Serial Defaulter Belize Votes Amid Flooding and Storm Damage

(Bloomberg) -- Voters in Belize are electing a new Prime Minister and National Assembly amid flooding, storm damage and the worst economic slump in Central America.

Whoever wins Wednesday’s vote will need to try to rein in one of the region’s heaviest debt burdens and reactivate a tourism industry devastated by the pandemic. Belize has restructured its debt four times in the last 13 years.

Opposition candidate John Antonio Briceno has promised to crack down on corruption and fast track a stimulus package through parliament. Ruling party UDP candidate Patrick Faber has pledged a low interest loan program to help revive the tourism sector and to build a new cruise port.

Adding to Belize’s woes, Tropical Storm Eta lashed the region last week, triggering nationwide floods. Some rivers have yet to subside, and Briceno told local TV station Channel 5 that flooding could hurt turnout in some spots.

Polls opened at 7 a.m. and will close at 6 p.m. local time with initial results expected later this evening.Voters wearing masks began lining up at polling stations across the country at 6 a.m.

The economy is set to shrink 16% this year, the biggest drop since at least 1980, according to the International Monetary Fund, after the tourist-dependent nation closed its borders in April to combat the spread of Covid-19. It only reopened its airports to international visitors last month.

While neighbors such as Guatemala and Honduras have relatively light debt loads, Belize’s debt will soar to 135% of gross domestic product this year, according to the IMF, from 105% last year.

“Belize will be struggling until tourism comes back,” said Nathalie Marshik, emerging markets analyst for Stifel Nicolaus & Co.

Belize’s so-called superbond, due in 2034, has slipped almost 19 cents since February, before the pandemic hit. The government restructured the notes again this year by delaying payments until May 2021. S&P expects the capitalization to save Belize at least $19.5 million.

The extra yield investors demand to hold Belize’s dollar bonds narrowed 33 basis points to 1,346 basis points on Tuesday, according to the J.P. Morgan Global Aggregate Bond Index.

©2020 Bloomberg L.P.