The IMF is on the ground. A team led by Bernhard Fritz Krackow, the IMF's Belize mission chief met with Cabinet's public finance committee and its technical team of senior public servants yesterday at the Central Bank building in Belize City. Belize's team was led by the Prime Minister and Minister of Finance Said Musa.
Details of the meeting have not been publicized, but with the help of technicians, Government's side is believed to have outlined Belize's fiscal consolidation and debt stabilization program with some attention given to the present problem, which is a recurrent deficit. Traditionally, in such a situation, the IMF has been known to recommend a structural adjustment program, which goes deeper than just cost cutting. But throughout, Belize's political and technical leaders have resisted that solution and opted instead for what's called a "homegrown solution" and they are believed to have re-stated that at yesterday's meeting.
In prior Washington meetings, Belize's team asked the IMF for technical assistance with debt management, financial market advice and restructuring of the moribund DFC. Despite that request, as we reported on Friday, Belize turned down that financial market advice when it came to the US$100 million Royal Merchant Bond. Fritz-Krackow advised Belize "the characteristics of this bond do not seem particularly advantageous" and warned that the country could save US$1.3 million in upfront fees, and US$2 million in annual interest payments if Belize were to be afforded rates given to a country of a comparable credit rating. And what's the cost of refusing that advice? Well, it's a cool US$22 million.
Still, undeterred, the IMF team is scheduled to hold meetings with an array of private, public and political leaders over the next two weeks to come up with a set of recommendations.