Lord Neil Gibson

Feb 22, 2012

PM says Superbond is Jack Boot on throat of Belizeans

Dean Barrow

The super bond slid into the election campaign when the prime minister announced the date for early general elections. He said he was going back to the people for instructions to do something about the super bond. The result was a prompt downgrade to junk territory of Belize’s credit ratings from agencies such as Standard and Poor and Moody’s. If he was floating that idea, today, at the launch of the U.D.P. Manifesto, Prime Minister Barrow was more provocative. He said he was not concerned at all about the Belize’s credit ratings and that bond holders would have to sit around the table with a future U.D.P. government to re-negotiate the five hundred and sixty-five million dollar bond. The February payment has been made but another is due past the elections in August, which according to the PM’s bravado, he won’t pay at eight and half percent interest rates.
Dean Barrow
“I was deliberate in announcing the date of the election, deliberate in saying that the U.D.P. was asking for a new mandate to among other things, do something about the super bond. Now, that really set the cat among the pigeons. And you say that the so called rating agencies fell all over themselves to say’ oh wi di downgrade Belize bonds. Explain to mi how Mr. Man downgrading the Belize bonds hurts the Belizean people? The Belize Bonds are the bonds that are owned out there by all those that loaned the People’s United Party this one point one billion dollars for which there is nothing to show. And if you downgrade the bonds so that the bonds have less value, I say that that strikes me something like poetic justice, because while the greatest blame for the share of saddling this country with the super bond must lie with the P.U.P., the creditors, the bond holders, the commercial entities, agreed to that super bond, knowing full well that the kind of burden it was placing on the Belizean people is absolutely unconscionable, merciless; those people also have a share of the blame. Therefore, this eight and a half percent that we have to begin to pay as of August of this year, which means ninety-four million dollars of our re-current revenue that ought properly speaking to be spent on you the people of this country. This eight and half percent interest rate, we will not suffer. Belize is a country that is a country of honor; we do not easily renege on commitments but if there are commitments that in effect represent a jack boot on the throat of the Belizean people, then unless those that are applying that jack-boot are prepared to re-negotiate, they will see that the Belizean people are not going to take it. We won’t lie down so that anybody could tek chance on us and the bottom line is, ‘Mr. Bond holder, Mr. Bad creditor, come to the table and renegotiate with Belizeans. You are obliged to give us a fairer deal.”

So what will be the impact of the prime minister’s statement? Well, it is likely that there could be a further erosion of investor’s confidence and that the economy could continue to languish. At the launch of the People’s United party manifesto on Tuesday, Francis Fonseca, called on the PM to whining about the super bond and put the economy back to work. The super bond is a consolidation of government loans that was negotiated in 2006 and concluded in 2007. It also includes loans made by former U.D.P. administrations.