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Aug 2, 2006

Government admits it can?t pay its debts

That Belize is in a whole heap of financial trouble is hardly news … but when Belmopan issues a press release admitting that it cannot pay its debts and will go hat in hand to its creditors … well, we better sit up and listen. Today’s release from the Ministry of Finance comes on the heels of Prime Minister Said Musa’s trip to Washington D.C., where in the company of advisors from the firm of Houlihan, Lokey, Howard & Zukin, he met with the Interamerican Development Bank and a number of other international financial institutions. Apparently, the message from Washington was that it’s time to negotiate. According to today’s release, Government will ask the cooperation of the country’s private sector lenders in what they are calling a “rearrangement” of the nearly one billion U.S. dollars in external debt. At the same time G.O.B. will approach its public sector creditors for additional assistance to address (quote) “the country’s currently unsustainable debt burden.” Reversing field after several years of assuring that all was well on the financial front, the P.M. is essentially throwing in the towel. “Servicing of the Belizean external public sector debt stock on its existing terms is no longer a viable option,” says Musa, “we must urgently ask the cooperation of our creditors to help put this debt stock on a sustainable financial footing.” The release, which appears to be directed primarily to a foreign audience, says that consultations with creditors will commence immediately in the hope of coming to satisfactory terms by the end of the year.


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