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Friday, August 14, 2020
Home Editorial The story behind the 2008-2020 UDP’s massive trail of debt

The story behind the 2008-2020 UDP’s massive trail of debt

Many people believe that the present Republican Party administration in the USA, led by Mr. Donald Trump, set out on an agenda to undo as many of the signature accomplishments of the previous Democratic Party administration, which was led by Mr. Barack Obama, the first president of that country who isn’t Caucasian, as it could.

It is argued by many that the agenda in the US was motivated by racism. One major achievement of the Obama government that the present Trump government has pulled out all the stops to try to dismantle is a health law that was intended to make healthcare more affordable for the less well-off in that country. It is a fact, though, that Democrats and Republicans don’t share the same views on the management of their economy. The Democrats are described as “tax and spend,” and they are enthusiastic about welfare programs, while the Republicans practice “trickle down” economics and discourage welfare programs because they believe they “encourage laziness.”

In Belize, the present UDP administration set out to bring embarrassment to everything touched by PUP hands. The UDP government claims they are/were about repairing bad projects/contracts made by the PUP. They have gone at their mission with great gusto. In almost all of the cases, however, they have failed, and in the wake of some of these failures there are massive bills for the Belizean people to pay.

Every major project the previous administration had a hand in developing, or business they privatized, was an enterprise that the UDP went after when they came to power in 2008. Most of their efforts can be described as disasters — one of the few not falling into that category being the acquisition of 70% of the shares of Belize Electricity Ltd. (BEL), which the private owners, Fortis Inc., relinquished just about as eagerly as Cascal BV relinquished their shares in Belize Water Services Ltd. (BWS) to government.

Cascal BV, a British/Dutch company, bought majority shares in BWS from government (PUP) in 2001, and sold back the shares to government (PUP) in 2005, for the same price it paid for the company.

Two major projects of the 1998-2008 PUP administration, Mahogany Heights and Universal Health Hospital, were kicked around, the former withering from neglect, and the handling of the latter backfiring into a mammoth increase of $60 million plus on an already hefty debt.

The PUP envisioned a new Belmopan when they built the satellite town of Mahogany Heights, near to the junction where the Coastal Road meets the George Price Highway. The project was riddled with corruption. The government reportedly bought the land for the town from the wrong person, and some contractors the government hired imported unserviceable equipment and delivered shoddy works.

Instead of building on the infrastructure that existed when they came to power, the UDP government set about caricaturing the project, and put in no new investment, with the clear intent to watch Mahogany Heights remain a ghost town.

A group of medical doctors and a PUP insider, Mr. Luke Espat, were listed as owners of the Universal Health Services (UHS) hospital that had received loans from the Social Security Board and the Development Finance Corporation during the PUP regime of 1998-2003, and when UHS couldn’t pay its debt the government bailed it out by guaranteeing a loan from the Belize Bank. Later, the PUP government used foreign funds to pay off the private hospital’s debt at the bank.

The new UDP government, with some justification, went after the Ashcroft-owned Belize Bank and took back the money the PUP had paid the bank to settle the UHS loan. Later, when they found out (they must have found out) that the painful truth was that the sovereign guarantee for the private hospital put us on the hook to pay, they still persisted in going to court, at incredible cost to the people.

The PUP handed over the management of the International Business Companies (IBC) Registry and IMMARBE (the International Merchant Marine Registry of Belize) into private hands, and when the UDP government was warned about our country being blacklisted because of the operations of shady ship operators, they took back the management of those companies. We went to court again, as usual we lost, and at this time the full cost to our national treasury for this failure is being tallied.

A number of publicly owned businesses were privatized by the PUP of 1998-2008, with the government’s printing company (Print Belize), Port of Belize Ltd., and BTL being notable among them. (It had become the fashion to privatize government assets after neoliberal political leaders such as Lady Margaret Thatcher of the Conservative Party served as Prime Minister of the United Kingdom, from 1979 to 1990, and Mr. Ronald Reagan served as president of the USA, from 1981 to 1989.)

When a government engages in privatization, it executes a cheap sale of public assets, and sees them off into private hands, with the long-term objective that the people will get more and better paid jobs, and the government will gain more in taxes than it gained through ownership, all because the privately owned entity would be better run.

Print Belize and Port of Belize Ltd. were sold by the PUP government to local entrepreneurs, and when the UDP came to power these businesses became targets to destroy. The government cut off nearly all contracts to Print Belize, and folded its arms as the Port of Belize Ltd. went into receivership, partly because the owner wasn’t making payments to the Belize Bank for other failed businesses.

Most Belizeans weren’t sold on the economic benefits of privatization, and the sale of majority shares in Belize Telemedia Ltd. (BTL) also wounded our pride.

The 1984-1989 UDP government, under the leadership of Hon. Manuel Esquivel, took the Belize Telephone Authority (BTA) and formed the Belize Telecommunications Ltd., with the government controlling 51% of the shares, British Telecom controlling 25%, and 24% of the shares being reserved for Belizean ownership. A PUP government then came along and sold majority ownership in the company to Lord Ashcroft and his group, who formed Belize Telemedia Ltd.

Belizeans wanted BTL back, and they chased the PUP from government in 2008 and handed over the reins to the UDP, which set about immediately to return the prized BTL, this symbol of our independence and what Belizeans can do, to government control.

The UDP botched this one too: The re-acquisition price of the company ended up being in the vicinity of a staggering half a billion dollars — many, many millions more than it is worth.

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