20 JAN
2013
THE BELIZE TIMES
Junk Bonds & Barrow’s “mishmash”
The Prime Minister’s option: if you need help, call a friend – call Kenneth Belize City, January 5, 2012 It was not too long ago in the history of the government’s debt that Prime Minister Dean Barrow was shouting from his Opposition pulpit that the then government had defaulted on its debt obligation and was doing some fancy foot-work to soften the government’s external debt obligations. It now appears that Barrow has not learned the Ali shuffle or perhaps he is being weighed down by his humongous ego. Shouting like a Doomsday harbinger, Barrow seems to have appointed himself as a Saint. It was a self-ordination just in time for the general elections. These elections were slated for within the next twelve months from February of 2007. He was beginning to imagine all sort of possibilities (his Party’s Campaign slogan for the elections) and was posturing with all sorts of panaceas to fix the country’s ills, real or imagined. By now it appears all were imagined. He is still looking at the mirrors five years after he took office. Before supporting the previous PUP government’s debt restructuring efforts, which was simply a formula to restructure, or if you will, consolidate, Belize’s external debt, he preached to his Choir: “Belize”, he said at the time, “is the only country in the Caribbean which has found itself in this financial mishmash in which it has not been able to meet its debt obligation”. But Barrow, as the then Leader of the Opposition, was stopped in his tracks for lying by no other than his future lover and mistress in politics, Mark Espat (Judas is his PUP moniker) who was the lead negotiator for the PUP government in the restructuring of the government’s debt. Or, was he, in reality? He told Barrow in a debate in the legislature on the consolidation of the debt that his bark was louder than his bite. “Judas” then explained to the then Leader of the Opposition, that on a personal basis “You can’t ask the Bank or the Credit Union to lend you money or to accept a delay in your monthly payments if you are squandering your money. You can’t be partying out the money and then tell the creditors that you can’t pay them”. Is he now giving his new boss, Barrow and the UDP, that same advice? It was only a few weeks before the general elections in February of
this year that he was bought by them pieces of silver. His defection was a betrayal to a Party that propelled his political career and fortunes. It was also a ruthless move against a man, PUP Leader and Prime Minister, Said Musa, who had brought him up from a hotel clerk, mentored his political career and elevated his status. We can only hope that if he fails to re-negotiate the “Super Bond” debt repayment schedule that he will not follow the route of his biblical namesake, Judas. But for a man who likes to appear to be squeaky clean, he received a “Consultation Fee” of reportedly $1.5 million paid to his company Hallmark Consultancy for his betrayal of the party that gave him a career. He was, as a result, assigned by Barrow to head a team to attempt to re-negotiate this Super Bond with the bond holders - almost five years after. So far they have come up empty handed, despite the make-up of the team which includes “Sabe Lo Todo”(a person who knows everything about everything) the Minister of Immigration, Labour and National Emergency, Godwin Hulse and the endomorph Minister of National Security (who claims to be an Economist) John Saldivar. One of their problems, it must be conceded, is that their boss seems to think that he is a heavy lifter. At this stage (and while we are hoping that a debt restructuring will be achieved) it seems very unlikely in view of the Prime Minister’s lack of humility, the rampant corruption and greed in his government and its orchestrated policy of keeping people poor and dependent for political reasons if not simply incompetence. The other gambit that back-fired is that the government did a buffet selection of a recent IMF Report and publicized it for local consumption. The IMF Report said that the economy was recovering and that there was some growth, although not substantial. The bondholders as a result argued that the government has the money to meet its debt. In reality the national economy is collapsing. For in parallel with any growth there is blatant corruption and lavish consumption by the government ministers. Poverty is on exhibition everywhere we turn. The social fabric is disintegrating and the numbers of crime-ridden havens have escalated and have become extremely dangerous. Ironically,
these are in constituencies such as the PM’s, which is one of the high crime and poverty-ridden areas of the country. It is symptomatic of the state of affairs in the rest of Belize City and the country where poverty and social decay are becoming more and more rampant. The government’s decision, when it came to office to put criminals on their payroll for political purposes and for harassment of non-supporters was unsustainable. This has been discontinued, they say, but there are reasons to be skeptical. Barrow has now placed Belize in an international mishmash and in a club that includes Liberia which was driven to economic ruin in 2002 by its then President Charles Taylor who now sits in a British prison for war crimes. This nation was drowning in a foreign debt of U.S. $3 billion to international banks and government. The Republic of the Congo has a foreign debt of $5 billion and in Argentina the government defaulted on $81 billion in foreign debt. This has led to the collapse of the middle class in that country. If Barrow chooses to default on Belize’s external debt, this will not bode well for the future of Belize. He also owes the former owners of the national telephone and electricity companies for taking away these companies. It is unlikely then, that given these scenarios, there will be any significant investments in the near future. It is no wonder that recently there was a massive rush by young Belizeans to take-up Canada’s invitation to live and work in Canada. Once the exodus of those seeking a better opportunity starts, it is more than likely to continue. But there are alternatives that Barrow and his advisor who defected from the PUP may be desperate enough to consider. The Prime Minister is obviously prepared to gamble with the country’s sovereignty by asking the people of Belize to consider taking Guatemala’s claim to Belize to the International Court of Justice. This is a big gamble. By the same token, it is surprising the PM has not gambled our sovereignty and national debt to international bond holders by making a deal with Vulture Capitalists who are usually allied to Hedge fund firms. A few names come to mind: Jay Newman who is a key figure in this unique field of finance. Dealing in obscure foreign debt is one of them. There is another, who is even conve-
19 niently located in the Caribbean. He is a very good friend of the Prime Minister. He is Mr. Kenneth Dart. He has built himself a highly specialized investment scheme for vulture funds. Basically these are loan sharks who may be interested in doing business with failed leaders like Barrow. The catch is that they may be as arrogant and greedy and bombastic as he is and like loan sharks they tend to own you until you pay your debt. Barrow knows Mr. Dart very well. In 1994 Mr. Dart and his brother moved to Belize and the Cayman Islands and renounced their U.S citizenship. They did this to avoid paying taxes. He then acquired dual citizenship in Belize and Ireland. He then paid Belize to appoint him as their ambassador to the United States. Barrow was Belize’s Foreign Minister at the time. So if Barrow needs to call a friend or a lifeline, Ken is there. In the case of Argentina’s massive foreign debt, this vulture capitalist, Mr. Dart, bought that country’s sovereign debt for 20 cents on the dollar then forced Argentina to pay him about $20 for every man, woman and child in the country. He did the same in other countries like Brazil and Turkey - even Russia. Barrow’s arrogance and incompetence have taken Belize backward from being classified as a middle class country ten years ago to now becoming a beggar nation. The daily radio and television news confirms this sad state of affairs every day. Belize’s future is dismal. When will the tolerance of Belizeans expire?
In Memoriam
In loving and enduring memory of Wayne William Wagner, my beloved son, who departed this life two unhappy years ago on Christmas Eve. May God look mercifully and kindly on his soul, and grant him peace, love and everlasting happiness in His kingdom. Lovingly remembered and always in my heart (Love you son) Marie Wagner