And so, while government says it hopes to recover somewhat financially before it even thinks of cutting the pay of teachers and public officers, can it pay its creditors?
11 days ago, Standard and Poor rated Belize's outlook as negative and warned the finance world that, quote, "The negative outlook reflects increased vulnerability to nonpayment of upcoming debt service, particularly the interest due on Belize's global bond (around US$13 million) in August 2020." End quote.
Here's what the Prime Minister had to say on it today:
Jules Vasquez- Reporter
"Are we at risk of sovereign default? We know that Belize's ratings have been lowered."
Rt. Hon. Dean Barrow- Prime Minister
"Well, I want to be careful. I don't want to be saying anything to our bondholders by way of a press interview. So, I will just say this. I note that, what the people who specialize in this sort of thing refer to as the official international sector- it's basically the ones that matter in terms of this whole business of sovereign debt, commercially and multilaterally; the official sector, the international official sector is pretty much agreed that there has to be debt relief for the sovereigns. We are playing a waiting game to see whether that call for wider sovereign debt relief will in fact be actioned by the IDB, the World Bank, the IMF. So it's a bit of a waiting game. I don't want to go further than that but your point earlier that you meet a juncture where there is no money. That speaks for itself but I say nothing more."
What’s the Fate of the Super Bond?
The Super Bond, as well as other external debts owed to international creditors, is also an area of concern for government given the financial crunch it has found itself in as a result of the economic shutdown. While being circumspect in response to whether Belize can continue to meets its external debt obligations, Prime Minister Barrow says that the international financial institutions such as the Inter-American Development Bank, the World Bank and the International Monetary Fund have already begun instituting sovereign debt relief.
Prime Minister Dean Barrow
“I want to be careful, I don’t want to be saying anything to our bondholders by way of a press interview, so I would just say this. I note that what the people who specialize in this sort of thing refer to as the official international sector, the IFI’s basically; the ones that matter in terms of this whole business of sovereign debt, commercially and multilaterally. The international official sector has pretty much agreed that there has to be debt relief for the sovereigns. I think they’ve already initiated a move to provide the sovereign debt relief for those that qualify for either, international development assistance, those are the poorest of the poor: Sub-Saharan Africa and places like that. But they do chorus a call for wider debt relief to so-called middle income countries. In that context, we are playing a waiting game to see whether that call for wider sovereign debt relief will in fact be actioned by the IDB, the World Bank, the IMF. So it’s a bit of a waiting game.”