BELMOPAN – The President of the Belize Chamber of Commerce and Industry, Nikita Usher, is urging the government to re-think its position regarding a recent ruling by the Trinidad-based Caribbean Court of Justice (CCJ) for the Belize government to honour a multi-million dollar international arbitration award.
Usher, speaking on television here on Friday night said that “a no vote by Parliament” could have repercussions the country.
“It then means that you then start to question investment climate; you start to question risk premiums. What is risk premium and who deals with risk premiums? Should you go on the international financial market to borrow money, there’s a risk premium involved; your interest is interest plus risk premium. “When you have a government or a country that has not paid its debt the risk premium tends to be a little higher and so the borrowing rate becomes a higher rate. So again the business community will pay that price,” he said.
Prime Minister Dean Barrow Wednesday said government legislators would be afforded a “conscience” vote in Parliament for approving funds to satisfy the CCJ ruling.
The CCJ, earlier this month granted permission to the Belize Bank Limited (BBL) to enforce the arbitration award totalling more than BZ$36 million against the government dating back to 2013.
The arbitration award was made by a Tribunal of the London Court of International Arbitration and required the Belize government to pay the BBL BZ$36,8 million with interest at 17 per cent and arbitration costs of £536 817.71.
Last Wednesday, the CCJ also awarded the BBL legal costs in the CCJ and Belize’s Court of Appeal and Supreme Court hearings.
In 2004, the Belize government guaranteed a loan from the BBL to a private company, Universal Health Services (UHS), after the original guarantor, the Development Finance Corporation, a statutory body, fell into financial difficulty.
In 2007, the parties entered into an arrangement to settle the sums owed under the guarantee. However, no prior parliamentary approval was obtained before that arrangement was made.
But Barrow, speaking at a news conference here, hinted at the possibility of the country not meeting the ruling of the CCJ, which is the country’s highest court. He said while a court may advise, what it cannot do “is to compel Parliament to vote in any particular manner”.
He told reporters that it is his thesis, “My case to you today . . . (is) that there are compelling reasons, why our Parliament when this matter comes to a vote might or might not go a certain way . . . . It is not for me to say.
“As long as Parliament does not vote the money it cannot be paid,” he said, hinting that payment could probably come if a new government with the necessary constitutional majority rule is able to change the constitution “because it is the constitution that says you can’t take money out of that Consolidated fund . . . unless Parliament votes it.”
However, Usher, said that from the Chamber’s point of view, “what is most important for us right now, is how do we fix our Constitution, our laws, to not have such a situation re-occur. “Let’s come to the table and discuss fixing the loopholes that exist in the current Constitution and laws.
“The Chamber doesn’t have any say over whether taxes are raised; that’s the Government’s prerogative. What we are saying to you, let us come to the table and discuss how do we close the loopholes and that will give you the tax revenues to settle most of the debts you want to look at as opposed to increasing taxes. Increasing taxes does not always give you more revenue; instead people find ways to try and evade.”
Usher said the private sector’s position has always been that the “rule of law be maintained.
“ . . . if in one breath you are saying that the CCJ is your final court, in which you honoured the B.T.L. payment in US [dollars] versus Belize [dollars], but in this note you are saying you are not going to honour it if you get a no vote, one has to ask why then is the CCJ your final court?
“But going aside from that, what we want as the Chamber for the general public to understand: that even if there is a no vote at the parliament, ninety million will not be erased as a liability for Belize; ninety million remains a bill owing; ninety million continues to grow by the day with interest.
“So when the Prime Minister is saying if the parliament votes no it will not be paid, all we are really and truly doing is to kick the bucket down the road. All you’re really truly saying is under his tenure, the ninety million will not be paid if he gets a no vote.”
Usher said a no vote in the Parliament does not stop another government from coming forward and making the payment.
“At the end of the day it will not be the parliamentarians that will pay. It will be a payment made by the Government of Belize, and who has to make sure that you bridge that gap is the business community and the general public who pays the taxes. So that is the bottom-line from the Chamber’s standpoint; it is a bill, a liability to the country that will not go away.” (CMC)