By Alexis R. Milan
Belize is one of several countries facing a significant external debt crisis, says a new report by Jubilee Debt Campaign, a United Kingdom-based debt-relief lobby group.
According to Jubilee, countries are defined as being at high risk of a government debt crisis, if they have a net debt higher than 30 percent of the Gross Domestic Product (GDP), a current-account deficit of more than five percent of GDP, and future debt repayments worth more than 10 percent of government revenues.
Belize is listed among 22 countries which currently have high government debt payments, leading to large amounts of money leaving the country each year.
Croatia, Greece, Ireland, Macedonia, Montenegro, Portugal, Spain, Ukraine, Costa Rica, the Dominican Republic, El Salvador, Jamaica, and St. Vincent and the Grenadines, Lebanon and Tunisia complete that list.
Judith Tyson of the Overseas Development Institute Think Tank, warns that a number of countries have “loaded up” on debt, and while some governments have invested the money wisely by diversifying their economies and improving infrastructure, others have not.
She pointed to Ghana in West Africa, where a sharp increase in borrowing has been spent on what she calls “pork-barrel politics”, adding that “they’ve spent it in a frivolous way.”
Similar criticisms have been made against Belize’s government by domestic private interest groups.
In its twice-yearly report on the global economy last month, the World Bank warned that developing countries facing the prospect of being turned off from the flood of cheap money, should be “hoping for the best; preparing for the worst”.
Belize Central Bank’s figures from 2014 put the country’s external debt at $2.25 billion. According to that report, at $153.2 million, debt service payments were $29.4 million higher than the amount paid in 2013. Principal payments remained relatively stable at $79.0 million, while interest payments rose in comparison to 2013, due to the resumption of bi-annual interest payments on the 2038 restructured bond, it said.