How Will B.T.L. Arbitration Affect Belize’s Currency Position?

There were differing views on whether the Government can adhere to paying the remaining portion of the award due to Dunkeld in U.S. dollars, and should have paid the first instalment in Greenbacks. As we previously reported, the Central Bank’s Governor, Glenford Ysaguirre, wrote Financial Secretary Joseph Waight on July twenty-second, reporting that, “The Dunkeld and Trust requirements would take the demand up to U.S. two hundred and sixty-three million. A recent increase in net outflows has caused the gross official reserves to shrink from U.S. five hundred and thirty-four point seven million one year ago, to U.S. four hundred and twenty-two million today. To address the demands above, along with the additional demands of Dunkeld and the Trust, would immediately push the reserves to crisis levels.” He added that such a move would be destructive for the economy of Belize. Even as Denys Barrow told us it was a question of priorities, Dunkeld and its attorney Eamon Courtenay are not exactly in a mood to be forgiving.

Eamon Courtenay

Eamon Courtenay, Attorney for Dunkeld International Investments

“The letter from the Governor of the Central Bank sets out certain payments that he says that the Central Bank has decided that they are going to pay in priority to my client’s amounts that they are going to get. Now the amounts that he spoke about included repatriation of profits for some multinational, monies to be paid to some bank in Belize, and that sort of thing. Let us not forget what we are talking about: compensation for the acquisition of property, a constitutional right. And if you were in court, I think you would have heard the presiding judge strongly intimate, what does that have to do with anything? When he referred to the letter from the Governor of the Central Bank, he said it sounds to him like a tenant saying to his landlord, ‘I owe you the month’s rent but I cannot pay’ – what is the point of that? In other words, the Government cannot bind itself to an agreement to pay in U.S. dollars and when the time comes simply say, ‘We are going to pay other debts.’ This is a charge on the Consolidated Revenue Fund; it has priority, and I am confident that the Court is going to order the Government to pay the amount in U.S. dollars.”

Denys Barrow

Denys Barrow, Attorney for Government of Belize

“These priorities are dictated or decided upon by the Government of Belize; they are decided upon by the Central Bank of Belize. I think the Governor makes the point that at this point last year, our foreign reserves at this stage were at five hundred million; this year the foreign reserves are at four hundred million – this is before Hurricane Earl. So when people can’t get foreign exchange at the bank, the pressure is upon the entire domestic economy, upon the entire banking system, to produce foreign exchange. The Governor has to make a decision on what U.S. dollar amounts it will allow to be paid, in priority to what.”

Courtenay said that his client would look at any proposal that the Government makes for settling this aspect of the award. Barrow meanwhile stated that Government has never shirked from paying any aspect of the award, subject to the financial crunch that the country is currently in.