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Western Hemisphere > Belize

You are looking at 1 - 10 of 18 items for :

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Cover Policy Papers
Debt for Development Swaps: An Approach Framework
International Monetary Fund. Strategy, Policy, & Review Department
and
World Bank
The aim of this note is to help stakeholders optimize their decision-making on when, where, and how to use debt-for-development swaps (“debt swaps”), ensuring they bring the intended benefits to all parties involved. It also proposes new approaches to structure these mechanisms, making them less transaction-heavy and more sustainable while maintaining accountability for fulfilling policy and spending commitments. Debt swaps are agreements between a government and one or more of its creditors to replace existing sovereign debt with one or more liabilities1 that include a spending commitment towards a specific development goal. These goals may include nature conservation, climate action, education, nutrition, support for refugees, among others. The spending commitment is often associated with the country's decision to pursue an important development policy.
Keywords:
spending commitment; expenditure efficiency perspective; transparency policy; expenditure program commitment; expenditure commitment; debt sustainability prospect; debt amortization profile; Debt conversion; Debt service; Debt management; Debt sustainability; Global
Cover IMF Working Papers
Debt-for-Climate Swaps: Analysis, Design, and Implementation
Mr. Marcos d Chamon
,
Erik Klok
,
Mr. Vimal V Thakoor
, and
Mr. Jeromin Zettelmeyer
This paper compares debt-for-climate swaps—partial debt relief operations conditional on debtor commitments to undertake climate-related investments—to alternative fiscal support instruments. Because some of the benefits of debt-climate swaps accrue to non-participating creditors, they are generally less efficient forms of support than conditional grants and/or broad debt restructuring (which could be linked to climate adaptation when the latter significantly reduces credit risk). This said, debt-climate swaps could be superior to conditional grants when they can be structured in a way that makes the climate commitment de facto senior to debt service; and they could be superior to comprehensive debt restructuring in narrow settings, when the latter is expected to produce large economic dislocations and the debt-climate swap is expected to materially reduce debt risks (and achieve debt sustainability). Furthermore, debt-climate swaps could be useful to expand fiscal space for climate investment when grants or more comprehensive debt relief are just not on the table. The paper explores policy actions that would benefit both debt-climate swaps and other forms of climate finance, including developing markets for debt instruments linked to climate performance.
Keywords:
Debt-for-climate swaps; climate mitigation; climate adaptation; climate finance; fiscal space; debt; NDCs; climate swap; debt risk; Debt-Climate swap; IMF working papers; climate investment; Debt conversion; Debt relief; Debt restructuring; Debt service; Global; debt swap operation; trilateral debt swaps; financial support; debt relief debt swap
Cover IMF Working Papers
Public Investment Scaling-up and Debt Sustainability: The Case of Energy Sector Investments in the Caribbean
Ahmed El-Ashram
The question of how scaling up public investment could affect fiscal and debt sustainability is key for countries needing to fill infrastructure gaps and build resilience. This paper proposes a bottom-up approach to assess large public investments that are potentially self-financing and reflect their impact in macro-fiscal projections that underpin the IMF’s Debt Sustainability Analysis Framework. Using the case of energy sector investments in Caribbean countries, the paper shows how to avoid biases against good projects that pay off over long horizons and ensure that transformative investments are not sacrificed to myopic assessments of debt sustainability risks. The approach is applicable to any macro-critical investment for which user fees can cover financing costs and which has the potential to raise growth without crowding-out.
Keywords:
WP; cost saving; energy investment; investment project; investment scaling-up; management framework; Public Investment; Debt Sustainability; Growth; Energy Reform; Caribbean; User Fees; Public investment spending; Public investment and public-private partnerships (PPP); Public sector
Cover IMF Working Papers
Sovereign Debt Restructurings in Belize: Achievements and Challenges Ahead
Mr. Tamon Asonuma
,
Gerardo Peraza
,
Kristine Vitola
, and
Mr. Takahiro Tsuda
This paper examines the causes, processes, and outcomes of the two Belize sovereign debt restructurings in 2006–07 and in 2012–13 that occurred outside of an IMF-supported program. It finds that the motivation for the two debt restructurings differed, as the former was driven by external liquidity concerns while the latter was motivated by a substantial increase in the coupon rates and future fiscal solvency concerns. Despite differential treatment between residents and non-residents, both 2006–07 and 2012–13 debt exchanges were executed through collaborative engagement, due in part to the existence of a broad-based creditor committee and the authorities’ effective communication strategy. However, while providing temporary liquidity relief, neither of the debt restructurings properly addressed long-term debt sustainability concerns. Going forward, the success of the 2012–13 debt restructuring will still depend on the country’s ability to strengthen fiscal efforts and public debt management framework.
