G.O.B.’s takeover of Telemedia affecting investor confidence

In news on the economy, three weeks ago, Alan Slusher, financial advisor to the Prime Minister and new director of the recently nationalized Belize Telemedia Limited, was interviewed on the Chamber of Commerce’s television show Business Perspectives. In response to Celine Cleland-Gomez’s allegation that the government’s nationalization of Telemedia was hurting investor confidence in Belize, Slusher defensively asked, “Where’s the evidence of that?”

Delahnie Bain Reporting

The evidence comes from Oppenheimer and Co. Inc., a Minneapolis-based firm that provides financial advisory services. Channel 5 has obtained a copy of a September 23rd commentary on Belize entitled “Belize- Multiple Caution Flags” by Carl Ross of Oppenheimer. Ross knows Belize well. He was once in charge of the Belize file at Bear Stearns, the New York based investment banking and securities trading and brokerage firm. In a very interesting piece, Ross warns that with Taiwan abandoning its 20-year crusade for acceptance into the United Nations, Belize may soon lose its most important funding stream. Taiwan provides tens of millions of dollars to Belize each year. Taiwan’s unmatched generosity to Belize and the remaining handful of its diplomatic allies was based on a fair exchange. In return for Belize’s support for Taiwan’s membership of the UN, Taiwan heaped millions of dollars on Belize. With Taiwan no longer interested in membership at the United Nations it will have no reason to keeping throwing money at Belize. President Ma, the new Taiwanese president, hinted at this in his visit to Belize in May of this year. Ross correctly points out that if Taiwan scales back its financial support this will make it doubly difficult for Belize to service its debt repayment, making the option of increased taxation a distinct possibility. Ross warns investors that the nationalization of BTL by the Government of Belize not only sets a terrible precedent but seems to be a developing pattern and raises serious questions about the rule of law and property rights. Against this background he predicts that no foreign investor would want to buy Telemedia after its hostile acquisition and notes that the local market is not deep or large enough to finance it. Is that good enough evidence?
And what does all this mean for ordinary Belizeans? Well, it means that we should prepare for more belt-tightening.

We will keep you posted on developments in the wake of the Telemedia nationalization and how the IMF views the new debt taken on by G.O.B. Stay tuned. A full copy of his article can be viewed by going to www.channel5belize.com.

Live and let live