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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.

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15 Responses for “PM says Superbond is Jack Boot on throat of Belizeans”

  1. Storm says:

    Yes, it is a jackboot firmly on the throat of our children and grandchildren — it will be half a century before it is paid off IF EVERYTHING GOES RIGHT.

    But we owe it and must pay it, and learn a lesson that there is no free lunch. Almost all of that money was stolen by a select few officials and their friends, and the rest was wasted. WHAT DOES THE JEWEL HAVE TO SHOW FOR IT, EXCERPT THAT WE AGREED TO ENSLAVE OUR CHILDREN AND GRANDCHILDREN?

    But there is no honourable way to evade it — it is both our shame and our burden.

    Every minute you work to pay off money stolen by others, I hope you will remember how you got that debt — we VOTED for it! At least, we elected the crooks and let them run wild with our future for their selfish benefit.

  2. ConcernedBzean says:

    Based on Central Bank of Belize Annual Reports for 1998, when the PUP took office in 1998 they inherited BZ$694 million pre existing national debt. The super bond was issued in 2007 for BZ$1.1 billion Belize dollars paying only interest due until 2019 when principal plus interest will become due. The time to maturity is 22 years, meaning it will not be completely paid off until 2029.

    Of the BZ$1.1 billion, BZ$694 already existed that needed to be consolidated. Between 1998 to2008 the PUP used “debt financing” to grow the economy and repair storm and hurricane damage.

    Considering the UDP’s two nationalizations of private companies at an estimated BZ$400 million each for BTL and BEL, they have in‐effect added BZ$800 million to existing national debt for compensation owing to former owners of these entities.

    UDP took out an additional BZ$48 million loan for pavement of PG to Jalacte in Toledo District. According to Central Bank, it is estimated that UDP has gotten numerous smaller loans amounting to US$121 million.

    Total figures comparing PUP and UDP
    PUP in TEN YEARS FROM 1998 to 2008 = BZ $1.1 billion

    UDP in FOUR years FROM 2008 to 2012– BZ $921 million which includes compensation which willl have to be paid for nationalizations).

    If you cant see that UDP has poor business ethics and are an incompetent government who handles everything in a “ghetto” (for lack of a better word) manner, then something is wrong, look at the crime in our country, the cost of living. Look at the way they carry themselves in the house of representatives, it is a complete utter shame to look at our so called prime minister Dean Barrow carry on shouting with his ignorant area representatives. Look at the 4 years the damage that they have done to our country as opposed to the 10 years of PUP administration. If anyone thinks Belize is doing better under this administration, you have no outlook on situations, and have allowed yourselves to be brainwashed by Dean Barrow and his “nationalize” strategies which have costed us millions of dollars in debt. WISE UP!

  3. Jan says:

    In all truth right now the current Prime Minister yes will literally brainwash the masses to vote them in again. How can you say we wil re-negociate the super bond. Please I am no big time scholar but its like me going to the bank making a loan and then but my own standards to the bank and say I want to pay my way which bank would do that if I know that I done get my loan in first place. Please gosh as usual Belizeans take all for gospel espacially on election time…

  4. Laughinghyena says:

    Bondholders did not lend to the PUP Mr. Barrow, they lent to the Government of Belize. The bond covered both UDP and PUP accumulated debt, and you well know that.

    At some point in the future, Belize will have to borrow again, that’s just the nature of the beast. Kicking your creditors in the throat for short term politcal gain is irresponsible in the long term. Also, contrary to what PM would have you believe, our credit rating DOES matter. GOB might not borrow on international markets for the forseable future, but private companies most likely will. And so will our banks. And they will pay a lot more for capital because of our high sovereign risk.

  5. Pelican says:

    Well said C.B. Why the PUP does not explain it outright I do not know!!

  6. Attitude says:

    If Superbond is “Jack Boot on throat of Belizeans”, why wasnt anything done since they took office in 2008 or as soon as this was known or during the course of the last 4 years? OOhhhhh it wasn’t in their mandate on elections rt so they now need to get that by re-election!

  7. critical thinker says:

    ConcernedBzean is absolutely right! What is happening to those in red shirts waving red flags? A bunch of ignorants or they could care less about what is happening to Belize. Dean Barrow is endebting us further and further. And not much to show for it.

    But he and his royal family are laughing all the way to the bank with Belize’s money as legal fees with this supposed fight with Ashcroft. Barrow is not fighting with the englishman. They are playing as if they have a fight, only to be able to collect money from Belize’s coffers when they go to court. Barrow has made Lois Young a millionaire! but with our money! What oudacity!

    The laugh is on us, Belizeans.

  8. ABC says:

    In 2009, in a class i was taking, the late Mr. Davis who use to work at City Council told the class, “I am sorry for you guys, this government selfishly agreed that they will pay interest now for the superbond and you guys will have to work hard to pay that interest and bullet payment on principal in 2019. So he said, now they will continue the borrowing and spending our dollars and then u will have to pay for it, they will have probably died or retired and left the country.”

  9. rod says:

    this pm is the jackboot around the necks of all belizeans.

  10. DEF says:

    ABC, Mr. Davis was right (and God rest the dead). However, the burden he saw in 2019 assumes the Belizean economy wouldn’t grow in the 20 years from 2009. At decent growth rates the economy should double or triple in 20 years, but alas, after the last 4 years, all bets may be off indeed.

  11. Retired CEO says:

    Very sadly so, what this arrogant pm is not telling the populace is that the Super bond benefitted the GOB past and current, and was very effective in stimulating the economy coupled with maintaining some sort of balance for the entire country. Furthermore, it is very normal that countries borrow money to stimulate their economy, creating some sort of employment stability, growth and development. Fool di talk but da no fool di listen. As this arrogant fool speaks he knows deep in his heart, that he continues borrowing and will have to do so well after the elections in order to maintain the current economic policies espoused by the UDP. All we need to do his to reflect on our giant neighbor up north, the great US of A. and we see the same economic trends practiced. Likewise, the entire global community is facing an economic mess coupled with much chaos. What this arrogant pm is not telling the populace is that it is very possible that the jewel will see the return of the killa VAT immediately after they are re-elected. Ofcourse, that is if the gullible public accepts his lies and vote UDP. Imagine the possibilities, while Mr Barrow his family and cronies smile all the way to the bank. Wake up Belizeans, vote PUP on March 7, 2012. Enough is enough, chase this crazy baldhead out of the land.

  12. alley cat says:

    Country Belize in US dollars.
    Year Amount
    2000 0.38
    2001 0.34
    2002 0.5
    2003 0.48
    2004 0.48
    2005 1.36
    2006 1.36
    2007 1.2
    2008 1.2
    2009 0.95
    2010 0.95
    2011 1.01

    Taken from http://www.indexmundi.com/g/g.aspx?c=bh&v=94

  13. Earl Grey says:

    And …THEY HAVE MONEY TO BUY THE ELECTION WITH THOUGH, no problem with that.

  14. charles says:

    The superbond is an issue until 2029, so until then should we hear that the opposition intends to bring a better plan, until then should the present goverment be in power. After that GOB should install a very very tought law that anyone that sells us out will surely receive the punishment of the courts in Belize, so never again should be sold by the white head.

  15. Sasha says:

    PM is talking about bond money when he gave away millions of $$$$ to people writing off their loans when they could afford to pay it off. Belizeans wake up from your sleep and kick them in the @$$ on March 7, 2012.

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