BELIZE CITY, Wed. Sept. 22, 2021– Yesterday, during the official Independence Day ceremonies, the Prime Minister, Hon. John Briceño, gave the country an update on the state of the nation’s economy which was hopeful in tone, but first he made yet another call for members of the public to get vaccinated to aid in the fight against the COVID-19 pandemic. He noted that the pandemic has changed lives all over the world and that his administration’s first task upon assuming office in November 2020 was, and still is, to “defeat the Covid-19”.
“We do this by making vaccines available for everyone, and we are doing that. Today every Belizean from 12 and up can and should get vaccinated to protect ourselves, but more so to protect each other,” the Prime Minister stated.
He said that when his administration took the reins of government in November 2020, they inherited an economy “that was near depression levels”, with an unemployment rate of almost 30% and the poverty rate soaring to over 50%. While the Covid-19 pandemic was a key cause of the economic decline, Hon. Briceño additionally noted that, “These were clear evidence that our nation was being mismanaged or perhaps more appropriately, abandoned.”
In his speech, the Prime Minister said that over the past 10 months, a process of revitalization has begun in two sectors that are key contributors to our economy: agriculture and tourism.
“Currently, agriculture is leading the economic resurgence, growing almost 25% in the second quarter of this year. Our small and large farmers are growing and producing more and our people are responding by eating what we grow and produce,” he said.
He added, “Through the tireless efforts of the Minister of Tourism and his team, tourism is not far behind — growing by almost 20 percent in the second quarter as well.”
The PM further noted that there are now 25,000 less unemployed persons than there were at the start of the PUP’s term in office a little less than a year ago.
“”Overall, our economy is now headed in the right direction, experiencing an overall growth of 22% in the second quarter and over 6% for the first six months of this year — more than triple what our IFI partners like the IMF expected,” the Prime Minister went on to say.
He said that in the first four months of this fiscal year, the country has been, “operating in the black, not in the red.” He also pointed out that the country is no longer borrowing a million dollars daily to pay salaries to public workers— thanks to the sacrifice of those government- paid employees.
As a result, the Central Bank overdraft balance, which previously was $100 million, has been completely wiped out, and there is now a zero where that daunting figure used to be.
“In other words, we are no longer paying any interest, as we no longer owe any monies on overdraft with Central Bank,” Hon. Briceño explained.
And thus, in light of these positive indicators, the Prime Minister asserted that, despite the current “tenuous position” of the economy, there are solid reasons to believe that we might be entering the early stages of a recovery, and he pledged that “if this holds, we will fulfill our promise to public officers and teachers” — a reference to an assurance GoB made to public workers that it would revisit the 10 percent salary cuts implemented earlier this year if it exceeded its economic targets.
As was recently reported, the Government of Belize is in the midst of negotiations with Superbond holders that could result in the settlement of that enormous foreign debt at a “deep discount”. This potential deal hinges on a Blue Bond financing arrangement agreed upon between GOB and the Nature Conservancy. In essence, the “Superbond” will be traded for Blue Bonds, and the country will, in effect, reduce its foreign debt by 45% as a result.
“We still have some ways to go to get that across the finish line, but we look forward to that day when we will finally be released from this noose hanging around our necks and to the substantial saving of almost half a billion dollars to the government and people of Belize,” the PM said.
If this deal comes to fruition, the country’s debt to GDP ratio will be lowered by 12% and cumulative cash flow relief of almost $130 million would be enjoyed over the period of the PUP administration, said the PM.
He said that the government is also working on restructuring other government debt as a part of their debt management efforts.
“In this regard, we are pleased to report that our close friend and partner in development, the Republic of China – Taiwan, has agreed to reschedule all ten of our loans with them amounting to more than $286 million by providing a principal moratorium on these loans for 3 years. This will yield much needed cash flow relief,” he announced.
He also announced that the country’s foreign exchange reserves reached $1.33 billion on September 1, 2021 — a first since 2015 under the previous UDP administration when there was a payout of hundreds of millions of dollars to Lord-Ashcroft-owned entities following the nationalization of BTL. He also said that for the first time in history the net foreign assets of the country’s domestic banks surpassed the half-billion dollar mark.
“Fellow citizens, our currency peg is no longer at risk. There will be no devaluation under this PUP administration,” the Prime Minister proclaimed.