GOB Negotiating US$25 million Loan from Venezuela
(January 11, 2006)
Belize's national debt is somewhere between $1.9 billion, excluding government guarantees, and $2.3 billion, which is close to or just above 100% of GDP. But that heavy burden isn't stopping government from taking on new debt. 7NEWS has confirmed from senior government sources that the Ministry of Finance is negotiating a US$25 million loan from the Government of Venezuela.
A pair of senior Ministry of Finance officials led by advisor to the Financial Secretary Joe Waight traveled to Venezuela this week to negotiate with a senior Venezuelan official, Rudolph Romer, the head of public credit. The terms or the structure of the credit have not been finalized but it will be what's considered a soft loan, loosely proposed to be at an interest rate of somewhere between 5 and 10%.
At this point it is not known what government plans to use the money for, whether it will be used to retire more expensive debt or as they say, for "balance of payment support," which basically means to keep the boat afloat. The loan is expected to be discussed by an IMF team that arrived in the country today.
What we do know is that the oil rich Venezuelans have been lending lavishly in the region, buying friends and making life easier for cash strapped countries burdened by crushing debt service requirements. The Jamaicans recently benefited from a US$300 million soft loan from the Venezuelans, in addition to financing for an oil refinery. When this loan comes through, and we are told it is a "when" and not an "if," it will have to be approved by the House and the Senate.