By Alexis R. Milan
Belize is placed at fourth on a list of seven countries currently nearing bankruptcy and economic collapse, according to a list compiled by on-line financial advisers 24/7 WallStreet.
On the list, Belize is topped only by Venezuela at third, Greece at second and Ukraine at first – all countries in dire financial situations.
Moody’s Investors’ Service rates the seven at Caa1, several tiers lower than Ba1, which still carries a significant credit risk.
These countries are approaching or have narrowly escaped bankruptcy, the report said. Ukraine is rated Ca, which is currently the lowest credit rating of any country reviewed by Moody’s.
All seven national economies instill relatively little confidence among investors, the report said. However, Jamaica’s credit rating was upgraded by Moody’s this year, and Argentina’s and Belize’s credit ratings remained stable. The remaining four countries, on the other hand, were downgraded.
Belize is rated at Caa2, with government debt totaling 75.7 percent of the country’s Gross Domestic Product (GDP).
In August 2012, the country’s Central Bank announced that it would not be able to make a $23 million bond payment. Due to concerns surrounding the impending debt restructuring, Moody’s downgraded the country’s government bond rating to Caa1 from B3 in early 2012.
It was later downgraded further to Ca, only to be upgraded back to Caa2 in April 2013, after terms of the debt restructuring were agreed upon. Belize’s Credit rating has remained stable at Caa2 since April 2013.
Several institutions have published reports in the past few months, placing Belize on the brink as it relates to financial sustainability. Still, the Prime Minister, who has been asked about the ratings on several occasions, hasn’t expressed too much concern over the reports, saying the government has it all under control.
Jamaica, Argentina and Belarus round out the list at fifth, sixth and seventh respectively. Puerto Rico defaulted on its $58 million debt repayment this week for the first time in its history. With its failure to repay creditors, the commonwealth joins the ranks of countries and governments burdened by crippling debt levels and extremely low credit ratings.