The Office of the Prime Minister confirmed today that the visit of the IMF officials is slated for October 25 to November 4, 2004; however, we were unable to get clarification today on what exactly the IMF would do while in Belize, and with which key officials its representatives would meet.

The PM?s explanation for the IMF visit is that the IMF is being asked to help Belize develop ?a home-grown program? to address public finances and debt.

In early October, PM Musa had asked the IMF, the World Bank and the Inter-American Development Bank (IDB) to help Belize out of its current financial troubles.

Today, the Prime Minister recorded, ?On the occasion of the annual meeting of the International Monetary Fund (the IMF), and the World Bank in the first week of October, a Belize delegation led by me held discussion with the IMF and the World Bank, and also with the IDB.?

He said that the purpose of the meetings with the IMF, World Bank and IDB was ?to brief them on the recent developments in Belize, focusing on our Government?s short-term fiscal consolidation and debt stabilization strategy, including expenditure cuts in the budget of some $35 million; efforts to strengthen revenue collection and measures to restructure the Development Finance Corporation (DFC).?

The Prime Minister further stated that he had ?reviewed with them [the IMF, World Bank and IDB] the background to the current fiscal and debt situation, including the growth and development agenda of Government since 1998, when we came into office, and the US$500 million recovery and reconstruction costs resulting from the hurricanes, which were largely financed by external borrowing. So that while the economy has grown tremendously during the period 1998 to the present; we have the fiscal deficit and the public debt to address now.?

He asserted that, ?Belize is not seeking an IMF structural adjustment program.?

We recall that in its last report on Belize, released this April, the IMF declared that the DFC was ?de facto insolvent.? It also said that the Government had continued to run high budget deficits that had driven public debt to 92% of GDP?the problem areas that the Government is now asking the IMF for help with.

Today, the Prime Minister said, in his pre-recorded statement, that Belize had incurred much of its foreign borrowing because of the hurricanes that had struck since 1998, primarily Keith and Iris. However, other international reports from the financial community have suggested that additional factors that have driven up public debt, include Government?s overspending on projects, including its residential housing program.

Also, Government has funneled more than $300 million into the DFC for various purposes, including housing, private sector loans and student loans. Among DFC?s biggest debtors, though, are private entities such as the national transportation monopoly – Novelo?s Bus Line, which, since March, has been taken over by its bankers, including the DFC.

The Government is also seeking the IMF?s assistance in restoring the DFC to its ?core functions.? The DFC plans to liquidate its portfolio by divesting roughly half of its assets, including about $100 million from its loans portfolio.