Posted: Tuesday, July 19, 2022. 2:56 pm CST.
By Aaron Humes: It is an eye-popping figure by any stretch of the imagination – $150 million over four years, borrowed at low interest from the Export-Import Bank of the Republic of China in Taiwan. It is intended to represent “budgetary support” to the Belize Government.
But the primary concern in the Senate as it debated on Monday was where is that money going – and more importantly, to whom?
As Opposition Senator Jacklyn Burns put it, “The purpose of the loan is somewhat vague. And while I understand that it is a loan offer for providing financing costs and expenses incurred and to be incurred, my concern regarding that purpose has to do with the idea that it’s not very specific. And so, I don’t want that the government would feel that they can create other expenses based on having this financing available and can easily use the funds in ways that are of concern to the Belizean people.”
Philip Willoughby, referring to neighbourhoods in his caretaker constituency of Port Loyola, said they wanted to know one thing: “And what does this translate to them? What does this mean for them? They are the ones; they are the majority who will be paying back these loans, in particular this 75 million US dollar loan. Sir, the most difficult thing for a decent human being, a god-fearing person, is to get up right now and tell his children, I can’t provide for you. I can’t pay the utility bills. I can’t pay the rent. I can’t provide the basic food basket.”
Antonio Herrera warned that “…we are almost to $400 million in loans in 1.6 or so years of this government. Madam President, they always say there is a light at the end of this tunnel, but in my view, this is a train coming hard at us. We’re heading just in the same direction of the Superbond, only because this time it might be called a Super Duper Bond.”
But Minister of State for Finance Christopher Coye highlighted that in its time in office, the United Democratic Party government borrowed close to $600 million in similar budgetary support.
And while Belize still borrows, our debt-to-GDP ratio has actually gone down to 88 percent, bringing these figures more in line.
Senator Coye further pointed out that it was the UDP’s borrowing that had wrecked the debt-to-GDP ratio with little to show, and while not ideal, the funds will help to shore up the overall deficit in the budget: “What that means is you have to make loan payments over and above interest. You have to pay for the principal. While we look forward, we are affected by what has been done in the past. As far as the past is concerned, in a matter of twelve years, the debt went from two billion to four billion that is loans…the budget itself was put under pressure and the bilateral cooperation with Taiwan, the discussions and ultimately the agreement meant we had to look at solutions that included debt. So, this is not anything new. This is from early last year. Under that agreement, a seventy-five million dollars loan was agreed to cover the financial disaster that was this government when this administration took over.”
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