Economist Frederic Emam Zade focused in his Saturday column in El Caribe newspaper on how the government has found a new scapegoat. In his imaginary dialogue between two Dominicans, Emam Zade highlights how the government no longer has the Fern?ndez government to blame for its economic problems, nor the war in Iraq, and so now it has Baninter.
Emam Zade comments on how the government now blames Baninter and its collapse for the 20% inflation and 40% interest rates, and for having to issue US$1.5 to US$2 billion in sovereign bonds and sign an agreement with the International Monetary Fund.
He says that the reason behind Baninter?s demise was that the government let interest rates skyrocket while tightened the reins on the economy, thereby increasing costs and lowering sales for many of its clients, and in turn creating liquidity problems. ?If the government had not spent so much or borrowed so much, Baninter would not have gone bankrupt. If the government had confronted the problem when it exploded last year, the losses would have been RD$5 billion, and not RD$55 billion. That RD$50 billion is the price for the sinister cowardness of the government, which the people will unjustly have to pay for.?
Emam Zade also focuses on the bank?s offshore scandal and the government?s benevolence in assuming the debt, in US dollars, to those depositors. ?What is happening is that the government is taking advantage of the ignorance and the fear of the depositors and cashing in pesos for their dollars at a lower exchange rate, thus holding onto the dollars and obtaining information whereby it may ascertain whether the money had been reported or whether any taxes had been evaded.?_
Emam Zade comments on how the government now blames Baninter and its collapse for the 20% inflation and 40% interest rates, and for having to issue US$1.5 to US$2 billion in sovereign bonds and sign an agreement with the International Monetary Fund.
He says that the reason behind Baninter?s demise was that the government let interest rates skyrocket while tightened the reins on the economy, thereby increasing costs and lowering sales for many of its clients, and in turn creating liquidity problems. ?If the government had not spent so much or borrowed so much, Baninter would not have gone bankrupt. If the government had confronted the problem when it exploded last year, the losses would have been RD$5 billion, and not RD$55 billion. That RD$50 billion is the price for the sinister cowardness of the government, which the people will unjustly have to pay for.?
Emam Zade also focuses on the bank?s offshore scandal and the government?s benevolence in assuming the debt, in US dollars, to those depositors. ?What is happening is that the government is taking advantage of the ignorance and the fear of the depositors and cashing in pesos for their dollars at a lower exchange rate, thus holding onto the dollars and obtaining information whereby it may ascertain whether the money had been reported or whether any taxes had been evaded.?_