BELMOPAN, Tues. Mar. 9, 2021– On Tuesday the upper House of Parliament passed the Central Bank Amendment Bill with a divisional vote of 9 senators voting yes, the 3 UDP senators voting no, and senator for the unions, Hon. Elena Smith, abstaining. The amendment to the 2011 legislation is intended to provide liquidity to the system and not to buffer failing companies, according to government senator Hon. Eamon Courtenay.
“What the bill does is to provide a framework for something to be done. It provides for the Central Bank to prepare and produce policies and plans that it will, first of all, make public. When those are made public they may be implemented with the approval of the Minister, and those are things that are designed to use the liquidity that is sitting in the system and doing nothing. And to say to the domestic banks, there is not any individual or it is not the Government that is going to be doing anything, but it is saying to the domestic banks that the monies that are sitting there idly that are not being put to productive use should be put to productive use and be made available to the private sector.” Senator Courtenay stated.
He shared that the purpose of the bill is not to aid any non-performing company, and added that these types of legislation have been used in other parts of the world successfully. The country is attempting to offset the economic fallout by making financing more accessible, Senator Courtenay said in his pitch for the amendment that the government is focused on starting the march back to economic normalcy. With vaccines now in the country, the PUP administration is prioritizing “bouncing back” the economy, he said.
And while the PUP’s are hopeful that this new amendment will bring some financial relief to our system, the UDP senators flatly rejected the proposed bill. Lead Opposition Senator, Hon. Michael Peyrefitte argued that the bill would need some “fleshing out” and that the details of the Central Bank’s new roles would have to be shared with the public first.
“We’re not getting at this point the details of how it will work and I think, Madam President, that that needs to come fast and furious. Yesterday would be too late. Because then the financial community needs to appreciate exactly how this program will run and needs to be confident that the Central Bank will not give any preferential treatment to anybody,” Senator Peyrefitte commented.
He added, “They must not just be independent, they must also seem to be independent. Because what you are asking the Central Bank to do now in this bill is to take an active role in the economy, and if they take an active role in the economy, exactly what is that role?”
As mentioned, Senator Elena Smith, who represents the unions of the country, decided to abstain from voting on this bill. During her presentation, she shared the concerns of the National Trade Union Congress of Belize (NTUCB) and said that the terminology “unusual and exigent economy and financial or systemic circumstances” was too broad for the union’s liking. They asked for the establishment of a defined set of criteria that would be used to determine exactly what scenarios fall under the scope of the terms in the amendment.
“What we don’t want to happen, Madam President, is for mischief to be created, because it is not clear, and we give too much of a space; it is too broad that persons can do what they believe they are able to do when something is too broad.” Senator Smith explained.
Senator representing the business community, Hon. Kevin Herrera asked for an additional layer of oversight for the Government and the Minister of Finance. He also emphasized that the system has to be properly managed to ensure that that the added liquidity does not have an inflationary effect on the system.
“Perhaps an additional oversight should be added to the process, perhaps including the social partners. Again, we’re talking about public finances… so I think some oversight mechanism would be very good to help manage and ensure that the intended, that what the bill intends, are secured and that it does not go down a path that we will not like or we don’t foresee at this point,” said Hon. Herrera.
During his remarks to end the debate surrounding the bill, Senator Courtenay said, “Madam President, tens of thousands of Belizeans are unemployed, thousands of businesses have failed, thousands more are on the edge and we say that we are currently facing an urgent, unique, unusual and exigent financial circumstance, and we have to have instruments designed by the Central Bank promulgated and made public so that access can be had to some of those funds in managed and regulated ways in order to stimulate, to create jobs and to get Belize bounced back betta.”