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Nov 8, 2012

The harsh economic indicators of life in the jewel

In tonight’s economic indicators we look at the staggering external debt and what it says about the health of the economy. The government is engaged in the restructuring of the super bond and its inability to meet its debt obligations has brought the International Monetary Fund to Belize. In this analysis, we look at the outstanding external debt which has ballooned to well over a billion dollars. Large fiscal deficits and a growing debt burden are critical problems facing the economy. This happens when a government spends more than it earns resulting in a huge fiscal deficit as data from 2000 to 2011 shows.

Disbursed Outstanding Debt in millions of US dollars has risen steadily over the past twelve years since 2000. There was a sharp increase during the period between 2001 and 2006 when it reached almost nine hundred and eighty-six million U.S. dollars, a value of eighty-seven point one percent of G.D.P. in 2005.  Since then, the percent ratio of Outstanding Debt to G.D.P. has hovered between eighty-one and seventy-one percent.  The data also shows that the outstanding external debt in 2008 rose considerably from one billion U.S. dollars to one billion twenty-two million dollars.

The staggering debt clearly presents a huge problem. As the amount of monies being paid out by far surpasses the amount of money earned and when money is borrowed to pay for consumption, without a prospect of revenue to service and repay the loan.  A low public debt is usually an indication of economic health while a high public debt indicates financial troubles for a country. The challenge facing the government is to reduce budget deficits and manage accumulating debt. The country’s credit history plays a prominent role in determining what levels of debt it can sustain without landing on a sovereign debt crisis.

Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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6 Responses for “The harsh economic indicators of life in the jewel”

  1. Storm says:

    The report neglects to mention a couple other things that should be of interest to the IMF. The recent audit of this GOB’s books shows that they have massive gaps in the CURRENT records, money is simply missing and unaccounted for. That is undoubtedly evidence of theft, pure and simple. That is on Hon. PM Barrow and his government.

    Who stole the money from the national treasury? Where is it now? I assume the IMF will want to have those questions answered before it can offer to help us.

    Also, my guess is that IMF will want to know where the borrowed money went in the first place. Was it all borrowed for and applied to a legitimate purpose, or did some of it find its way into private accounts?

    I pray for an honest government here one day. It has been a long, long time since we might have had one.

  2. Ricky Malthus says:

    My fellow Belizeans, we have to get off this merry-go-round with government expenditures. We have to restrict government to providing essential services and leave the economy to the private sector. The government will be the referee in making certain we play by the established rules. But get the government and its corruption out of our lives. The UDP just stated that there are two sides to the corruption issue but Belizeans disagree. The UDP make and enforce the rules; investors and businesses merely accept, for a fee, what is being offered. It is the UDP that has created illegal contract s of adhesion for criminal activities. As long as we continue in this vein, we will have an economy in disequilibrium where our resources will be abused and inefficiencies will continue and both the external and internal debts will soar.Let’s get solve the economic crisis by getting rid of government debts by getting rid of corruption and corrupted politicians and civil servants.

  3. Rod says:

    All I can say is all you people who continue to support this useless pm and gov. Deserve whey unu get the rest of the people don’t but unu deserve it for being ignoramuses .

  4. Storm says:

    Malthus, as usual your economic ideas are sound, but the problem is how to get rid of corrupt politicians, when both parties today have corruption in their core.

    If a STRONG reform party cannot be formed before the next election, one capable of winning in a majority of districts, then it may be necessary to bring down corrupt government with civil disobedience — a Belize Spring, People Power, choose your term.

    The need for a solution is URGENT. The damage already sustained from 2 successive corrupt and/or incompetent governments will take at least a generation to repair, if we begin tomorrow with the best leadership the world has ever known. Pity our children and grandchildren for the harm that has been done by politicians we elected!

  5. Kiwi says:

    Money usually finds its way to people and organisations who can manage it well. I agree with Storm in that the recent audit of the GOB showed a lot of gaps in how the money was spent. Belize can negotiate all it likes with external bond holders, but if it doesn’t prove that it has adequate controls and accountability over its own finances, even if by some miracle the terms or the balance owing was written off, the country would be back in the same situation in the not too distant future.
    I think that education from an early age about money principals is key, along with urgent accountability for GOB finances, will eventually alleviate the fiscal cliff. It has taken a long time to get in this debt hole, so it will take some time to get out, but a long journey begins with a step in the right direction…

  6. IaMF'd Ha Ha Ha says:

    The IMF knew this, that is why they loaned the money. IMF destroyer of nations. The IMF puts countries in debt and then take over their natural resources when they can’t pay back. Goodbye Belize. Hello Corporate Country..

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