Today in Washington DC, the IMF Board considered and approved Belize's Staff Report for what's called the Article Four Consultation. That they approved it is good news for Belize, but what's in the report shouldn't make anyone sleep better at night.
7NEWS _has obtained a copy of the entire 163 page document, and it makes it clear that, "even in the best of circumstances, Belize's economic and financial situation will remain highly vulnerable." It continues, "the outlook for 2007 and beyond remains a concern (because)...debt service is very high and Belize faces large financing gaps next year and beyond." M ost of this according to the report is because public debt tripled from less than US$400 million in 1998 to US1.1 billion in 2005.
For causes of the debt explosion, the report details what it calls several major governance scandals pointing to lending by the DFC, mortgage securitizations and the Intelco debacle. And the burden of those errors won't pass for a while. The staff report warns that: "large fiscal and balance of payment gaps are projected to emerge from 2007 onward" and there is still "significant risk of financial and currency crises." The report was defended to the IMF by Belize's Executive Director Jonathan Freid.
Despite its dire prognostications government considers approval of the report an endorsement of its homegrown recovery programme.
