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GOB Needs $190 Million for 2006/2007 Debt Shortfall! #117408
02/09/06 03:16 PM
02/09/06 03:16 PM
Joined: Oct 1999
Posts: 81,194
oregon, spr
Marty Offline OP

Marty  Offline OP
GOB Needs $190 Million for 2006/2007 Debt Shortfall!
posted (February 6, 2006)

$190 million, that's how much government needs to find to avert a
sovereign default in the coming fiscal year. That figure is contained in
this draft report, the external debt strategy compiled by a team of
foreign experts from Houlihan, Lokey, Howard and Zukin, a European
Investment Bank.

7NEWS has obtained a copy of the confidential report and it paints a
worrying picture of Belize's national debt service profile. For the
upcoming fiscal year 2006 to 2007, the experts project that debt
servicing will reach a record $280 million. According to Ministry of
Finance figures, the government will have just $90 million available for
financing, leaving a financing gap of $190 million. That's money that
government doesn't have, in fact the report states that the sum of
principal and interest due to external creditors during 2006/2007 is
250% of the available amount.

According to the experts, the government must decide whether it will
bridge the gaps by making new loans or go back to the institutions and
countries that loaned them the money in the first place and request
restructuring. Both courses are riddled with pitfalls but some option
has to be pursued, otherwise, the report makes it clear, government will
simply not be able to meet its debt requirements and faces the risk of
default. Well that's what the experts say, but to hear the Prime
Minister and Minister of Finance Said Musa tell it, there's no worry at
all, in fact he hasn't even read the report.

Rt. Hon. Said Musa, Prime Minister of Belize
"Well we've been working on it and this is the very reason why we
recruited and appointed this debt management team, Houlihan, and I am
sure if you read the whole report, which incidentally I haven't read
yet, it hasn't been presented to me yet, you will see, because they've
been mandated to do this, to come up with a plan for us to address the
debt situation."

Jules Vasquez,
Sir as Minister of Finance this report was done on January 16th...

Rt. Hon. Said Musa,
"That's not the report, that's preliminary, that's not the report. The
report has not yet been presented to government."

Jules Vasquez,
But the preliminary report I would imagine...

Rt. Hon. Said Musa
"(That) is only giving the diagnosis."

Jules Vasquez,
But it has four options in the preliminary report.

Rt. Hon. Said Musa,
"Yes, yes but it's not the report. I don't know where you get whatever
document you have but that is not the report of Houlihan, they are
presenting it in the next few weeks."

Jules Vasquez,
But it us authentic what I have and the number...

Rt. Hon. Said Musa,
"What you have may well be authentic, I don't know what you have, but,
yes, analysis of presenting four options and so on, yes that is so."

Jules Vasquez,
But the debt shortfall is $160 million, this is a real problem, this is
the greatest financing shortfall your government has faced. It appears
we'll be in imminent threat of default if something magical does not


Rt. Hon. Said Musa,
"Man Jules that is what you said last year; 'about 2005 PUP was going to
default, the government was going to collapse,' you and those that you
support, your television station. That is what they have been
predicting, doom and gloom, all along. The truth of the matter is the
PUP government has never defaulted on its debt obligations and we will


Executive fantasy aside, for the record, Channel 7 news has never
predicted or speculated upon imminent default, we have only reported on
warnings of default risks from international financing institutions and
rating agencies. The final report from Houlihan, Lokey, Howard and Zukin
is due later this month. The study is being paid for with foreign funding.

Re: GOB Needs $190 Million for 2006/2007 Debt Shortfall! #117409
02/09/06 04:57 PM
02/09/06 04:57 PM
Joined: Feb 2006
Posts: 12
Wisconsin USA
wannadream Offline
wannadream  Offline
What does this mean to the little people of Belize? How will it affect them?

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