Nals, now that I've calmed down from one of your statements in another thread
(no bad feelings there at all - I hope you know this)...
If I would have taken all the responses people give me seriously, I would have quited a long time ago from posting. I know that would make some people happy, but I'm an optimist. Never give up.
the issue is not really the size of the debt. The first concern is the ability to pay back the debt while maintaining independence and maintaining a national identity - not becoming a "McDonalds Clone Society".
As of right now, that is what Leonel has been focusing.
Thus, he restricted fiscal expansion. That resulted in putting a lid on inflation and the exchange rate. The rate went down to its real rate (not its panicking rate of uncertainty during Hippo) and reserves increased to the point that its surprising even the most optimist of optimist, myself included.
Paying the debt should not be of much worry for the time being and even for the near future.
Then, will this debt lading still allow reasonable internal taxation levels for wage earners as well as businesses,
As long that reserves increase and maintain a healthy level, repayment of the loan should not be a major problem.
Remember, a major reason for budget cuts in education, etc has to do with paying the overblown debt that Hipolito left the country with.
Remember, when Leonel left in 2000, the national debt made up 16% of GDP, four years later Hipolito left a not so nice present of debt making up 50% of the GDP as its claim on this thread.
will business confidence and continued investment in the country be maintained
Yes it will and this has been proven both in Leonel's first term and in the time he has spent in this term. The country has progressed more in the last half year than it did in the full four years of Hipolito.
In other words, for four years under Hipolito we were digging a hole, in this half year we managed to come out of the hole and now its time to build the latter.
Give Leonel a year and a half and then we can talk about things going bad. As of now, Leonel is doing a good job compared to nothing, and an excellent job compared to mr. Baldy Hipolito.
-- will a reasonable level of growth be maintained?
We are already at 2%! At par with the US and the economy is growing by the month. Every month its growing a bit faster, but the end of this year expect anything from 4 to 5% growth.
Remember how we ended 2003? -1.5% decline.
2.00% is sweet on its own, but my God, we have been blessed! Expectations was 0%, but we ended at 2% after having declined -1.5%. You can't say that is bad.
It will be maintained, unless some unforseable thing happens to the global economy.
For the moment, leave the power problems, infrastructure problems like crappy roads and 'simpler' things, like education and care for the aged outside of this, just for a moment though..
The major roads of the country are in fair conditions, good enough for a quick transport of goods from point a to point b.
In fact, Santo Domingo and Santiago on their own control a full half of the national economy and the last time I checked, Autopista Duarte is in drivable condition.
Don't want to drive, airports are all over the place.
State of the art ports are facing all sea directions.
The tourist who visit the north coast and Punta Cana think of those bumpy road as "part of their vacation experience"
The major roads in the cities are in driveable conditions.
The major important buildings where the country's governance, finances, manufacturing, etc is being done are still able to be inhabited.
We have an adequate infraestructure. Is it perfect? No. Is it excellent? No.
Is it adequate? Yes.
You want to see a bad infrastructure, look at the western third of this island. When the most important highway in a country is little more than a dirt path at places, well, enough said.
Education, though the budget has been cut, should not be hurt too much if these cuts are override with increases in the next few years.
We (well, I should talk about myself) are not a war torn society. So we cannot make those comparisons from war torn societies.
That's precisely why I posted the war torn statistics. We are not war torn and yet we are doing way better than any war torn nation and we are doing better in economic growth than non war damaged countries.
I am an optimist - the glass is half full for me most of the time
But I am also a realist. Gross fiscal and economic mismanagement will bounce back to haunt this country.
Gross fiscal and economic mismanagement is what had been going on for the past four years.
What's happening right now is putting fiscal responsibility back into the picture and simply halting all borrowings will leave the government completely bankrupt.
Things move in phases, talk to me in a year an a half. Then we can talk as to where the country is headed. Compared to the fiasco we recently went through with Hipolito, I prefer this a million times over!
Despite all my words above, the question is simple. How is the debt going to be repaid?
By attracting more investment - which is being done.
Increasing tax revenue - which is being done with the new attempt to catch tax evaders
Increasing stability and confidence in the economy - which is being done
Re-instating economic growth - which has been accomplished
Re-instating a net growth of jobs - which has been accomplished
Increasing federal reserves - which has been accomplished.
All of this contributes to bring the exchange rate to its normal level because everybody is not hyper or afraid. A stable exchange rate eases the inflationary preassures. A stable inflation causes increases in real wages to be more noticeable and that leads to increasing consumption and increasing standards of living.