Keywords:
WP; bond; Belize; deficit; exchange offer; External Debt; Inter-Creditor Equity; Sovereign Debt Restructuring; debt exchange; growth performance; step-up coupon; cash flow; Belize debt restructuring; market haircut; amortizing bond; debt exchange operation; market financing; debt sustainability concern; bond exchange; Debt restructuring; Bonds; Debt service; Global
Cover Policy Papers
Sovereign Debt Restructuring - Recent Developments and Implications for the Fund's Legal and Policy Framework
International Monetary Fund
his paper reviews the recent application of the Fund’s policies and practices on sovereign debt restructuring. Specifically, the paper: • recaps in a holistic manner the various policies and practices that underpin the Fund's legal and policy framework for sovereign debt restructuring, including on debt sustainability, market access, financing assurances, arrears, private sector involvement (PSI), official sector involvement (OSI), and the use of legal instruments; • reviews how this framework has been applied in the context of Fund-supported programs and highlights the issues that have emerged in light of recent experience with debt restructuring; and • describes recent initiatives in various fora aimed at promoting orderly sovereign debt restructuring, highlighting differences with the Fund’s existing framework. Based on this stocktaking, the paper identifies issues that could be considered in further depth in follow-up work by staff to assess whether the Fund’s framework for debt restructuring should be adapted: • first, debt restructurings have often been too little and too late, thus failing to re-establish debt sustainability and market access in a durable way. Overcoming these problems likely requires action on several fronts, including (i) increased rigor and transparency of debt sustainability and market access assessments, (ii) exploring ways to prevent the use of Fund resources to simply bail out private creditors, and (iii) measures to alleviate the costs associated with restructurings; • second, while creditor participation has been adequate in recent restructurings, the current contractual, market-based approach to debt restructuring is becoming less potent in overcoming collective action problems, especially in pre-default cases. In response, consideration could be given to making the contractual framework more effective, including through the introduction of more robust aggregation clauses into international sovereign bonds bearing in mind the inter-creditor equity issues that such an approach may raise. The Fund may also consider ways to condition use of its financing more tightly to the resolution of collective action problems; • third, the growing role and changing composition of official lending call for a clearer framework for official sector involvement, especially with regard to non-Paris Club creditors, for which the modality for securing program financing commitments could be tightened; and • fourth, although the collaborative, good-faith approach to resolving external private arrears embedded in the lending into arrears (LIA) policy remains the most promising way to regain market access post-default, a review of the effectiveness of the LIA policy is in order in light of recent experience and the increased complexity of the creditor base. Consideration could also be given to extending the LIA policy to official arrears.
Keywords:
PP; debt exchange; Fund policy; debt restructuring; debt sustainability; Fund staff; market access; Fund resource; Debt restructuring; Sovereign debt restructuring; Bonds; Debt sustainability; Global; West Africa; Africa; Caribbean
Cover IMF Staff Country Reports
Belize: Staff Report for the 2011 Article IV Consultation
International Monetary Fund
The 2011 Article IV Consultation report concludes that Belize has weathered the financial crisis relatively well when compared with Caribbean Community peers. Executive Directors have commended the authorities for their macroeconomic management, which enabled Belize to weather the financial crisis. Although the near-term outlook is positive, challenges arise from the uncertain global environment, rising gross financing needs of the public sector, and the weak investment climate. Directors have emphasized the need to tighten further the fiscal stance and rebuild macroeconomic buffers.
Keywords:
ISCR; CR; current account; financing; Belize; GDP; financing needs; private sector; fiscal policy; central bank; sensitivity analysis; credit bureau; banking sector; debt service; export credit; medium outlook; Caribbean; Global
Cover IMF Staff Country Reports
Belize: 2010 Article IV Consultation-Staff Report; Informational Annex; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Belize
International Monetary Fund
The economy of Belize in recent years has been vulnerable to adverse shocks owing to its weak external position, policy rigidities, and reduced access to external financing. Executive Directors commended the authorities for their prudent macroeconomic management during the crisis. Directors emphasized the need for fiscal consolidation strategy, and stressed the need to strengthen the banking system. They supported plans to improve public financial management and tax administration. They welcomed monetary policy framework, liquidity management, and development plan policies, and offered expert assistance as well.
Keywords:
ISCR; CR; loan facility; authority; overdue loan; staff appraisal; staff state; Belize economy; Commercial banks; International reserves; Global; Caribbean
Cover IMF Staff Country Reports
Belize: Use of Fund Resources: Request for Emergency Assistance: Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Belize
International Monetary Fund
The staff report for Belize’s use of Fund Resources and Request for Emergency Assistance is examined. Economic growth has been sustained largely by rising oil production, while inflation has remained under control. Despite rising oil production, economic growth has been low in 2007, in part because of the impact of Hurricane Dean. The authorities are confident that the banking system is stable and adequately capitalized, and largely insulated from international market turmoil.
Keywords:
ISCR; CR; IMF financial support; emergency assistance from the IMF; financial support; balance of payments impact; projections show; financial market turmoil; Natural disasters; Emergency assistance; Debt service; Global; Caribbean
Cover IMF Staff Country Reports
Belize: 2008 Article IV Consultation: Staff Report; and Public Information Notice on the Executive Board Discussion by the Executive Director for Belize
International Monetary Fund
Belize’s near-term macroeconomic prospects have improved over the past year. The main risks to growth and financial stability arise from fiscal challenges and deterioration in the global outlook. Despite data limitations that constrain the analysis, the Belize dollar appears broadly in line with fundamentals, and the external accounts are not a threat to external stability. Progress in consolidating the public sector’s financial position needs to continue. A front-loaded fiscal adjustment is necessary to lower Belize’s debt ratios and regain market access.
Keywords:
ISCR; CR; Belize; management fund; GDP; holding; debt restructuring agreement; membership status; revenue department; GDP ratio; Oil; gas and mining taxes; Caribbean; Global
Cover IMF Staff Country Reports
Belize: Selected Issues
International Monetary Fund
Belize should reduce debt ratios to comfortable levels for smooth market access, and reduce liquidity risks by stabilizing debt service. Streamlined management of the oil fund should be considered. Fiscal measures should compensate for the loss of oil revenues in the budget and avoid new borrowing. This note explores alternative measures of reserves adequacy and concludes that a reserves target of three months of imports is a reasonable benchmark. Reforms enabling more effective liquidity management involve removing the ceilings and moving to market-based interest rates.
Keywords:
ISCR; CR; Belize; cost; debt; debt ratio; adequacy benchmark; GDP ratio; CBB profit; oil revenue; petroleum revenue management fund; reserves adequacy; Oil; gas and mining taxes; Imports; Government securities; Caribbean; Central America