Today, ( Wednesday, June 17th. 2020) the Government of Belize issued a press release with a ‘Heading’ that said “Belize Announce Request For Interest Capitalization’ To the holders of Belize’s US Dollar Bonds.
We were not aware of exactly what the term means, and we have a feeling that ‘you’ our readers are also unsure of what that term means, so we did some research in the financial world and this is what it means.
What Is Capitalized Interest? Capitalization is the addition of unpaid interest to the principal balance of your loan. The principal balance of a loan increases when payments are postponed during periods of deferment or forbearance and unpaid interest is capitalized. As a result, more interest may accrue over the life of the loan, the monthly payment amount may be higher, or more payments may be required.
What we can tell you is that basically the letter is asking the holders of Belize’s Bonds to wait a few months for the next payment, due to the financial crisis caused by the COVID-19 Pandemic.
As is stated above in the government’s press release, Belize is due to make a payment on August 20th. That payment would normally be $25 million Belize dollars.
What Does The Request For Interest Capitalization Mean The request to the bond-holders ( ie: investors that purchased Belize’s Bonds) is for the payment of $12.5 million U.S dollars that is due on August 20 should be deferred ; then added to the entire principal balance due, and a payment will be made at a later date, (February 2021), when the country is expected to be in a better financial position.
Additionally, In a separate financial juggling act, on Thursday June 4th. Prime Minister Dean Barrow and the Belize Central Bank presented a 30 million U.S Dollar denominated 5 year Treasury Note to buyers, each Treasury Note has a value of $50 thousand U. S dollars.
The three former importers of LPG (butane), Gas Tomza, Z Gas and BWEL have criticized the National Gas Company Ltd and the Government for the adjustment in the prices of butane in Belize.
In a press release, the group wrote, “The Government of Belize, in response to the increased prices of the monopoly importer of Liquid Petroleum Gas (LPG), has dealt a blow to the Belize consumers,” referring to the adjustment as a 38-cent increase per gallon, which represents a 17% increase, in a matter of just 28 days since the last increase. The group called the adjustment “exploitation of the Belizean consumers by the monopoly importer, NGCL, with connivance and concurrence of the Government of Belize.”
The three companies also reminded that they had warned that the creation of the monopoly would eliminate competition in the industry and would lead to this. Their attorney, Audrey Matura pointed out today that since the national company took over, butane consumers are now paying 69 cents more per gallon.
“This is from a Government that passed a legislation, where the Prime Minister, on the 16th of August, 2019 said, ‘You talk about it being a monopoly. It will have the monopoly in terms of the importation, but that is better than the current situation.’ Let me tell you, at the end of the day, the ‘current situation’ is not worse. Now we have a real monopoly. All competition has been removed. The competition was that there were six companies that were importing. Yes my clients are three of the companies that were large importers combined, but they were separate entities. The Prime Minister knows company law and he knows they are separate. When you look at National Gas Company, it is not a separate entity; it is one entity. What is dangerous is that the Belizean people have missed is that he said it is colour-blind because it has people of the PUP and the UDP. That is dangerous…because they are looking at consolidating the political powers,” Matura said.
The three companies also turned to Belize’s current unemployment rate due to Covid-19 measures and reasoned that people cannot afford to pay more. They also question the quality of the butane being sold.
The former importers call the price adjustments as “unjustified,” pointing out that the National Gas Company has not had a new shipment, and is now applying the new prices to the old shipment imported under the old price regime. They also point to regional neighboring markets which have kept their prices stable since March. This is a point that the Opposition PUP has also raised in also objecting to the adjustment in prices.
“Whenever the price of fuel and associated products go down in the region and around the world, somehow, it never happens in Belize. When questions are asked, Mr. Barrow’s Ministry of Finance concocts wordy, obscure explanations about global factors and acquisition costs, usually with a promise that prices will go down soon,” the PUP stated in a press release of its own.
The PUP went on to also criticize the Government for raising the prices of not only butane, but also of fuel, which incidentally, also had another adjustment this week. The price of Regular went up by 76 cents per gallon. “When prices go down around the world, the price of fuel in Belize, ironically, goes UP. When prices around the world go up by just a few cents, the price of fuel in Belize goes WAY UP,” the PUP release noted.
