Editorial

Editorial

Twelve years ago, in 2005 the then Prime Minister of Belize entered into a secret accommodation agreement with the owners of Belize Telemedia Limited.

The Musa Government agreed to give the Ashcroft company a cast-iron guarantee that if the company did not make a 15 percent net profit on its operation in Belize each year, the government of Belize would make good the shortfall by deducting the shortfall from the taxes due to it .
The guarantee the Musa Government agreed to give was unlike anything ever seen in Belize before. It said that the government would honour the BTL claim by paying 17 percent annual interest compounded at the end of each month.

When in 2009 the Barrow Government moved to acquire the assets of BTL, the Ashcroft group put in a claim for the guaranteed profits it had failed to make. The claim was made by Belize Social Development Limited, a management group, which declared that from 2005 when it took over the company to 2009, when the government acquired it, BTL had missed its 15 percent target by US 50 million.

Belize Social Development Limited began to insist that the Government of Belize compensate it by paying the accumulated amount of US $50 million at the agreed-upon 17 percent interest compounded over the four year period. The amount being demanded amounted to US $117 million.
This is the amount the Barrow government is refusing to pay.

The Caribbean Court of Justice has ruled that the Accomodation Agreement which Mr. Ashcroft cooked up in secret with Prime Minister Said Musa, is illegal. The Government of Belize is not bound by it. But a US court has ruled that this is a legitimate charge which the Government of Belize must pay!

The US Court which gave BSDL its favourable ruling has no jurisdiction in Belize, but it can and will cause problems for Belize in the future.
Even if the U.S. Court cannot seize any of the Central Bank of Belize assets, it can make life difficult for the Government of Belize with a threat of that magnitude hanging over its head, because the debt is growing faster than Belize can ever hope to pay.

Generally speaking, large sums of money bear a lower interest than smaller sums. Fifty million @ 3 percent simple interest might be considered normal. But $50 million @17 percent interest is usurous! Fifty million compounded @ 17 percent is malevolent and oppressive and a foul form of bondage.

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