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Jul 14, 2011

Financial securities firm, Nomura, gives Belize a grade

Early this week, Carl Ross of Oppenheimer Funds warned that recent events in Belize appear unfavorable towards private enterprise, the rule of law, contracts and rights for private property. Ross also warned that there is trouble ahead due to the spiraling foreign debt. On Wednesday, Boris Segura of Nomura, a global investment banking and securities firm, writes that the status quo is unlikely to be sufficient for the sovereign debt to be sustainable. In June, Nomura released an article with gloomy predictions for Belize following the expropriation of Belize Electricity Limited. And after doing research for two days in the Jewel last week, the firm opines that while the short-term negative impact of the B.E.L.  nationalization may have been exaggerated, there are formidable challenges ahead. According to the article, Nomura representatives met with government officials, who justified the “acquisition spree” by calling it a means to right several wrongs of the previous administration. But Nomura says that the pervasive state interference in economic activity could be sending the wrong signals to local and foreign investors. As for the issue of compensation for B.E.L. and Belize Telemedia Limited, the article says it is highly unlikely that GOB will make cash payments; instead it is predicted that the Ashcroft Group and Fortis Inc will receive long term government bonds, deferring the fiscal risk into the future. The public sector debt to GDP is predicted to decrease slightly from eighty percent to seventy-five percent. That signals that the heavy debt burden will make it difficult to regain market access, just when the Superbond begins to amortize in 2019. And by then it is predicted that Belize will be unable to service its sovereign debt. Another debt restructuring is expected before 2019, but in the meantime, the next two Superbond payments may be secured with oil prices on the rise.

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3 Responses for “Financial securities firm, Nomura, gives Belize a grade”

  1. Storm says:

    GRAB YOUR PITCHFORKS AND TORCHES, AND LET’S THROW OUT ALL THE RASCALS WHO HAVE RUINED OUR FUTURE!

  2. Liberty and Freedom says:

    Here we go again. Sounds like something out of the American political playbook. Blame the prior administration for the debt. Instead of doing something to solve the problem, all that is being done is finger pointing, And the answer to the problem is to issue kong term government bonds and pass the hot potato to the next administration.

    How about starting with basics: clean up corruption, adhere to a balanced budget and take the necessary steps to privatize industry (like BEL). How can the GOB run a utility company when they can’t get a grip on the crime situation. That costs Belize millions in unrealized income from tourism, foreign investment and foreign aid. Why would any country give foreign aid to Belize if their is no return on investment. Foreign aid is not free – it carries a price tag.

    Belizeans have the knowledge and power to change the politicians – this is not about political parties; it is about the rule of law and the rights of the people.

  3. Earl Grey says:

    THE WHOLE WORLD IS BEING FINANCIALLY RESTRUCTURED……….CHINA IS THE NEW SUPER POWER AND SOUTH AMERICA IS RISING………..sadly, AMERICA’S BEST DAYS ARE BEHIND HER.

    BELIZE CAN STILL SURVIVE but WE HAVE TO INCREASE EXPORTS……………
    AND BE ABLE TO FEED OURSELVES.

    WE CAN DO IT WITH THE RIGHT LEADERSHIP!!!!!!!!!!

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