BELIZE CITY, Thurs. June 23, 2016–“It is almost as if they are on crack and are trying to find every which way to get their hands on money,” declared Opposition Leader Hon. John Briceño, who slammed the Government of Belize for “red-eyeing” Social Security funds.
“It has come to our attention for the past few days that the government is trying to dump their shares, mostly from BEL and BTL, to the new piggy bank, the Social Security fund, the people’s money. We are viewing this with much concern,” said Briceño following the PUP’s National Executive meeting held on Monday.
A leaked letter from PM Barrow indicated that he offered the Social Security Board $10 million of the Government’s shares in BTL and $45 million of its shares in BEL, for a total of $55 million.
However, Briceño told us that the Prime Minister is “risking the people’s money.” He pointed out that an investment in BTL, which is saddled with a $48 million arbitration award to British Caribbean Bank Limited (which is to be paid over twenty years as a loan), is not a good investment.
Despite Briceño’s warning, however, today, Thursday, the board of directors of the SSB met and accepted the Prime Minister’s proposal. However, one condition, according to the chairman of the SSB’s board, Doug Singh, is that, “SSB would be guaranteed a buy-back by GOB in the event that it wishes to divest the shares in the future.”
Singh, who says he is confident that the buyout is a good investment, told the media, “I don’t know what concerns or information the Opposition is asking for, but the information can be made pretty much available. In fact, Social Security is required to publicize investments when it makes investments.”
Earlier, Briceño had said, “We have just got a copy of a draft letter that was sent by the Financial Secretary to Mr. Nestor Vasquez, the Chairman of Belize Telemedia, and it talks about the settlement of arbitration award to the British Caribbean Bank Limited for $48, 554, 972.78 that took place on the 22 September 2015.”
Briceño, who branded the government “broke and desperate,” further alleged that so far, the Social Security Board has already invested $39.5 million in BEL, $50 million in BTL, $2.5 million in the National Bank, $5 million in the Development Finance Corporation (DFC) and $600,000 into initiatives of Mayor Darrell Bradley and the Belize City Council.
A period of economic gloominess in the country was recently predicted by the International Monetary Fund (IMF), who, Briceño told us, prescribed such measures as increased GST from 12.5% to 15%, new taxes on previously non-taxed goods and a massive retrenchment of government workers.
Briceño explained that the government is currently struggling to pay government workers. He told Amandala, “Last month, they had to go into overdraft to be able to make salaries.” (According to the online encyclopedia, Wikipedia, “An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation, the account is said to be ‘overdrawn’”.)
After Amandala emailed a query to the Financial Secretary at the Ministry of Finance, Joseph Waight, he told us, “The Government of Belize maintains an overdraft facility at the Central Bank of Belize from which it draws funds to meet all large payments, including payments for salaries, debt payments, utilities, and for other operating expenses.”
He further informed us, “On a daily basis, the Government deposits into this account revenues arising mainly from the collection of customs duties, income taxes, GST, and other smaller inflows.”
Drawing down on their overdraft, however, simply means that the government is borrowing money that it does not have to make payments, and repaying it through revenues collected later.
Briceño said, “The government has mismanaged the economy. Shrimp is down. Banana is down. Sugar is down. Papaya is down. The free zone is on its knees. Our exports have already decreased dramatically since last year, yet our imports continue to increase, so that gap is being widened, so there is going to be even more pressure on the 2-to-1 peg that we have. Our foreign currency is running out; last year it went down by around $150 million.”
While the government turns to Social Security funds, increasing gas prices and other avenues for fast cash, Briceño said, “All of this now is starting to converge like the perfect storm coming on top of the government, and they have no answer.”