PM Briceño: “We are on the brink of debt distress”

Prime Minister John Briceño

We are on the brink of debt distress”. That is what Prime Minister John Briceño told SICA member countries and the Secretary-General of the United Nations on Monday during a virtual conference. Members of the Central American Integration System advocated before the UN to access the Green Climate Funds. Member countries also requested support for the reconstruction process in the region, after the damage caused by the storms Eta and Iota, and efforts to continue the battle with the COVID-19 pandemic. Prime Minister Briceño pointed out that the U.N. needs to take into account the needs of the Central American countries on the issues of climate change, migration and health. Briceño painted a grim picture of the economic conditions in Belize, saying that overall debt to G.D.P. has skyrocketed to one hundred and thirty-three percent.

Prime Minister John Briceño

“Belize’s real GDP contracted by twenty-three point three percent in the second quarter of 2020 resulting in a fourteen point seven decline for the first half of the year. Fiscal balance deteriorated as the government’s response to the health crisis led to a sharp decline in revenue and in an extraordinary rise in spending on health and social protection measures to mitigate the damage of the pandemic. For the first half of 2020 government revenues and grants contracted by nineteen pint two percent while expenditures expanded. The deficit was financed largely from domestic sources and therefore government’s domestic debt grew. Overall debt to GDP has increased dramatically from nineteen point nine percent at the beginning of the COVID-19 pandemic to a hundred and thirty and thirty two percent today. Falls in export revenues, remittances and foreign direct investments declined or they have pushed our economies to their limits. In order words, we have sacrificed our economy to survive the pandemic at the expense of development and climate ambition. We do not have the resources to invest in large, sustained stimulus programs to underwrite our recovery. Quite the opposite we are on the brink of debt distress. We are facing the real risk of the reversal of development gains. What do we need from the UN? It is critical that a global response is fashioned that addressed the particular needs of countries like Belize. Secretary General we urge you to strongly advocate for responses that take into effective account the needs of the countries of Central American given our vulnerabilities to climate change and natural disasters in the context of the socio-economic challenges that we already face including citizen security, income equality and migration.”