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Minister of State in the Ministry of Finance Comments on Bonds

There is several other cases of homicide to report on tonight, but for now we take you to an equally disturbing topic, which is the country’s economic troubles. Tonight, the Government of Belize remains in a financial crisis as the country continues borrowing money to meet salaries, the bondholders are not too eager to approve a fifth restructuring of the superbond, and the foreign reserves are running on fumes. In just ten days a coupon payment for the bondholders will come due; that is seven million US dollars that the Government of Belize will have to allocate if the stalemate is not resolved between the bondholders and the Briceno administration. A ‘stalemate’ that is how one of the bondholders, Dr Carl Ross refers to the current situation. Minister of State in the Ministry of Finance, Christopher Coye, however, says he wouldn’t necessarily call it a stalemate or an impasse.

Carl Ross, Bondholder: As you know from the press release that have gone out that we’re in a bit of stalemate right now. You know I think the bond holders have some request and the government has some requests and you know we’re at a point where we’re trying to figure out a way to move forward.”

Christopher Coye, Minister of State [FINANCE]:
Christopher Coye, Minister of State [FINANCE]:  “I wouldn’t say that there is an impasse or a stalemate . It’s not me talking to Carl Ross there’s a team of advisors that we are guided by and we take the advice from. They have their work that they’re putting in and that involves communicating with and liaising with the credit committee members. So it’s a process as some would say it’s more art than science, it involves engagement it’s not at all that there’s no engagement because there was not a call and there is continuing engagement and there will be continued engagement until there is a resolution that Belize agrees with. It’s a process and we have to expect that it would go beyond May 20th.”

In our exclusive with Dr Ross last Friday, he did indicate that the bondholders are not keen on granting a fifth restructuring of the superbond, unless Belize conforms to an IMF Relief plan. Coye, however, says at this time the government is still hopeful in a home-grown plan, despite agreeing with the bondholders that Belize needs to do better. Coye added that he would agree with Ross that the IMF is not as draconian as it used to be, but there is no guarantee that they would go easy on a small country such as Belize.

Christopher Coye, Minister of State [FINANCE]: “I haven’t spoken with Mr.Ross. I didn’t have that conversation with him and he certainly has as you indicate a view on the history of the Belize experience regarding the superbond but it has been, no doubt has been a period of kicking the can down the road and in this administration we feel that that cannot occur any longer and I think Mr.Ross would agree with that. It is just the mechanism by which we now deal with the problem we have. We believe that our homegrown recovery plan is the best way to deal with it and he believes that the IMF approach is the best way that’s just where the difference of opinion is. Ultimately we agree in many respects what needs to be done. The IMF in their Article IV consultation recognizes that we are aligned with their views in many respects so far as what our plan is and that is where we maintain that we have committed, we have undertaken and we will pursue our efforts at fiscal recovery, debt sustainability and economic recovery according to how we feel the best approach is. I believe that looking at our plan it has more of a conscience if you will than what an IMF approach would involve. There are certainly the comments that have been made that the IMF is not the IMF of the past and I would agree with that to some extent in that they’ve certainly shown more flexibility but if you look at it that more or heightened flexibility has been more with the larger countries than with these small vulnerable countries like Belize.”

With a meeting nowhere in sight for the bondholders and Belize’s negotiating team, indications are that Belize may very well default in its payment due to the bondholders on May 20. Minister Coye would not openly admit whether the country will default, but he did say that something’s gotta give.

Christopher Coye, Minister of State [FINANCE]: “I think they have to expect that this process can go beyond May 20. What I’m saying is if the bond holders find that they would prefer to reach an agreement before May 20 then we wouldn’t have a default.”

Reporter: But at this very point we don’t have US $7 million set aside to make that coupon payment and if you say we don’t have it can we find it by that time ?

Christopher Coye, Minister of State [FINANCE]: “No I think if you look at again the budget book that speaks to the fiscal plan of the government and that lays out what the adjustments that would be made, those adjustments that will be made  those adjustments contemplate restructuring and thus you have reductions in the servicing obligations line item in the budget. So we plan on a debt restructuring and in that regard what is going to be paid ultimately will depend on the outcome of that restructuring process.”