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Aug 10, 2011

Standard & Poors downgrade Belize

Israel Marin

The reduction in Belize’s credit ratings by Standard & Poor’s has been attributed to government’s recent acquisition of B.E.L. that is heavily indebted to its creditors.  Compensation to Fortis, the previous owner of B.E.L. has not been paid and in the case of Telemedia, the other utility that has been nationalized twice, that debt is still pending. The combination will undoubtedly swell the existing national debt which currently stands at approximately two billion dollars.  According to Israel Marin, Vice President of the Belize Chamber of Commerce & Industry, contrary to projected economic growth, there will be a considerable reduction in government revenues, particularly in monies it collects from the oil industry.  That shortfall, Marin says, will prohibit GOB from meeting its overall debt obligations.

Isani Cayetano

“In terms of the national debt, the acquisition of B.E.L. along with the re-nationalization of Telemedia adds to the existing national debt and it is compounded by the super bond issue.  How easy or how difficult is it to try to rebound from this particular situation and place the country in a better standing?”

Israel Marin, Vice President, Belize Chamber of Commerce & Industry

“I think right now if you’re looking at the financial sector in the U.S. what has happened because of the recession or the expectation that the economy of the U.S. would not grow as fast or that there has been a slowdown in China or that there has been a slowdown worldwide or a slowdown in Europe; what we notice is that the price of oil went from almost a hundred and twenty now to, I think it was trading in the eighties this morning or yesterday.  That might sound like good news for us because then that means that the gas at the pump that we will be paying is going to be less but in reality the truth of the matter is that the industry, the petroleum industry in Belize has been the one that has been paying the most taxes and keeping us afloat.  That has been keeping government afloat.  Remember that the windfall tax goes anywhere after ninety dollars.  After ninety dollars government gets fifty percent more of the tax above ninety [dollars] or however that formula works but they get a lot more.  Now that is not there anymore so there is no more windfall tax when the price goes down below ninety [dollars].  So that means that government revenues are also going to be affected here in Belize.  So as far as economic growth in this country if we were projecting four and a half [or] five percent I think we have to re-look at that and see where we’re at because I don’t think we’ll have that economic growth that we have been projecting.”

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6 Responses for “Standard & Poors downgrade Belize”

  1. RadicalBelizean says:

    The whole world is being downgraded stop this political nonsense. If the US has been downgraded why do we in Belize think our nation that produce nothing and main trade is tourism not to be downgraded it beggars belief.

  2. wisdom says:

    What???? Didnt we just get downgraded last week? So we got downgraded again?? Oh wait a minute!!! Its the same downgrade being recycled. Whew, what a relief.

  3. Belize says:

    So what? Every country is been downgraded. The might United states of America was downgraded on friday last. France will be next.

  4. Elgin Martinez says:

    Believe it or not China has the number 1 economy right now.

  5. Eye in the Sky says:

    And believe it or not. Chine will soon own Belize if we keep importing them.

  6. Jennylee says:

    Gosh, I wish I would have had that information eiarelr!

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