It never gets old to compare the debt which has been accumulated both by the past PUP administrations and the current UDP administrations.
In his budget presentation the Prime Minister disclosed as much stating that, “at the end of 2015 the external public debt stood at $2.352 billion or 66 percent of estimated GDP, while Government’s total domestic obligations were $0.494 billion or 13 percent of estimated GDP. Total public debt, then, external and domestic, stood at 79 percent of GDP.”
He continued explaining that interest payments were met covering $92.7 million, being 10 percent of projected recurrent revenue. He added that $86 million of existing debt was retired through principal repayments. This year he said, “servicing the public debt is projected to cost $100.0 million or about 10 cents of every dollar in recurrent revenue collected by Government.” That is in comparison to 17 cents of every recurrent dollar which went to debt servicing under the last year of the PUP administration. Comparatively it is 40% less in payments. Additionally the public debt as a percentage of GDP has shrunk by 15 percent, from 92 percent of GDP in 2008, to 79 percent today.
And it would not be a comparison if it were not noted that the borrowing that is currently taking place is in stark contrast to what used to take place under the PUP. The PM noted as follows, “for the record, because this administration has refused to borrow on costly, commercial terms, half of the non-Superbond external public debt is now held by two of our most concessionary lenders: PetroCaribe and the Republic of China on Taiwan. Astonishingly, the aggregate interest rate on the entire stock of public debt for the new fiscal year is about 3.3 percent. Of course, against that average is the singular, exceptionally painful standout of the Superbond. Despite our administration’s successful restructuring exercise, so horrendous were the original PUP terms that the monstrosity will still cost the Belizean taxpayer $52.6 million this year in interest alone.”
When compared to what the PetroCaribe program is costing it is a night and day comparison. This year he said that “the amount set aside in the upcoming budget for the servicing of this debt is in the region of $10.5 million.” It is notable and the PM pointed out that, “the current public debt stock includes all compensation-related payments made during this budget year to the former owners of BEL and BTL. That is, the full settlement of US$35 million to Fortis, the partial settlement of US$32.5 million to the former owners of BTL and the US$48.5m to the British Caribbean Bank. Conservatively, the stakes in BEL and BTL, now held by Government on behalf of the Belizean people, carry a book value in excess of $315 million or some 9 percent of GDP. This, if set against the total value of the public debt, would reduce this key ratio to just under 70 percent of GDP.”
Taken soberly, it is quite clear that PUP debt and UDP debt are not the same. One is about greed and hustles and nothing to show for the payments and the other is about development and people centered progress.