This Friday’s printed edition of the Reporter will have the full story, with comments from all the parties involved in this matter.
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Written by REPORTER NEWSPAPER – Read the detail article and interviews in this Friday’s REPORTER NEWSPAPER – FB Page
Doing big business in the Caribbean has attracted many international companies that provide large quantities of minerals, building materials and fuels., etc.
Today, June 10th. 2020, a key moment in the history of the Caribbean Union (CARICOM) and an arm of that regional organization’s policy and authority was handed down today by the Caribbean Court of Justice.
In a ruling that bolsters the goals of a CARICOM Union committee known as COTED ( Council for Trade and Economic Development ) the court ruled that COTED is justified in creating tariffs that are levied on (in this case, imported cement that came from a country that is not in the CARICOM Union ).
The following is the entire news article from CARICOM.ORG.
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(Caribbean Court of Justice, CCJ, Port of Spain, Trinidad and Tobago) – In a judgment released Wednesday, the Caribbean Court of Justice (CCJ) upheld the decision of the Council for Trade and Economic Development (COTED) to raise the tariff on “other hydraulic cement” imported into Barbados.
The CCJ declared, however, that the Caribbean Community (CARICOM) and Barbados failed in their respective duties to conduct prior consultation with the importers, Rock Hard Cement Limited (“Rock Hard”). The Court’s decision was given in the original jurisdiction matter of Rock Hard Cement Limited v The State of Barbados and The Caribbean Community and Arawak Cement Company Limited, Intervening  CCJ 2 (OJ).
On June 17, 2019, COTED, the organ of CARICOM responsible for altering or suspending the Common External Tariff (CET), approved the application of Barbados to suspend the CET of 5% on other hydraulic cement in order to replace it with a tariff of 35%. The suspension was authorised for a period of two years and not the five years requested.
Rock Hard imports other hydraulic cement manufactured in Turkey into Barbados. Rock Hard was not consulted or notified before the application to raise the tariff was made or granted although both Barbados and COTED were aware of the impact the COTED decision would likely have had on that company. Rock Hard claimed that the decision to raise the tariff should be annulled because it had a legitimate expectation that Barbados would keep the tariff steady at the CET rate of 5%. The basis of this legitimate expectation was alleged representations made to Rock Hard by Barbadian officials in 2015 when Barbados reduced the tariff from 60%, where it stood in 2015, to the CET rate of 5%.
The Court held that, in order for Rock Hard to succeed in the Court’s Original Jurisdiction, the alleged representations that gave rise to its expectation must have come from CARICOM, but there was no claim or evidence that it was COTED that made the alleged representations to Rock Hard. The Court held that subsequent knowledge by COTED of the alleged representations could not make COTED a party to them as those representations had not been made on COTED’s behalf.
The Court also dismissed Rock Hard’s claims that the COTED decision was arbitrary or irrational. The Court stated that the rationale and justification presented to COTED by Barbados were supported by the factual circumstances and that in any event the grounds on which the request was approved clearly fell within a category which allows COTED a broad discretion and where the scope for the Court’s intervention is narrow.
On the other hand, the Court decided to declare that Barbados and CARICOM had failed to ensure that Rock Hard was consulted before the application for the suspension was approved. Because the consultation required for an application of this type was limited to obtaining information as to the impact of the proposed tariff increase, the Court decided that the effect of the failure to consult did not call for annulment of the decision. The Court expressed dismay that CARICOM had failed to maintain an effective system of consultations at the national and regional level as required by Article 26 of the Revised Treaty of Chaguaramas (RTC). The Court noted that the agreed procedures for the processing of requests to COTED, such as this one made by Barbados, had not yet been formally brought into force. The Court found that this was a weakness in the system.
The Court concluded by stating that it is a matter of Barbadian domestic policy whether that State wished to adopt measures to facilitate the importation of cement produced extra-regionally or encourage locally produced cement manufactured by Arawak Cement Company Limited. The Court emphasised, however, that any such measures and the processes accompanying them must comply with the rule of law.
