The Central Bank Of Belize Imbroglio – Follow The Money

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Most Belizeans were shocked by the summary firing of Central Bank Governor Gustavo Manuel Vasquez by Prime Minster Johnny Briceño on 13 August 2021. The Governor had only been on the job since April of 2021. Both his character and qualifications are stellar. He holds a Masters Degree from the World renowned Wharton School of Business of the University of Pennsylvania, where he majored in Finance and Public Policy Management. He began working at the Belize Central Bank in 1983 where he served for fourteen and one half years as Director of Banking Supervision. He then worked with the Cayman Island Monetary Authority as a Special Advisor to the Managing Director on Financial Sector and Regulatory Issues. Mr. Vasquez later joined the IMF as a Senior Technical Assistant Advisor and Senior Financial Sector Expert for fifteen years. Thereafter, he spent five years providing consultancy services to the World Bank, the Inter- American development Bank, the Government of Bermuda and its Monetary Authority, Central Bank of Albania, ECOWAS West Africa, among others.

In Belize Mr. Vasquez’s boss was Prime Minister John Briceño. They are both from the Orange Walk District. And, it is fair to assume that if it was not believed he was a staunched supporter of the People’s united Party he would never have landed that most coveted job as Governor of the Belize Central Bank. He has been residing in Belize since 2016. What then went so wrong to cause the PM to fire him so quickly and so suddenly?

Neither the erstwhile Governor nor the PM have so far informed the nation as to what led to the firing. But that is information which must be disclosed to our nation in the interest of transparency and accountability. Based on the traffic on social media and on talk shows everyone wants to know what is behind this sudden firing. Both the Governor and the PM are Public Officers. They are paid from the Public purse which is funded by taxpayer’s money. They both work for the taxpayers of this nation. They therefore have a legal and moral obligation to inform the nation as to what led to the termination.

To those of us who know both individuals the firing came as no surprise. Governor Vasquez could never have remained in the employ of the Briceño administration for long. He was the epitome of a square peg in a round hole. He is a consummate regulator. He spent most of his life ensuring that banks and financial institutions scrupulously obey the laws and regulations governing those institutions. It is not in the DNA of Mr. Vasquez to do anything that does not strictly comport with the spirit and intendment of those laws and regulations.

On the other hand Prime Ministers the world over are not known to be scrupulous in the observance of laws and regulations. And, Belizean Prime Ministers are no exception. In 1989 PM Said Musa quickly took action after the PUP had won that General Elections to cause the newly appointed Chief Justice Manuel Sosa to be moved from his position. A Civil suit was filed in the Supreme for the purpose of nullifying his appointment. And, in 1999 Judge George Meerabux ruled in a closed door hearing of which Chief Justice Sosa was given no notice and at which he therefore was not present, that CJ Sosa’s appointment was null and void because PM Sir Manuel Esquivel, who had appointed him to the post, had not fulfilled the constitutional requirements to consult with the Leader of the Opposition before so doing.

Clearly the hearing was a sham and the decision was a perversion of justice. Mr. Justice Sosa was not given due process. He was not given an opportunity to be heard or to defend himself. To its shame, our judiciary, in foul collusion with the Executive, had violated the very rule of law it was sworn to uphold. Judge Meerabux was shortly thereafter dismissed after a full hearing in Court, for misconduct in relation to a wholly different matter. And, the decade from 1998 to 2008 witnessed the meltdown of our financial institutions and the wholesale corrupting of our Public service. It is unquestionably the most corrupt decade in the history of our public service to date.

Sir Manuel Sosa, (he was subsequently knighted), like Manuel Vasquez, is scrupulously honest. He is an erudite and consummate professional, a man of integrity. Nothing in his DNA would permit him to do anything that is not lawful and above board the PUP administration could not function with such a person sitting in the chair of the Chief Justice. The leadership of the People’s United Party has historically exhibited a deep aversion for persons of the ilk of Manuel Vasquez and Manuel Sosa.

If, however, there ever was a time when Belize needed a Central Bank Governor of the ilk of Manuel Vasquez it is now. The release which the Central Bank published on April 11, 2021 publicizing the appointment of the new Governor stated that “Mr. Vasquez assumes the role of Governor during a period of historic economic and financial crises. He is committed to judiciously deploying the resources of the Central Bank of Belize to support National economic recovery efforts while safeguarding the value of our currency and the stability of the financial sector.”

In a letter to the staff of the Central Bank advising them of his termination Mr. Vasquez stated as follows:
“Please be absolutely assured that I leave with my head up high as I tried my best to restore the integrity and operational autonomy of the Central Bank, and certainly faced stiff opposition from the Ministry of Finance and Special financial and economic sector interests. This is now the beginning of another chapter for the Central Bank as I Take All the necessary actions to defend myself and my reputation and that of the Central Bank.”

That letter leaves no doubt that when Mr. Vasquez took office he discovered that the Central Bank was not acting like the autonomous body it is, under our laws, but that it was wholly under the domination of the Ministry of Finance. Additionally, it suggests that Mr. Vasquez himself was receiving tremendous pressures from special financial and economic sector entities in country, to cause the Bank to act in ways inconsistent with that of the role and functions of the Central Bank of Belize.

When a country is embroiled in economic and financial crises the Minister of Finance not infrequently engages in heated confrontations with the Governor of the Central Bank if that Governor is a principled person and refuses to engage in activities which he believes are not within the ambit of the laws and regulations governing the Central Bank, and which the Minister is pressing him to engage in. Thus it was that the Minister of Finance of Barbados in 2017 summarily fired the Governor of the Central Bank because he refused to do the Finance Minister’s bidding. The Finance Minister wanted the Barbados Central Bank to print Barbados dollars beyond a limit which the Governor deemed prudent. And, when the Governor refused so to do, the Minister of Finance summarily dismissed him. Ominously, shortly after the firing, the Barbados government had to go to the IMF cap in hand and subsequently retrenched in excess of three thousand Public Officers.

To date we do not know what is the root cause of the firing of Governor Vasquez. What we do know, however, is that our country is experiencing economic and financial crises. We also know that we are failing to honour our obligations to our bond holders because we do not have the foreign currency with which to pay them. The tremendous short fall in foreign currency earnings due to the effect of the Covid19 Pandemic is militating against the making of those payments.

Additionally, what we do know is that notwithstanding the drastic reduction in activity in the tourism and other sectors, tremendous amounts of American dollars still seem to be circulating in the informal economy. And, drug planes continue to land in the country frequently and with impunity. Those planes are known to bring dollars, drugs and weapons.

It is the responsibility of the Central Bank to ensure that the proceeds of the drug trade do not co mingle with legitimately earned foreign dollars and enter into our Banking System. If this were to happen it would gravely affect our Correspondent Banking Arrangement which even at this time is already on life support.

While Manuel Vasquez readily appreciated the dangers inherent in such an occurrence, the majority of our political leadership either do not appreciate that fact or they do not care about it, as is evidenced by the very cavalier position they take with the respect to our cattle sales to Guatemala. Nonetheless, it should not be necessary for the nation to be speculating on a matter as important as the summary firing of the Central Bank Governor who is wholly beyond reproach, so soon after his appointment. The Prime Minister needs to call a press conference and ventilate the issue. His failure so to do is conducing to the further erosion of the already waning trust which Belizeans have in him and his administration.

Article by Wilfred Elrington S.C. Former Belize Minister of Foreign Affairs.