Belize is in danger of defaulting on its
debt after it missed a $23m (£14.6m) bond payment due on Monday.
The
government still has a 30-day grace period to pay the interest, but said it was
unlikely to be able to do so.
Creditors
accuse Belize of trying to force a Greek-style debt restructuring on holders of
the $550m bond, which represents half its public debt.
The
row has drawn attention to Caribbean countries' growing debt burden amid falling
tourism revenues.
Much
of the region depends on tourists from Europe and the US for its income, but the
global financial crisis has cut visitor numbers severely.
'Scalping'
The
Belizean "superbond" is due to mature in 2029, but pays an annual "coupon" to
holders, which now amounts to 8.5%.
Prime
Minister Dean Barrow said he would renegotiate the terms of the bond after he
won a second term in March.
Earlier
this month, he said Belize could not afford the coupon payment, adding: "Our
hope, however, is that we can move quickly towards a sensible restructuring of
the instrument."
The
government's proposals include extending the maturity date of the bond and
cutting the amount to be repaid by up to 45%.
Creditors
have been unenthusiastic, saying the offer is worth less than this year's Greek
debt restructuring.
"[It's]
not a haircut, it's a scalping," international finance professor Arturo
Porzecanski, of American University in Washington, told Bloomberg news
agency.
"It
puts Belize in the same league as the most punishing restructurings in
history."
Currency peg
Belize,
like its fellow members of the Caricom regional trade bloc, has been suffering
from the global downturn.
As
with many other countries in the region, its currency is firmly pegged to the US
dollar, at two Belizean dollars to one US, so it cannot devalue its way to
improved competitiveness.
Declining
tourism has proved a problem, but the country has also added to its debt burden
by nationalising local utilities Belize Telemedia and Belize Electricity.
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