7 News Belize

Central Bank On Political Spending Of Public Funds
posted (June 30, 2015)
And Recently, whenever the Opposition Party criticizes public spending from the UDP government, the members usually imply or directly accuse the Barrow Administration of using public funds - or Petrocaribe funds - for political patronage. The suggestion is usually that these important monies, which are often needed elsewhere, but instead, they are spent to court voters or keep them loyal to the party.

So, what does the Governor of the Central Bank have to say about such an accusation being repeated at every opportunity? That's what we asked him yesterday, and he told us that there is no evidence that he has seen to support it:

Daniel Ortiz
"As far as you're aware as the banker of the government, can this allegation of public funds being used for politicking by the UDP government be a legitimate case that can be made to the general public?"

Glen Ysaguirre - Governor, Central Bank of Belize
"I haven't seen any evidence to indicate if that can be so. Whether or not the government makes or as a policy, the government in its budget makes allocation for instance to provide money for constituencies and area representatives to host these social events. From my understanding of the Petrocaribe arrangement, and I was at the anniversary celebration this morning, there is a component intended for social activities and social events. And so I do not know is that is consistent, those who have that concern would have to have a point to what in the agreement prevents the government from doing that. I don't know if anything does, I understand from comments made by Venezuelan representative at the function this morning that they don't see anything inconsistent with some of those things and what the program requires them to do."

Reporter
"Sir one of the suggestion by the critics has also been that the reason why the money is being kept at the Central Bank is because it is out of the reach of the Auditor General."

Glen Ysaguirre - Governor, Central Bank of Belize
"That's absolutely inaccurate and untrue. If you look at the Central Bank Act, there's a clause somewhere almost at the back of the Central Bank Act whereby if there is any concern, the Auditor General does have access to go in there and audit. We provide statements to the accountant general for all the accounts operated by the government on a monthly basis. In fact I think when one media house was waving around a statement it came from the Central Bank. It probably did, because we are the bankers for the government and we provide them with monthly bank statements so they can reconcile. So the auditor general does have access to all that information."

The Governor of the Central Bank also spoke generally on the effect that Petrocaribe monies have on the spending power of the country's financial reserves. He explained that those who make the comparison between the borrowing done for the Superbond and the loan arrangement for Petrocaribe continue to miss the point that the assets under the care of the Central Bank are far greater today than what they were during the Musa Administration:

Glen Ysaguirre - Governor, Central Bank of Belize
"The monies from the Petrocaribe are being spent in Belize. A lot of comparison are being made in regards to monies borrowed from under the super bond. There were concerns as to how it was used and disposed of. But there's a clear distinction between what is happening under Petrocaribe and what took place under the super bond. Under the super bond we borrowed some 500 million US dollars over a period of time. But if you look at the Central Bank reserves during that same period of time, you'd have seen that the Central Bank reserves actually shrunk. so that would suggest to you that that 500 million dollars did not go on spending significantly in Belize but went to pay external debts or went somewhere else. Now when you look at what is happening under the borrowing we are doing, the Petrocaribe, if you look at the Central Bank reserves since 2007 or since 2008, it has grown to about 60 million dollars US. we now have reserves I think in the neighborhood of 500 million US and to a large extent, the build-up of those reserves are as a result of the hard currency that comes in from that Petrocaribe program. So yes, Belize dollars are being spent here but the US dollars are also coming in and building the reserves of the country so that when we need to repay any of the obligations of the government including the obligations of the super bond, hard currency is there to do it."

To reiterate, Ysaguirre says that the reserves at the Central Bank are valued at close to 500 Million US Dollars.

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