Lackluster at Best



Friday, April 12, 2019

“The whole Belize financial system is dead for offshore banking operations.  Nobody will trust a bank in Belize after this.”  This was the foreboding statement made by Dr. Giovanni Caporaso Gottlieb in response to the Central Bank of Belize’s (CBB) revocation of license for Choice Bank Ltd.   The recent voluntary closure of Atlantic International Bank Limited (AIBL) certainly lends credence to the statement.  AIBL was caught up in the Sanctuary debacle and was accused of helping to facilitate the Sanctuary Belize real estate scam shut down by the US Federal Trade Commission.  All this in addition to losing its correspondent banking relationship with Bank of America.  Since 2011, AIBL no longer has any affiliation to Atlantic Bank Limited, Belize’s largest bank, yet the international banking world is very sensitive to the smear of contamination.  Even a whiff of impropriety could result in corresponding banks like Bank of New York Mellon to completely sever ties with Atlantic Bank Limited. This would in effect spell disaster not only for the offshore banking operations but for the entire financial sector in Belize.

With two offshore banks closing within just the last ten months, Belizeans are left to wonder.  What measures if any is the GOB, through its fiscal agent the Central Bank of Belize, taking to ensure financial stability for Belize?  It seems that the Board of Directors at the Central Bank have twice been caught asleep at the wheel and are reeling instead to contain and clean up the mess after the fact. Certainly, there has been no effective or efficient compliance mechanisms in place to ensure that the integrity of Belize’s banking industry was not affected by de-risking.  In November 2018, the IMF reported that between 2013 and 2016 Belize lost 83% of its corresponding banking relationships. The IMF also reported that incredibly even the Central Bank of Belize lost 2 of its 5 corresponding banking relationships.

The newly appointed Chairman of the Board of Director’s at the CBB is Mr. Joey Montalvo and Belizeans are left to wonder exactly what he brings to the table with his area of expertise.  Mr. Montalvo is retired from American Sugar Refining/Belize Sugar Industries (ASR/BSI) and was allegedly instrumental in the splintering of the Belize Sugar Cane Farmers Association (BSCFA) into smaller groups.  This weakened the bargaining power of the once powerful association and allowed ASR/BSI to break the strike action of the caero in the North and to sign these splinter groups to disadvantageous agreements for cane deliveries. This all happened as the GOB seemingly stood on the side of big business instead of protecting the interests of small Belizean farmers. It is the same GOB that sent in military troops to disband the demonstration at Tower Hill. Belizeans should recall it was at this stand-off that Atanacio Gutierrez lost his life defending his livelihood and the livelihoods of thousands of his fellow cane farmers.

Mr. Montalvo was also instrumental in lobbying for the sellout of BSI to ASR.  The GOB was peculiarly interested that the sale materialized refusing to consider a proposal that would have allowed the industry to remain in the hands of Belizeans. It also did not consider the nationalization of this most vital industry in the North opting instead that it should be sold to private foreign-owned interests.  It is also interesting and important to note that over the years the director’s fees for Central Bank of Belize has increased, in 2013 it was $31,500.  In 2017 those same fees were at $93,300.  Mr. Montalvo’s performance as Chairman of the Board of Directors of the CBB so far is remarkable only because it has been so dismal.  It will be interesting to see however what the director’s fees for 2018 are at the CCB and to see if the PM coincides with us on the evaluation of Mr. Montalvo’s lackluster performance or chooses instead to reward him.

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