A week ago, we told you how the Caribbean Court of Justice ordered the Barrow Administration to pay just over 78 million US dollars to the Ashcroft Alliance. That's after the Government lost the final legal battle over the settlement for BTL.
The Government has until Friday November 10th to pay, or interest at a very costly rate will start accruing.
But, for a cash-strapped government, coming up with that kind of hard currency isn't easy, since it immediately wipes out a quarter of the Foreign Reserves.
When we caught up with Financial Secretary Joseph Waight at an event today, we asked him if Belize will be able to make the deadline in about 72 hours. He said they'll manage:
Joseph Waight - Financial Secretary
"It has not been made. The order from the Caribbean Court of Justice was that the payment should be made on or before Friday, the 10th, and it will be made on or before Friday, the 10th. It will not be made today, possibly tomorrow."
Daniel Ortiz, reporter
"We're told that this wipes out about a quarter of the country's foreign reserves, representing about 3 months of exports. How does this affect the country, and how will be built back up?"
Joseph Waight
"It will not wipe out - it will reduce the reserves by about 20-25%. Remaining after that, will be about 3 months of import cover, which is fairly comfortable. Reserves are built over time, generally from surpluses between your exports and your imports. It will take time to rebuild, but it is in a positive direction because the balance of payments is largely in equilibrium, some months you're in, some months you're out. But, it's largely over a period of time, the current account, or the balance of payments, as it is called, your trade account is largely positive, and that over time - it will take some -and we hope that production remains, and prices remain. We have no natural disasters, but we don't use the reserves for day to day financing our trade activity. The reserves ...are just that, reserves."
Daniel Ortiz
"Will the country feel any kind of effects for this 78 US million-dollar payment that is due by Friday?"
Joseph Waight
"I am not sure what you mean by effects. Certainly, the balance remaining in the bank will be lower by 78 million dollars, but that will not create any shortages, or pressure on importers wanting to purchase foreign exchange for the imports because the system is largely in equilibrium, and they get that from their commercial banks in any event, not from the Central Bank."
Daniel Ortiz
"How long will it take for the country to generate savings that that 78 million US dollars is replenished?"
Joseph Waight
"That's a difficult question because it all depends on the level of your exports, how well your tourism is doing. Hopefully, you will not have any natural disasters. It depends on the price of oil on the world market, because those are our big imports, machinery, and things. It's a little difficult, I would figure about 2 years."
If the Government does not meet the payment deadline, the 8.34% compounded interest kicks in, but as you heard, the Financial Secretary insisted that the Government would make the payment by tomorrow or Friday the latest. We'll keep watching.
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