BARROWBOND 3.0 – Hocus-Pocus Economics 101
Sunday, March 12, 2017, 16:47
Wednesday, March 8, 2017
It was like déjà vu all over again as Prime Minister Dean Barrow, the porcine Michael Peyrefitte and a taciturn Mark Espat played national heroes to be adored because they restructured BARROWBOND 2.0 to create BARROWBOND 3.0. Not surprisingly, they were cheered by the usual host of UDP jesters assembled for the joyous event.
What Mr. Barrow has in fact done is what he does so well – malign the PUP while casting the bondholders as villains. He has done the same thing with Lord Ashcroft, his friend of so many years. Barrow continues to blame the PUP for the bond, even though the UDP has been in office for nine years now and has in fact also restructured the bond, besides adding over $1B in debt on the backs of the Belizean people.
Hocus-pocus economics aside, the truth is that all the UDP has done is push back payment – nothing else. The principal debt is still the same as it was before the restructuring. The insignificant savings in interest, $14M over the life of the bond, will evaporate after GOB makes payment of the consent fee, the bondholders representatives and our country’s foreign and local advisors. Mr. Barrow boasts of savings of $600M. does this mean that Belizeans will not have to pay $600M? Absolutely not. THE DEBT REMAINS THE SAME. Only now another Prime Minister and government will have to deal with it, and it is our children who will have to pay. No wonder Mr. Barrow was grinning from ear to ear like a well fed Cheshire cat.
There is no reason to celebrate. What Belizeans need to understand is that the Barrow administration wasted hundreds of millions of dollars in oil money with nothing to show for it. Ask anybody on the street if they benefitted from Belize having oil. None of us normal Belizeans did. The Barrow administration also wasted hundreds of millions in Petrocaribe money, with nothing to show for it. With all that money, Mr. Barrow’s administration has become known as a MALPAGO administration, and they are proud. At the press conference, both Barrow and Peyrefitte boasted that the bondholders were forced to fold because they threatened that if the proposal wasn’t accepted, the government simply would not pay. Try that at your local bank.
Mr. Barrow has been unable to grow the economy. When the PUP left office in 2008 there was a surplus of $90M in the coffers, in addition to $40M of Petrocaribe monies. The UDP will never tell you that. In nine years since 2008, Mr. Barrow has lorded over six years of primary deficits, with the IMF predicting another year of deficit. The country is in recession, industries are in chaos and devaluation is looming. Thanks to Mr. Barrow’s secret agreement with his friend Lord Ashcroft, there is another $200M payment due in the months ahead and the government is completely broke! That is the reality.
So those Belizeans firmly attached to the government bubby can cheer for BARROWBOND 3.0 and the fact that the Barrow administration has indebted another generation to come because of its mismanagement and corruption and arrogance.
We who feel it know it. There are dark days ahead.
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