Belize
- Total external debt: $1 billion
- Total external debt payments: Belize gives $228 million each year to the rich world in debt payments.
- Population: 291,800
- Percentage of adults who can read and write: 75.1%
- Average life expectancy: 75.9 years
- HIV prevalence: 2.5%
- Total health spending: 2.7% of GDP (2003)
- Total spending on debt service payments: 20.7% of GDP
- Annual GDP: $1.1 billion
(Statistics from World Bank, 2005, and UN Human Development Report, 2005)
DROP THE DEBT FAST
Belize is the focus of the Drop the Debt Fast on Wednesday 16 April.
Background
Belize has more in common with nearby Caribbean countries than its Central American neighbours, in terms of culture and languages – the two major languages being English and Creole. However, as a result of slavery and colonialism as well as immigration, Belize has a very mixed population, including Spanish-speaking Mestizos, who are of mixed Maya Indian and European ancestry, Creoles, who speak a Creole dialect of English and who are often of African and African-European extraction, and Garifuna, who are the descendants of Carib indigenous people and Africans. In common with many Caribbean economies, the service sector has overtaken agriculture, fishing and forestry. Tourism is a major source of foreign currency.
Political History
Belize, formerly known as British Honduras, was the UK's last colony on the American mainland. Its independence was delayed until 1981 by long-running tension with neighbouring Guatemala, which claims a large portion of its territory. Guatemala recognised Belize's independence in 1991, but the neighbours have yet to settle their border dispute, which is rooted in colonial times. The opposition United Democratic Party (UDP) led by Dean Barrow, won general elections in February 2008, taking over from the government of Said Musa, which had been power for ten years. Barrow has promised measures to tackle corruption, after Musa’s regime was rocked by a series of embezzlement scandals, ballooning public debt and tax hikes that sparked riots in 2005.
Where has the debt come from?
Belize suffered a huge increase in debt between 1998 and 2002 following devastation from four major hurricanes. The cost of rebuilding during and after these storms, as well as a certain amount of fiscal mismanagement resulted in a huge increase in Belize’s debt. In February 2007, the government restructured nearly all of its public external commercial debt, which helped to reduce interest payments and create some liquidity relief. However, the large trade deficit and foreign debt continue to be of major concern. Poverty reduction is also a priority: Belize has the highest unemployment rate in Central America at 9.4%. The population living in poverty is at 33.5% (World Bank).
Debt cancellation status
Belize is officially classed as an upper middle-income country by the World Bank. It is therefore not eligible for highly concessionary assistance from IDA, the part of the World Bank that lends to the poorest countries, and so does not qualify for the Heavily Indebted Poor Countries initiative or the Multilateral Debt Relief Initiative. Nor is it eligible for additional debt relief from the UK or other bilateral donors. This is regardless of the size of its external debt in comparison to the value of exports, its domestic debt or what Belize needs to spend on tackling poverty.
The New Economics Foundation calculates that Belize requires 75% debt cancellation in order for the government to meet the basic needs of its citizens, such as health, education and infrastructure, without taxing those living below an ethical poverty line of $3 a day.
Sources:
World Bank Country Brief, CIA World Factbook, BBC Country Profile,
Euromoney
Last updated: April 2008
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