Economist Frederic Emam Zade, director of economic studies for the Fundación Global y Desarrollo, warned that the government runs the risk of issuing the sovereign bonds and having to discount them at half price due to the lack of confidence of foreign investors in the Dominican economy. He said that the government’s efforts to discredit the economic growth of the past years for political reasons is likely to have a boomerang effect when seeking foreign investment. In his opinion, foreign investment is down 40% compared to last year. He forecast that foreign investment this year will only reach US$600 million, down from figures of above US$1,000 in the past two years. Emam Zade says that because of the negative propaganda on the state of the economy the government may not be able to take advantage of the slow down in the US economy that leads US businessmen that seek to reduce their costs to outsource production abroad. " if the DR had a good image, they would be investing here," said Emam Zade. He said that now the Dominican government is suffering the consequences of spreading doubt as of August 2000 to the economic performance of the economy that has resulted in a negative image. Consequentially, Emam Zade does not feel the timing is right to issue the bonds. He said that if buyers are not found, these will have to be heavily discounted, while the country will be indebted for the full amount.
