Sovereign Debt Restructurings in Belize : Achievements and Challenges Ahead

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Sovereign Debt Restructurings in Belize : Achievements and Challenges Ahead
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Volume/Issue:
2014/132
Series:
IMF Working Papers
Author(s):
Tamon Asonuma, Gerardo Peraza, Kristine Vitola, and Takahiro Tsuda
Publisher:
INTERNATIONAL MONETARY FUND
Published Date:
July 2014
DOI:
http://dx.doi.org/10.5089/9781498369510.001
ISBN:
9781498369510
ISSN:
1018-5941
Page:
28
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.
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