Taiwan $50 million loan is hot topic in House of Representatives
Despite another series of skirmishes between the Speaker and members on the floor over proper standing orders, today’s hot topic in the House of Representatives was definitely the motion of a fifty million dollar loan negotiated by the Musa Administration and the Government of the Republic of China on Taiwan. The Opposition charge a bailout for financial mismanagement and corruption, but today Prime Minister Said Musa cited fluctuating oil prices, erosion in prices for agricultural products on the world market, and oh yeah, “high external debt service commitments.” News Five’s Karla Heusner reports from the National Assembly in Belmopan.
Prime Minister Said Musa
?In the short run, the pressures continue and there is need for financing to support government?s external debt management programme, while the economic adjustment programme takes effect and begins to yield the desired results. In this regard, our friend, the government of the Republic of China, Taiwan, has agreed to increase its level of economic support to Belize and has further agreed to assist us with a rapidly disbursing low-interest, long-term loan in the amount of U.S. twenty-five million dollars. This is in addition to a previous grant commitment from Taiwan in the amount of U.S. fifteen million to be disbursed on a similar time table as this new loan, making a total of U.S. forty million in financing support from the Republic of China, Taiwan, over the next thirteen months.?
Karla Heusner, Reporting
But while the government of Prime Minister Said Musa described Taiwan as a friend in need to Belize, members from the Opposition United Democratic Party had harsh words for both Belmopan and R.O.C.T.
John Saldivar, Area Rep, Cayo South
?Madam Speaker, as the Prime Minister describes the Republic of China as a friend; I don?t know that if under these circumstances I can continue to consider the Republic of China to be a friend. I say this Madam Speaker because I am reminded of when someone in our family is addicted perhaps to crack, or some drug, we are always told, not to give them money or anything that would help for them to further their habit. This government has a habit; this government has a problem with money. It spends what it doesn?t have and it burdens this and future generations with debt, after debt, after debt.?
Patrick Faber, Area Rep, Collet
?There was a similar type loan in August of 1996 Madam Speaker.?
Michael Finnegan, Area Rep, Mesopotamia
?You?re right you know.?
Patrick Faber, Area Rep, Collet
?Which they condemned Madam Speaker. And they condemned us because of our relationship with Taiwan back then. And now it seems that they are closer than ever.?
?The loan that the United Democratic Party government under Manuel Esquivel secured at that time was in order to fix the crisis that was created by the People?s United Party government of 1989-1993. Madam Speaker, they have to take a similar measure now.?
In his address to the House, Leader of the Opposition Dean Barrow maintained that Taiwan is not lending Belize more money for financial belt tightening, but rather to round up regional support.
Dean Barrow
?This government has a problem: no other bilateral lender, no other country in the international community will lend Belize money because it is clear to the international community, it is clear to the world that Belize is no longer creditworthy. And those borrowings that we seek to continue to do are unsustainable because of the fact that our external debt is now almost two and half billion dollars. The only source in the world to which we can possibly turn to get this kind of money is Taiwan.?
?Taiwan has no choice. Because as I say, Madam Speaker, Taiwan is in desperate need of continued diplomatic support and this government in effect is selling its diplomatic support to Taiwan and that is why it is able to get this kind of loan.?
Prime Minister Said Musa
?I can never forget it, the Leader of the Opposition got up, branded Taiwan a pariah state, that we should not have any kind of relations with. Condemned Taiwan in this House, it?s right there on the record. And yet to show the hypocrisy of that side of the House Madam Speaker, when they came back into office in 1993, to use a Belizean expression, they sucked up to Taiwan.?
?When they got that fifty-six million dollars put down to extraordinary receipts, that was great, Taiwan was wonderful, Taiwan was a good friend. But now that Taiwan is helping Belize again with fifty million dollars, because that was a loan, which incidentally the People?s United Party government has been paying back and has paid back, we paid back their loan. Now that Taiwan is helping us with another fifty million dollars to strengthen our reserves and ensure that we can meet our debt obligations, and yes, it?s to pay off the commercial debt which becomes due in 2006, the bonds, we make no secret of that. But that Madam Speaker, we should be grateful to this government, to these people. Instead we?re hearing a lot of sour grapes today, like they bex P.U.P has been able to secure this loan.?
During a break in the proceedings Minister of Home Affairs Ralph Fonseca, the man who negotiated the deal with Taiwan, offered more details of the loan.
Ralph Fonseca
?We are talking about loans coming in, fifteen million dollars in January of next year ?06, or next month, along with five million dollars in grants. So there will be twenty million dollars that will be available in ?06 that will be applied to debt servicing as it relates to our international bonds that we are servicing. Then in ?07, ten million dollars of additional loan comes in to play, which will make a total of twenty-five million, plus another ten million in grants, which will provide another twenty million dollars U.S. to complete the fiscal year and to complete the debt servicing requirement for international bonds.?
?That?s the way we have worked it out, also the technocrats involved in the Ministry of Finance and the Central Bank, and also the technocrats in Taiwan by the way, they understand that we have been hit with many, many things, the hurricanes, four hurricanes in over three years, petroleum prices, the problems with trade, we had some political turmoil in Belize, we have paid a price for all of this. But the real economy of Belize continues to grow, continues to diversify, so we just need to settle down things and in effect pay the bills for the past expenditure that we had to use to plug the holes, whether it was hurricanes or increased oil prices or bad terms of trade, whatever.?
Karla Heusner
?In terms of new initiatives, is the programme for the Southside coming under separate money or is that going to be a part of this of this money? What can you reveal about that at this point??
Ralph Fonseca
?Yes, the Southside project is separate money. Everything has been paid for as it relates to the pre-feasibility, the feasibility study, and the actual design work that was done by Halcrow, so now we have a project and that project has been put in front of many, many bilateral partners and also multilateral partners, and the Ministry of National Development is working with them to try to get a combination of funding to get it going as quick as possible.?
Karla Heusner Reporting for News Five.
Tonight we understand that infrastructural developments in the Southside project includes canals, better drainage and streets, as well as housing, educational and economic opportunities for area residents. In related news from the capital, Monday will be another busy day in the National Assembly as at ten in the morning, there will be a meeting of the Finance and Economic Development Committee on the General Sales Tax bill. Anyone wishing to make a presentation to the committee can do so in person at the meeting or in writing. Then on Monday afternoon at one, the Senate will meet in a special sitting.
