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Wednesday, June 3, 2020
Home Letters If we go to the IMF…

If we go to the IMF…

Dear Editor,
In March 2017, Belize renegotiated its US $526.5 million bond (BZ$1.053 billion). The interest got reduced from 5% to 4.9375 %, and was to increase to 6.767 %. The maturity date was changed from 2038 to 2034. Belize makes two US$13 million (BZ$26 million) payments annually — one in February and the second in August, for interest only.

The evidence suggests that Belize was baited by the bondholders (mostly US financial elite). Firstly, the agreement states that Belize’s GDP growth has to be at least 2% for the first 3 years. They know this is highly unlikely, because we live in a hurricane zone, and if we get hit by a hurricane or an extraneous shock like a pandemic, we will have GDP growth
lower than 2%.

Secondly, if we don’t meet all the stipulations or want to renegotiate, Belize has to enter an IMF agreement. According to Dr. Michael Hudson, an economist, the IMF is an office out of the Pentagon in Washington. The IMF is designed to open up countries’ economies to the US’ and other developed countries’ financial elites. A country cuts government spending and becomes desperate for foreign investment to avoid social disintegration.

Privatization and other policies gives ownership of a countries’ resources to global elites. We have already experienced this with BECOL (a subsidiary of Fortis Inc.), which is foreign-owned, and according to Belize Electricity Limited, they have to pay them for electricity during the coronavirus pandemic, so no waiver of the electricity bill is possible.

In my view, Belize’s going to the IMF was inevitable once we signed the new superbond deal. It was by design. Our leaders are myopic and focused on political expediency.

Both the PUP and the UDP are equally responsible for the mess we are in. Both have had an almost equal number of years in power, although the UDP has had a few more years in government, but the PUP were the first to facilitate neo-colonialism.

There is no way a country should have a bond. Countries usually default (Argentina, Mexico, Grenada, etc.). Bonds are designed for corporations. They only pay interest, and when the bond matures, they reissue and get new subscribers. That is the main reason the US Federal Reserve is buying bonds, because in the current climate, no new bond subscribers are possible and many US companies would go under, since they have US trillions‘ worth of bonds (debt).

Rolling over bonds for countries is unlikely. It usually is an IMF agreement that pulverizes a country. It is usually onerous on the poor.

Jamaica is a good example of what an IMF agreement does to a country. The high murder rate is likely a sideeffect of Jamaica’s many IMF agreements.

What are we going to do? If we go to the IMF, we will constantly be involved in a class war in the form of crime and murder. Belize has already started down that road, but the social upheaval will be put on steroids.

Yours truly,
Brian E Plummer

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