Economist Eduardo Garcia Michel, in the Listin Diario, explained the reason why it makes little sense for the nation to issue sovereign bonds at this time. Garcia Michel says that to increase the nation’s indebtedness in foreign currency of the nation only to increase the spending capacity of the government is not reasonable nor convenient. He highlights that the government has just increased taxes to achieve the same objective. "What it has to do is efficiently manage those resources and eliminate generalized subsidies," he says. He thinks the issuing of sovereign bonds is untimely because: 1) International markets are very volatile now and do not guarantee an attractive placement regarding good terms or interest rates. 2) The government has more than US$700 million pending to be disbursed from international organizations for long term investment projects. He feels priority should be given to disbursing those resources prior to implementing a sovereign bond initiative. 3) The issue would represent a substantial burden on the younger generations, when it only promises to increase government spending. 4) The debt service levels, already high, will only increase. Garcia Michel warns that without a more rational use of government spending there will be no guarantees of adequate use of debt. He explained that there is no restriction on how the government can use currency generated by the sovereign bonds that has to be paid in hard currency. He concludes, "At the end, without the bonds the country could have a magnificent year, but with the bonds and bad policies, it would sink."