The judgment was delivered by the full Bench of the CCJ comprising the President, the Honourable Mr. Justice Adrian Saunders and the Honourables Justice Jacob Wit, Justice Winston Anderson, Justice Maureen Rajnauth-Lee, Justice Denys Barrow, Justice Andrew Burgess and Justice Peter Jamadar. Mr. Allan Wood, QC and Ms Symone Mayhew, QC appeared for Rock Hard Cement Limited. Ms Gayle Scott and Mr Jared Richards appeared for the State of Barbados. Dr Corlita Babb-Schaefer and Mr O’Neil Francis appeared for the Caribbean Community and Mr Eamon Courtenay, SC and Mr Raphael Ajodha appeared for Arawak Cement Company Limited.
The full judgment of the Court and a judgment summary are available on the Court’s website at www.ccj.org.
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Compiled by digitalCaribbean.Live – digitalBelize.LIVE: from caricom.org news
This Live-Stream is scheduled to begin at 1pm. Thursday June 11th. > > > > Live-Stream ended 2.30pm > > > View recorded stream below
This livestream is from the Government of Belize and is crossed linked on www.digitalBelize.LIVE as a public service to our website visitors. digitalBelize.LIVE is not affiliated with any political party or the Government of Belize in any manner.
Ask your questions in the comment section during the live stream! Joining us today is Hon. Michael Peyrefitte, Attorney General and Minister of National Security, to discuss the regulations under the new statutory instrument.
On Thursday (June 4th) the prime minister of Belize, Dean Barrow informed the nation that the Central Bank of Belize will present an offering of treasury notes totaling 30 million U.S dollars that will have a maturity of 5 years, and will pay 6.5 percent interest. (The offering has been done In 50 thousand U.S dollar denominations or multiples of)
The most remarkable part of the announcement was that this will be the first time that the Central Bank will do the offering in U.S Dollar denomination. Meaning that those who will purchase the Treasury Notes’ will purchase them in U.S Dollar.
The prime minister said “This will augment the Central Bank’s Official Reserve Position’ which has more than the traditional 3 months of import cover,. ( ie: the supply of foreign reserves to purchase imported goods).
The offering was sudden and with very short notice, but not unusual in the midst of the Corona-virus COVID-19 crisis, where-in, just about all countries are carefully managing their money-flows, and their foreign reserves and seeking to borrow money to offset the spike in unemployment due to the crisis. The Treasury Note offering is another method to borrow money.
How Safe Are Treasury Notes Buying ‘Treasury Notes’ from a country is considered very safe, in some cases even safer than putting your money in a commercial bank, and in very rear cases the interest paid is even better than commercial banks. Because a country’s promise to repay is usually considered safer than most locally owned banks.
The quality or safety grade of a ‘Treasury Note’ is dependent on the stability of the government and the long-term prospects of that country’s economic output.
What Is A Central Bank, and What Does A Central Bank Do A central bank (or reserve bank) manages a state’s currency, money supply, and interest rates. A Central Bank also offers ‘For Sale’ Treasury Notes that are i-o-u’s that pay an interest rate and have a set date for repayment, (referred to as the date that the Treasury Note will Mature)
A Central banks usually oversee the commercial banks of their country. It issues the national currency, the nation’s money. It controls the overall supply of money. In contrast to a commercial bank, a central bank can increase or decrease the amount of money in the nation.
Central banks usually also have supervisory powers. These powers are meant to prevent bank runs, and to stop commercial banks and other financial institutions doing reckless or fraudulent things. The relation between central banks and governments varies from country to country.
The chief executive of a central bank is normally known as the Governor, President or Chairman.
An Attractive Offering The fairly small offering by the Central Bank of Belize is a very cautious and measured amount with a fairly high yield of 6.5%. The amount of $30million US, may be snapped up by a single buyer, and the government may have already arranged or have been suggested-to make the offer by those who can easily buy most of the treasury notes, hence doing it in US denominated currency.
Regional Comparison The largest borrower of money in the world is the United States, which borrows money in very large trances by offering ‘U.S Treasury Notes and U.S Treasury Bonds’, in tens of billions of dollars.
The Financial Technicians The primary financial grading institutions for countries are Moody’s, Fitch and Standard & Poor’s, which are based in the United States. They also grade the quality and publish reports about the Treasury Notes and Bonds offered by countries. For example Guatemala’s Moody’s rating on June 3rd, is ‘BA1’. – Costa Rica’s is currently rated at ‘B2’, Jamaica’s Fitch rating is ‘B+’ and Belize’s Moody’s rating is ‘Caa1’ and similarly Barbados Moody’s rating is at ‘Caa1’. (all June 3 2020 data)
At all Central Banks the daily planning and projection debates are similar to how your family manages its finances, but on a much larger scale, the only difference is that a Central Bank’s actions affects an entire countries economic activity.
