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Belize’s hemp industry blocked due to correspondent banking

It will take some time for Belize’s tourism industry to bounce back to where it was at the start of 2020. In actuality the country’s economy on a whole will take years to recover from its external and domestic debt. Prime Minister alluded to the hope of some debt forgiveness from abroad. A few months ago amid the Covid-19 pandemic Prime Minister spoke of the introduction of the hemp industry in Belize with the hope of injecting new monies into the country. The launch of this initiative crash landed, however, when the banks in the United States have denied correspondent banking as it relates to this specific industry. Prime Minister says for now the Government’s hands are tied until some further consideration is given to the investments.

It will take some time for Belize’s tourism industry to bounce back to where it was at the start of 2020.  In actuality the country’s economy on a whole will take years to recover from its external and domestic debt.  Prime Minister alluded to the hope of some debt forgiveness from abroad.

Rt.Hon Dean Barrow, Prime Minister of Belize: “It is a fact that there is a ballooning of the debt to GDP ratio. It is a fact that we continue to borrow from the Central Bank to meet our wage bill and our operating expenses. There is some comfort to be had from what seems to be now the revised thinking of the international financial institutions and even the IMF. There seems to be almost a prescription, a complete turnabout with respect to the fund – the IMF- a prescription to say that people have no choice but to borrow their way out of the economic disaster that is the consequence of the pandemic. Now they are also suggesting that the international community will have to look at some form of debt forgiveness with respect to bilateral and multilateral debt. I’m not quite so sure how far that will go. With respect to their pronouncement that continued borrowing is the only way to go they do draw a distinction between those countries that are able to borrow freely on the international commercial markets and those that have to limit the borrowing to multilateral borrowing because clearly there is a limit to the resources that especially small countries are going to be able to get from the multilateral community. I have to hope for the sake of whoever comes next that indeed there will be less talk and more action on the part of the bigger countries and the international financial institutions. Remember that there was this kind of pledging conference at which a number of leaders said oh they will find billions of dollars to help small countries – it hasn’t happened yet or certainly the pledges that have actually come in are far smaller than the amount that is being aimed at. I don’t know additionally of any multilateral financial institution that has said to any small country certainly they haven’t said to Belize – there does appear in like the poorest of the poor Subsaharan Africa and those places I think are already being cut some sort of slack but for people, for countries such as Belize so far it’s all talk, it’s all rhetoric and no action. I have to hope that indeed there will be substantial debt forgiveness on the part of the IFIs in the not too distant future so that the new government can begin to see, anticipate, some tangible relief.”

A few months ago amid the Covid-19 pandemic Prime Minister spoke of the introduction of the hemp industry in Belize with the hope of injecting new monies into the country.  The launch of this initiative crash landed, however, when the banks in the United States have denied correspondent banking as it relates to this specific industry.

Rt.Hon Dean Barrow, Prime Minister of Belize: “Hemp licenses have been given but there is a little bit of a problem or perhaps a hell of a problem. The investors are finding that nobody in Belize will bank them, none of our commercial banks here will accept any account from any enterprise that has a license to do hemp and that is involved in the hemp industry. I have spoken to some of the banks myself because it is legal and it is not only legal here it is legal in the state- talking about hemp, I’m not talking about marijuana where there’s a difference between the federal approach in the US and the approach of individual states. The amount of THC content that we allow coincides with the US position so what is to be classified as hemp in Belize by way of the SI is also classified as hemp and not as marijuana in the US so I really don’t understand what there’s this reluctance on the part of the financial institution to bank these people. The only answer I was given is that the correspondent banks that are handling the accounts of the local banks have told our local banks you are not to touch hemp. There’s in that context nothing that we can do. No bank will run the risk of having it’s correspondent banking relationship cut off because it goes contrary to the dictates of what the correspondent banks are telling them and so I just have to hope for the sake of the industry and the sake of Belize that — that thing would have exploded in terms of economic activity and bringing in foreign exchange the export of hemp. I have to hope that as the situation evolves that the overseas bank will let up on this insistence that our local banks have nothing to do with hemp accounts but that’s the only hold up. People have their licenses but you have to have a bank account to properly do business as you know and that really is the difficulty.”

Prime Minister says for now the Government’s hands are tied until some further consideration is given to the investments.