And while the usually accomodationist Prime Minister must respond to his party hardliners, or be damned by it, the truth is, he has more than just pressing domestic matters on his hands right now. Today the Government of Belize issued the most unhappy release of the Musa administration's 8 years in office.
It is the release on debt re-profiling, or as it's called in a lame euphemism, a "debt re-arrangement," and it basically says to Belizeans and the world, that the country can no longer meet its sovereign debt obligations, or to quote the Prime Minister from the release, "servicing the Belizean external public sector debt on its existing terms is no longer a viable option."
Government and its financial advisors Houilhan, Lokey, Howard and Zukin have told its private creditors, mostly bondholders, that the debt burden is officially unsustainable and bow Belize must re-profile US$960 million, nearly BZ$2 billion in debt. In the release, which is written as a distress beacon to our creditors, the Prime Minister is quoted as saying "we must urgently ask the cooperation of our creditors to help put this debt stock on a sustainable financial footing." Consultations with bondholders will begin immediately, and the release says Belize hopes to finish it by the end of 2006.
Of course, it's not as simple as that, and putting on a sad face or a sorry spin won't earn Belize any favor with international institutional investors who stand to lose tens of millions of U.S. dollars and the months ahead will be trying as those creditors are expected to resist mightily and try to force government to pursue other domestic options before it comes crying to the international community. Sounds harsh, but that's what it's most likely going to be as the international investment community not known for debt forgiveness.