Why Such A Small Offering The 30 million US dollar Treasury Note offering is fairly small, but is considered by observers to be a cautious and safe limit, that can be securely guaranteed by the Government of Belize. The author of this article believes that if the government of Belize were to make a much larger offering that would be earmarked for a massive government backed expansion in the agricultural sector, then foreign wealth management firms would be attracted to such an offering because the country still have a lot of land for agricultural development.
Goals of Financial Stability During The COVID-19 Crisis The prime minister also mentioned the “ceaseless creative campaign to tap all available external financial sources“; for inflows of money from the IDB (Inter American Development Bank, The World Bank, Taiwan, and OFID, which is OPEC’s Fund for International Development. All totalling 100 million US dollars” – end quote –
Many people may think that it will take many years for the global economic engine to get back to where it was prior to the COVID19 Pandemic, which, bey-the-way is still going on in many countries in the region.
In the Caribbean and Central America the dependence on tourism has become the Achilles-heel of their economic hardship and high unemployment.
But everyday the stock markets in most countries are open and all of the major industrialized countries in the world are cranking up their economic engine, BECAUSE!, no matter how bad the Corona-virus COVID-19 crisis gets, people have to get back to normal everyday life, there is no other option, and that means going to work and earning a living.
Sink or Swim – The Reality Of Tourism In The Caribbean The tourism and hospitality Industry was a major part of all Caribbean country’s economy, and the governments of those countries have realized that they better do something fast, because there is no ‘sure-thing’ safety net. As independent nations they must navigate the challenges of the pandemic, just like every other country, or watch their economy’s die, and watch their people suffer.
up airports and borders are just the first step in a strategy to
restart your tourism industry, and that does not mean that the
visitors will come, because there are no visitors banging at the
doors of departure airports to travel to tropical destinations in the
Caribbean. But there are strategists and resort owners and hoteliers
and AD-agencies and government health departments that are doing all
sorts of efforts to make their tourism industry swim through the
They are using sophisticated and low-tech methods to focus on the vacationer that made money and are making money during the pandemic, and are surely in need of a vacation.
They have created teams and situation rooms that are strategically facing the challenge like they are going to war. They are developing new policies to make the people who will visit feel very safe. and, They are developing new policies to keep their local population and workers safe.
Some strategist are tracking when each of the destinations in the Caribbean will open to foreign visitors . Here is a list of when various Caribbean island-nation will open their borders (airports & seaports).
Reopen date source: Official local government data – collected June 3rd, 2020 COVID-19 data source: World Health Org. data. – collected June 3rd, 2020
Antigua and Barbuda
June 15 to July 1st
Planned July 1st.
British Virgin Islands (UK)
Phased reopening to residence and other selected people with vested interest in the country
Cayman Islands (UK)
Plan to open its borders to regional travelers on July 1st. or Mid July
Phased re-opening The Dominican Republic has been hit the hardest by COVID 19 of all Caribbean country ‘s
St. Kitts and Nevis
Saint Vincent & Grenadines
Trinidad & Tobago
Phased re-opening & conditional on COVID-19 decline
Turks and Caicos (UK)
One of the leading websites that aggregate tourism data and tourism news in the region is TravelPulse.com, which has seen a huge up-tick in online ADs that focus on mitigating the fear of COVID-19, those AD-Agencies work for big-name resorts and small countries that are trying to attract visitors to those destinations.
In Belize Belize, St. Lucia and St. Vincent is a part of a handful of countries in the Caribbean that have not had any reported new cases of COVID-19 for more than 35 days now. This is supposed to position the country as having a huge advantage to market itself to foreign vacationers who have worked hard during the pandemic, and are now wanting to vacation somewhere safe from COVID-19.
Marketing & Communication Efforts A resort in Cancun (Le Blanc Resorts) has developed a comprehensive housekeeping cleaning routine and made a 5 minute video to ‘specifically‘ mitigate the fears of COVID-19
Prime Minister of Jamaica, Andrew Holness pitched his country as ‘soon opening’ on CNN’s Business Editor at Large, Richard Quest.
