Investment Christopher Coye this week said that not having access to low-cost financing from international funding agencies is a major hindrance to Belize’s recovery from the effects of COVID-19.

Coye, speaking at the Meeting of Governors of the Caribbean Region with the World Bank held on Wednesday, stressed that the combination of the pandemic and the increasing occurrence of hurricanes, droughts, and floods, has made economic recovery increasingly difficult for the public and private sector. This is compounded by the fact that both sectors have had to borrow at high-interest rates forcing them into dangerously unsustainable debt situations.

Coye pointed out that Belize consistently finds itself ineligible for the concessionary financing opportunities offered by the Internal Financial Institutions (IFIs), despite being one of the most affected countries in the world by weather-related events and other natural hazards with average annual losses due to natural disasters of close to four percent of GDP.

In a summary of Coye’s remarks released yesterday, the Ministry notes that “Belize does not yet qualify for grant and concessionary financing from International Development Association (IDA), an arm of the World Bank. This is due to Belize being a small low-lying coastal state and not a small island.”

Coye also indicated that this exclusionary policy was arbitrary and appeared contradictory since Belize is internationally recognized by the United Nations as a small island developing state (SIDS) and receives special consideration under the United Nations Framework Convention on Climate Change and the various climate funds including the Adaptation Fund, the Green Climate Fund and the Global Environment Facility for which the World Bank serves as trustee.

He called for IFIs to urgently align concessionary financing eligibility criteria, particularly the IDA criteria, to take better account of the critical status of Belize’s economic realities.

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