The tiny Caribbean nation of Belize hasn’t been able to catch a break since being devastated by four hurricanes and major storms between 1998 and 2002. The cost of rebuilding following those storms, along with a certain degree of fiscal recklessness, resulted in a massive increase in Belize’s debt: private-sector obligations alone rose from $296 million in 2001 to $646 million in 2003 – an increase that has now led to imminent default.
Belize has tightened its fiscal belt: a deficit of 8% of GDP in 2004/05 became just 3.1% in 2005/06. The country’s debt stock is also down from its highs: the private sector is now owed $574 million.
But Belize’s efforts...
