BEL­MOPAN-The Be­lize Cham­ber of Com­merce and In­dus­try (BC­CI) says it sup­ports the de­ci­sion to rene­go­ti­ate the "su­per bond" af­ter the Dean Bar­row gov­ern­ment an­nounced ear­li­er this week that it was de­fault­ing on the re­pay­ment of its ex­ter­nal debt. A state­ment from the Of­fice of Prime Min­is­ter Dean Bar­row said that the next in­ter­est pay­ment of US$46 mil­lion on Be­lize's ac­cu­mu­lat­ed US$544 mil­lion for­eign debt, re­ferred to as the "su­per bond" is due on Au­gust 20.

The pay­ment would have been the coun­try's first un­der the in­ter­est pay­ment plan on the US dol­lar Step Up Bonds due in 2029. The gov­ern­ment said that the rea­son for the non-pay­ment is that the stepped up pay­ments rep­re­sent al­most one half of the coun­try's to­tal pub­lic in­debt­ed­ness un­der the new stepped up 8.5 per cent rate.

The main op­po­si­tion Peo­ples Unit­ed Par­ty (PUP), which said it was nei­ther con­sult­ed nor in­formed of the gov­ern­ment's de­ci­sion, has called on Prime Min­is­ter Bar­row to ad­dress the na­tion on the im­pli­ca­tions of his ad­min­is­tra­tion's de­ci­sion to de­fault on the ex­ter­nal debt pay­ment.

In a state­ment, the BC­CI said that it be­lieves that, with­out ex­cep­tion, "debts must be paid and that we must be fi­nan­cial­ly re­spon­si­ble cit­i­zens. "How­ev­er, where the eco­nom­ic vi­a­bil­i­ty of our coun­try is at stake, the terms of re­pay­ment should not be so oner­ous as to stran­gle or de­ter the coun­try's eco­nom­ic growth. It is in this vein that the BC­CI, in prin­ci­ple, sup­ports the rene­go­ti­a­tion of the bond with the goal of mak­ing debt re­pay­ment more man­age­able."

The BC­CI said that the debt bur­den must be re­struc­tured so that it is sus­tain­able in the long term "there­by en­abling Be­lize to ho­n­our its fi­nan­cial oblig­a­tions with­out fur­ther dam­age to the econ­o­my. "The BC­CI urges the Gov­ern­ment to use any fis­cal re­lief achieved through a rene­go­ti­at­ed bond to in­tro­duce pro­grammes to stim­u­late and pro­mote eco­nom­ic growth and in­vest­ment.

"Fur­ther, the BC­CI urges the gov­ern­ment to take ap­pro­pri­ate mea­sures to trim its own ex­pen­di­ture so that it can in­tro­duce bal­anced bud­gets and avoid the re­cur­rence of an un­sus­tain­able debt bur­den," the pri­vate sec­tor group said. Be­lize is cur­rent­ly try­ing to rene­go­ti­ate its for­eign debts with cred­i­tors and has of­fered them a three pronged pay­ment plan, which in­volves an ex­ten­sion of the pay­ment pe­ri­od on the su­per bond well be­yond the 2029 ma­tu­ri­ty date.

Man­ag­er of Be­lize Busi­ness Bu­reau, Hipoli­to Bautista, said that there are penal­ties for de­fault­ing and the coun­try may now have to look at the Wash­ing­ton-based In­ter­na­tion­al Mon­e­tary Fund (IMF) for as­sis­tance. He said the cred­i­tors "could seize all our as­sets...all our for­eign ex­change as­sets and that will take away from us the for­eign ex­change we need to keep this econ­o­my go­ing and so it seems quite like­ly that the gov­ern­ment will have to go to the IMF, which he de­scribed as a "se­ri­ous cus­tomer" that is hat­ed in some parts of the world "be­cause they play no games".

CMC