trade deficit Q for frederic..

I don't really have a direct answer to either of your questions but I wanted to add and somehow contribute my 2? to what you may be getting at. I think that sooner or later the Dominican government will realize that what it is trying to sell (confidence in the economy) comes at a high price. Inflation and corruption eventually do away at the meager profits that temporarily dock at our ports in the way of tourism and imported goods, such as secondhand SUVs and rundown entertainers. The Dominican Republic has also put into effect many policies and projects that call for higher taxation of a people who can't even afford to pay actual electricity bills.

Something to consider........

One thing that worries me about the recent borrowing trend by this gov't, is the consequences of the increasing debt that the country is carrying and the implications of the high debt to GDP ratio, the devaluing peso, and the ability of future gov,ts to repay their obligations. I think most Dominicans and also expats are not aware of the provision in the Dominican constitution that will allow the US to step in to "protect" American interests in the DR. This has occurred in the past when the US took control of the country's aduana to secure and repay the debt that was owed by the DR to the US. This can and will happen again if gov't does not control spending and do something to reduce the level of corruption for the benefit of gov't supporters in the country.
While Argentina is a spectre of what could happen in the DR I doubt greatly that the US would allow this scenario to happen in the DR. They WILL step in before that should happen and collect their due. Where that will leave the average Dominican people and all non-US expats is anyones guess.

I'm not sure Mondongo......

but that's what I've been lead to believe, first by an American landowner in San Cristobal (been in the DR 50 yrs and checked it out with the US Embassy before he purchased his land) and by a Dominican legal eagle who is at present an advisor to Hippo.
Since I haven't personally read the entire Dominican constitution I'm only repeating what I've been told and what I've heard about the last time the US took control of Dominican customs to recoup the monies owed them.
Perhaps Golo or one of the other locals could tell you more.
All I know for sure is our friend in SC said not to worry about buying a place in the DR as he was farily sure that in protecting US holdings the Americans would also look kindly on their northern neighbours and assist them also!! (That I have my reservations about!!)

MommC

Do you honestly believe that ANY country would introduce a clause in its constitution that would allow another country to invade it in order to collect a debt (or any other reason for that matter)?

Do you honestly believe that the US (or any military power) needs a clause in the constitution of an *enemy* country to invade it?

^{Hmmm... makes me wonder}


Mrs. Rice: Sir, we checked the constitution of Afghanistan, it doesn't give us the right to invade it.

Bush: I guess we can't do anything. Dammit!

Well Pib....all I know is the US did take over the customs

dept. in the Dr in the past and it is my understanding that they had quite a hand in the writing of the DR constitution so Lord knows what is written into it. As I stated I haven't read it (come to think of it I don't think I've read all of the Canadian constitution either!!) Have you read your constitution??
What I believe and what I've been told are sometimes two different things, however I did state that this is what I've been told by someone who made it a point to find out what his options were before he plumked his hard earned cash down to buy property in the DR 50 yrs ago and by a Dominican lawyer who is in a position to have some knowledge of the constitution.
If it is true (which I really can't say one way or the other not having read the document) I wondered what effect it would have on the monetary/deficit situation in the DR.
Perhaps someone reading this thread could enlighten us all........

Excuse me, but I thought that it was somewhat obvious that... never mind.

I don't know how the constitution ended up involved in a thread about trade deficits and such. IMHO the constitution doesn't have much influence in the mighty powers of world finances, that BTW, I don't claim to understand in the least.

Yes, the US took hold of our Customs in 1905, actually *created* it to collect an old debt that the country had with old Uncle Sam. Did the Dominican constitution give the US "the right" to do so? I doubt it. And frankly it is not like they needed it, huh?

The *deal* ended when Trujillo canceled the remaining of the debt and the DR government took hold of the Customs Service. When you go by the malec?n check for one of the two monuments there. One of them (Obelisco Hembra) was originally built to commemorate the Trujillo-Hull treaty (IIRC), that ended the "embargo" on our Aduanas in 1940.

edited by Pib to add:

Curious note, the remaining debt paid by Trujillo was only a little over 9 million USD

And to further hijack this thread...

No, the US had no *saying* in our original constitution, although I admit that the US had *inspired* the idea of DR. I don't think that in 1844 the US had *that much* influence in the area, I am up for a correction if I am wrong.


First paragraphs of our constitution:

De la Naci?n, de su Soberan?a y de su Gobierno.

ART. 1.- El pueblo dominicano constituye una Naci?n organizada en Estado libre e independiente, con el nombre de Rep?blica Dominicana.

ART. 2.- La soberan?a nacional corresponde al pueblo, de quien emanan todos los poderes del Estado, los cuales se ejercen por representaci?n.

ART. 3.- La Soberan?a de la Naci?n dominicana, como Estado libre e independiente es inviolable. La Rep?blica es y ser? siempre libre e independiente de todo poder extranjero. Por consiguiente, ninguno de los poderes p?blicos organizados por la presente Constituci?n podr? realizar o permitir la realizaci?n de actos que constituyan una intervenci?n directa o indirecta en los asuntos internos o externos de la Rep?blica Dominicana o una injerencia que atente contra la personalidad e integridad del Estado y de los atributos que se le reconocen y consagran en esta Constituci?n. El principio de la no intervenci?n constituye una norma invariable de la pol?tica internacional dominicana.

^{emphasis added by Pib}

Having thoroughly hijacked this thread and used it to spew some irrelevant information, I now proceed to bug off and let you continue educating me with some more financial wisdom (which I sorely lack).

I think that the trade deficit number is skewed by the one time Sovereign Bonds and contracts in 2 quarters.

Mondonguito

Here you have an unabridged version of the Dominican constitution: Dominican Congress


edited by Pib to add:

Of course, being that the Congress' website... it is missing a part. Check this one. It is the National Library's website.

Which is exactly why I haven't read it.......Mondongo

Hopefully tho' my foray into this topic will get some people reading it so that I and others will gain a better understanding of what it contains other than what I've been told by only two people......regardless of who those people were.

See Pib......sometimes my "unfortunate wording" as pertains to this thread and other threads provokes thoughtful, meaningful dialogue because it has "grabbed" the attention of those who are better versed in the subject than I am.........
Soldier on troops (I'm getting too old to read all the relevant material anyway - younger eyes also have a tendency to pick up subtle nuances that I may miss! )