Thursday, November 22, 2012


IDB hiccups and surrenders INDEPENDENCE to USA TREASURY?

PM On IDB President Moreno; "A Crass Act Of Cowardice"
posted (November 21, 2012)
Superbond 2.0 - it's still in the air and Belize is about to enter what might be called the red zone. That's the expiration of the 60 day grace period that was given when a half the overdue bond payment was made in September. Negotiations with the bondholders are still underway - but the hand that Belize had hoped to play is not as strong as it would have hoped. And that's because the Inter-American Development Bank has pulled its support for a partial guarantee of the restructuring with a policy based loan.
It happened because the US Treasury Department insisted that instead of going to the IDB, the Government of Belize had to first go to the IMF. The government of Belize flatly refused - and the IDB, feeling pressured by the USA, pulled out.
This morning on KREM WUB Prime Minister Dean Barrow called it a "crass act of cowardice" by the IDB President Luis Alberto Moreno. He told us as much after that show:..
Hon. Dean Barrow, Prime Minister
"I had met with Moreno and I understood from then that he was not as committed as his staffers seem to be but I thought that we had been able to persuade him. Ultimately it was that the US Treasury indicated clearly to Moreno and directly that it would not support the IDB agreeing to the guarantee. It then became a matter of us saying to Moreno to take it to the board nonetheless. I understand that the IDB a branch of the US Treasury. Moreno, for his own reasons ultimately did not do that. He called me to say that because of the US Treasury opposition it was off. That's where things stood."
Jules Vasquez
"How would you characterize the conservative decision that he made?"
Hon. Dean Barrow, Prime Minister
"I told him that I thought that it amounted to a failure of nerve on his part. I was very clear; I said that Belize is not disappointed with the decision, it is disgusted and that the responsibility was his and his alone. I am not saying anything behind his back; I have said this to him directly on the phone. He made the ultimate decision and he must bear the ultimate brunt of Belize's ire. I don't know that that will put us anywhere, but it's good to have these things on record and I sure as hell placed it on record - he had I thought the support at his board to push this thing through notwithstanding US Treasury's objection. Even though it is what it is, I am not going to say the bank of Belize will withdraw from the IDB - we have to be mature, it's not in our interest not to continue our relationship with the IDB. Having said what I have said, having made plain that Belize has the dignity and the sovereign courage to speak truth to power, we move on. We can't throw out the baby with bath water although Moreno is no baby. I having placed on record our disgust, I intend to move on. I would be sharing any podium with Moreno anytime soon, but Lord, institutionally the relations can should and will continue."
And so while Belize soldiers on without that guarantee, there is also the matter of what are the called the conditionalities of the policy based loan.
That's a lot of big words for pieces of legislation such as the Banking and Financial Institutions Act and the conversion of the hotel tax into the GST.
Today the PM said the BFIA is going to be slightly adjusted but the change in the hotel tax is going to be scrapped completely:..
Jules Vasquez
"From the part is that we have already done our legislative part of earning a policy base loan from the IDB in terms of re-configuring the hotel tax - you passed the law."
Hon. Dean Barrow, Prime Minister
"We didn't pass that law."
Jules Vasquez
"You present it in the House."
Hon. Dean Barrow, Prime Minister
"Yes but we never pass that law - Ain't going to be done. One of the things we did pass is the BFIA; I can tell you that we are going to look again at that. There is going to be a House meeting on the 30th November, but not in any fundamental way because these were reforms and advances that needed to be made in any event - the hotel tax. The stakeholders were of the view that to switch from the hotel tax to GST would have created a great deal of problems and that the government would not have gotten the kind of revenue that is now to be had which goes to funding the BTB's marketing program and so on - would not have gotten the kind of revenue from the GST that is now being had from the hotel tax. Given that the IDB has worsened us - that's dead, dead, dead."

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