BELIZE CITY, Thurs. Mar. 9, 2017–The Opposition, the People’s United Party (PUP), called a press conference this afternoon at their Independence Hall headquarters, where the PUP Leader Hon. John Briceño presented the PUP’s take on the recently concluded negotiations between the Barrow government and Belize’s bondholders, dubbed Superbond 3.0.
Briceño said that he listened to the Prime Minister’s press conference yesterday and can’t help but think that the Prime Minister is living in an alternate world, “spewing out these alternate facts that he has been repeating so many times, that I believe that he has now convinced himself that it is the truth.”
When the Prime Minister read his first budget in 1998, he had to admit that the PUP left a primary surplus of 98.1 million dollars, which is 4 percent of GDP, Briceño said.
“By 2016, at the end of his last budget, the UDP government had a primary deficit of 87.6 million dollars,” Briceño explained. The PUP leader – not detailing the debt generated by a subsequent PUP administration — said that the government has created a debt swing of over 180 million dollars.
Briceño said the UDP government debt has gone from 2.316 billion in 2008 to 3.3 billion dollars. By August last year, the UDP government had borrowed over 1 billion dollars.
Briceño said that the Barrow government Superbond 3.0 is hocus pocus economics. “Those numbers are arbitrary. It’s nothing more than an academic exercise,” said Briceño.
Briceño went on to explain that what the government and its advisors have done is used a high discount rate to fool the Belizean people and tell them that they have saved hundreds of millions of dollars. “But any decent, successful businessperson will tell you that cash flow is king”, said Briceño.
“There have been no savings or reductions or haircut from the principal, on Superbond 3.0; we still owe 526.5 million dollars US. There is no win for us when it comes to the principal,” Briceño said.
“Government has already agreed to pay 0.25 percent for consent fee to the bondholders,” Briceño said. He continued to state, “When we look at the expenses so far, the Prime Minister has already agreed to pay out 4.5 million dollars. To renegotiate the Superbond, we are in the hole 1.5 million dollars.”
“In the end, we are worse off,” Briceño said.
Briceno said that according to the IMF, the UDP has not achieved a primary balance of 2 percent of GDP for the past 5 years.
Briceño explained that the government is down by 2.2 percent of GDP and that the government will have to find 168 million dollars in 2018 -2019.
“The Prime Minister will not be around, but the IMF is already prescribing some prescription to the government,” he said.
Briceño asked attorney Chris Coye to explain the IMF revenue measures and the expenditure measures. Raising the GST rate to 15 percent should raise 41 million dollars, Coye said.
Coye outlined that the Prime Minister is trying to raise 70 million dollars through revenue increases and 30 million by means of reduction of expenditures. Another 6 million dollars should be generated through an increase on sin taxes. Coye explained that 100 million dollars will be collected through taxes on fuels. On the expenditure side, a nominal wage freeze would enable the generation of another 31 million dollars, but the Prime Minister has already ruled that out, he mentioned.
Parametric reform of the pension scheme should generate 8 million dollars, Coye explained from the IMF tables.