Posted: Wednesday, December 7, 2022. 5:59 pm CST.
Contributed by the Ministry of Economic Development: On Monday, December 5, Honourable Christopher Coye, Minister of State in the Ministry of Finance, Economic Development and Investment, was invited to speak at the at the United Nations Conference on Trade and Development’s (UNCTAD) 13th Debt Management Conference, in Geneva, Switzerland, on the topic of, “Relief, Restructuring and Recovery: Dealing with Debt in Times of Global Crisis”. Minister Coye represented Belize among 400 participants from over 100 countries and shared Belize’s recent and successful experience on negotiating debt relief in the current international debt architecture.
Minister Coye noted that Belize’s successful USD 364 million Blue Bond transaction in 2021 was only a part of our overall emergency economic plan and debt relief strategy. He emphasized that as unpopular as some of the administration’s fiscal policy decisions were, the political discipline to stand by these decisions paid off handsomely in Belize’s negotiations for debt relief, with its external commercial creditors. Such demonstrated commitment to prudent fiscal policy was endorsed by the International Monetary Fund.
Minister Coye further explained that mobilizing private capital would not be possible without credit enhancement and risk reduction strategies, coupled with the confidence engendered by the political will and discipline of the Government of Belize, in its fiscal policy action.
He also highlighted some of the difficulties countries like Belize encounter in seeking to sustainably managing their debt. These include:
The persistence of arbitrary and exclusionary rules amongst Multilateral Development Banks, and the failure to account for multi-dimensional vulnerabilities; these effectively prohibit small vulnerable economies like Belize to access debt relief and concessionary financing from particular programs and institutions.
External private capital can be an important source for development and climate finance, but due consideration must be given to the special circumstances of developing economies that are inherently perceived to be at higher risk if they are to be a timely, affordable, accessible and debtor-friendly source of finance for developing economies.
Risk reduction and credit enhancement for investment grade rating of debt issuance are critical drivers to achieve affordable and accessible private capital for developing economies. Insurance can be useful for risk reduction, but discussions on Insurance as a solution, should involve the establishment of catastrophe risk insurance instruments as a global public good, rather than as an instrument for profit making.
Minister Coye concluded by, calling for a reimagining and restructuring of the global financial architecture, to ensure that developing economies are enabled with the necessary and sufficient tools to achieve climate and economic resiliency. He alludes to the global community to be bold in ensuring this materializes and to not fail the people we represent, or future generations to come.
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