The IMF’s nod on Belize’s home-grown economic plan is an interesting turn of events, considering that the bondholders have been strongly recommending that the country signs onto the IMF economic recovery plan. The bondholders have been saying that the fifth restructuring of the Superbond would be facilitated easier with the IMF involved. According to Dr Guajardo the bondholders share the same concern as the IMF as it relates to the government’s commitment in sticking to the plan.
Dr. Jamie Guajardo, IMF: The bondholders they did have – I mean not a specific request but they would prefer that Belize have requested an IMF program. In that we agree and we also agree that the authority’s recovery plan and IMF program I don’t think they would be very different in terms of the content of the two of them. I think the major concern from the part of the bond holders is wether the plans that the authorities have now are going to finally be implemented or not. And for that probably what is needed is a bit of time to see progress in these measures actually yielding the type of savings that they’re supposed to yield. And I think the reason why they were asking the authorities to request an IMF program is because they feel in that case it wold be higher chance that the measures actually get implemented. I mean think of the measures that the government is planning to implement they are very difficult measures, they are challenging measures. There will be political pressures, there will be maybe discontent from the public from people being affected by these measures so in every country that goes through a process like this these measures are not easy to implement and many times they fall short of what they were announcing in the beginning. My impression is that the authorities are fully committed to this plan and they’re gonna go ahead and implement it in the way they’ve announced it.”
Dr Guajardo went on to say that the challenges that Belize is facing with bondholders is not unique as negotiations such as this are never easy.
Dr. Jamie Guajardo, IMF: “The negotiation for the restructuring with the creditors they’re usually difficult. I mean any debt restriction is difficult. Belize has one advantage that is that they’ve gone through this process a few times already in the last few years with these creditors so that should make the process a bit smoother than in other countries. And we really hope that both parties can get together and work on an agreement and an agreement that can work for both sides. And I think my understanding is, I haven’t seen the bulk of the consent solicitation that was due last Friday but I did see the press communique from the representative of the main bond holders that they will supporting the consent solicitation extending the grace period of the last coupon payment I think that’s a good signal that both parties see the possibility of reaching an agreement in time to provide Belize some debt relief that will be helpful in the objective of restoring debt sustainability. So in a way I think the government has been effective in communicating to the creditors that they’re serious about their plans of consolidation and they also need the creditors to do their share on helping them with some debt relief in this strategy.”