Watching The Rest Of The World The BBC’s Travel Show looks at the challenges in the near future. – Coronavirus: Flying in the age of Covid-19? – BBC Travel Show
Update: June 2nd. 2020 This morning at the supreme court in Belmopan former minister Elvin Penner made an appearance before a Judge and explained that because of some urgent personal matters that had arisen, he was unable to be at court on June 1st. as required. Mr Penner stated that he realize the importance of making required court appearances but on this occasion he was unable to be present. The court accepted his explanation and he was free to go.
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Monday, June 1st. 2020
In a stunning fall from grace, former Minister and U.D.P Cabinet member Elvin Penner may be arrested by police, when this morning (June 1st.) the supreme court issued a bench warrant for his detention due to his failure to appear in a Belmopan court to face charges of Manslaughter.
In 2017 Penner was the driver of a vehicle that knocked down and killed Kenrick Myvett on the George Price Highway. (western hwy.)
Penner was the Minister of State in the Ministry of Immigration, and served in the House of Representatives from 2008 to 2015 representing the Cayo North East constituency. He is the first Belizean Mennonite elected to national office.
The ministry of Immigration was tarnished by several scandals and corrupt activities, the worst was the Won Hong Kim passport scandal, in which a jailed criminal in South Korea was claiming Belizean citizenship, which he reportedly acquired after Penner’s intervention or during his oversight of that ministry.
In Belize City Late Sunday Evening and into the wee-hours of Monday morning we kept track of how the rain fell non-stop for hours. Knowing that many of the low-lying streets and neighborhoods in the city and rural communities will be flooded, some as high as 1-2 feet.
As the saying goes, a little bit of rain is always good, but this was coming down by the bucket load, the ‘Belize National Met Service’ said that this weather will continue for another day and then some sunshine on tuesday, then more heavy rains.
At mid-day the Gov. of Belize issued the following FLOOD WATCH ALERT – – – go here for the PDF version – – –
In Neighboring Countries, AFP Reported that “Tropical Storm Amanda, the first named storm of the season in the Pacific, killed 10 people as it lashed El Salvador and Guatemala on Sunday amid flooding and power outages. El Salvador’s President Nayib Bukele declared a state of emergency for 15 days to cope with the effects of the storm, which lost strength later in the day as it moved into Guatemala. The fatalities were all recorded in El Salvador, senior cabinet official Carolina Recinos said, adding that one person is reported missing. In the capital, San Salvador, 50 homes were damaged by rain and powerful winds, while 23 vehicles were swallowed by a sinkhole, Mayor Ernesto Muyshondt said. “We are experiencing an unprecedented situation: one top-level emergency on top of another serious one,” he said, referring to the COVID-19 pandemic in place before the rain hit.”
The official start of the 2020 hurricane season is June 1st. to November 30th.. But there has already been two named storms., Arthur on May 16th. and tropical storm Bertha on May 27th.
The latest word from the Belize National Meteorological Service (BNMS) is that “hurricanes and cyclones may form outside the official hurricane season”.
There is also a FLOOD ALERT for this weekend, due to a tropical wave that is approaching Central America. The digitalBelize.LIVE weekend audio report was made at 7pm Friday May 29th. from the Belize National Met Service.
Today (May 29th.) a list of the new names for the season was released by BNMS
The National Met Service said, via a press release “The 2020 forecast is suggesting that tropical cyclone activity will be above normal in the Atlantic Basin (North Atlantic Ocean, Caribbean Sea and the Gulf of Mexico). The prediction is for there to be thirteen to nineteen (13 to 19) named storms, of those six to ten (6 to 10) are expected to become hurricanes and three to six (3 to 6) are expected to become major hurricanes (Category 3 or stronger).
An average season in the Atlantic Basin consists of twelve (12) named storms, six (6) hurricanes and two (2) major hurricanes. The main factors that were used to forecast an active 2020 Atlantic hurricane season are:
What Does this Mean for Belize? There is no strong correlation between the number of storms or hurricanes that form in any given season to the number of storms that make landfall in Belize. One or more of the 13 to 19 named storms forecast to develop this season could hit the country, or none at all. Therefore history teaches us, as a nation located in such a vulnerable area, we should be prepared each year no matter what is the forecast is. – end quote –