The Government’s bold move to take control of Belize Telemedia Limited (BTL) this week is a move that has gone down in the history books of Belize. Nationalizing a well established and profitable company is not often seen in this Caribbean jewel. In fact, Belize has always welcomed investors by introducing several incentives to promote healthy investing in the country. While nationalizing (Belizean-izing) a company can bring economic benefits to a country facing economic problems, this action can send mixed signals to investors abroad.
Established in 1988 as Belize Telecommunications Limited (BTL), the Article of Association stipulated that no one person or group could own more than 25% of the company. In addition, it was drafted in such a way that Belizeans would be the major shareholders in the original BTL. However, over the years, successive governments were able to amend the Belize Telecommunications Act to an extent that eventually pushed Belizeans’ control of the telephone company out the window. Both, the People’s United Party (PUP) and the United Democratic Party (UDP) administrations caused Belizeans to slowly lose control of Belize’s telephone company. It got to the point that both governments allowed for 94% of BTL’s shares to be controlled by various Lord Michael Ashcroft related companies.
During every election campaign, political leaders speak to the business sector, meet one-on-one with voters, pontificate at rallies and talk to students in an attempt to get their support. You will hear every political leader say, “We will protect the national interest of our people.” Fine and very good!
Governments are elected to govern and get the job of nation-building done. Whichever and whatever method government chooses should be in accordance with the law of the land, international standards and by consensus of the people. From what I have perceived, because of certain actions done under the previous administration to secure BTL’s interest, the general population was not happy with Lord Michael Ashcroft. But, it boils done to one thing in business; investors are in the business of making money. The way politics works in Belize is sad, but it is a reality; both political parties get monies from these multi-millionaires to finance their electoral campaigns. Once a political party is elected, there is a general sense of commitment to these financiers. An investor will do what needs to be done to make money, straight as that.
Understandably, the government is frustrated over a London Court ruling where the Government of Belize (GOB) will need to reward BTL some $38.5 million as part of a secret agreement signed by the previous administration. In addition, government would have faced another court case against this same BTL for a reward of more than $38.5 million based on other litigations between GOB and BTL. But these decision were not subjected by BTL, these decisions were made by the court in a ruling. The Prime Minister told the nation that GOB will not honor these rulings and in fact, “will put up no longer” with BTL. Because the government is cash strapped and cannot and will not pay BTL the monies ordered by the London courts, it has proceeded to “take control” of BTL in “the best interest of the Belizean people.” It is a bold move by the current administration; a move that will have its repercussions.
However, owning BTL brings to light other issues that allows them for complete control. Remember the issue vested between 1993-1998 and the whole issue of phone tapping? With GOB owning BTL, they will have absolute power to tap into private phone conversations. Whether this is to happen or not, how will we know or keep track of the event. Is the government hiding behind the so called “best interest of the Belizean people,” and taking advantage of a people that have been abused by successive governments to carry out hidden political purposes? Sure we the poor Belizean people admire the bold move of the government to Belizean-ize BTL, but the repercussions are far too much for an unstable economy. If Belizean-izing BTL fails as Plan A, does the PM and his cabinet have a Plan B? And if they do, will they let us the Belizean people know what that Plan B is, before boldly making other changes?
As much as I am not happy with the way BTL is owned, I will say that the PM’s decision to nationalize/Belizean-ize BTL was not the best way to deal with the problem. To take a company by force, thereby leaving the investor no choice but to file for compensation through the Belizean Courts may send bad signals to investors home and abroad. It means that if government cannot meet a debt obligation to your company, it may move to take control of your business rather than compensate you; simple and straight as that. These actions display a socialist behavior that is not healthy for any country with a struggling economy seeking to attract foreign investors. The government should have made an offer to BTL, asked Belize to purchase the shares and move on from there. GOB took control of BTL instead, and as temporary owners, will squash the court issues then proceed to sell hopefully to Belizeans. That action is not safe for investors who seek an environment that they can be a fair player in the country’s economy while protecting their business ventures.