President Hipolito Mejia said his government is giving priority to issuing the country’s first sovereign bonds. Plans to place US$500 million in bonds on the market are going ahead. He defended his administration’s borrowing abroad saying it is a way to accelerate social and economic development. He said economists and politicians that oppose the borrowing “do not know about that and are not accustomed to the new economy.” “We should pick up more debt because we are the only ones that have not taken on more debt,” he said. “Those obsolete systems of using the money we have at home, that’s over and for that there are banks, but we have to respect the criteria of others,” he said when asked to comment on increasing criticism to the government’s new borrowing schemes. Hoy newspaper says that economists’ calculations show the government has been securing loans for US$2,182.7 million. Many of these loans are being contracted at relatively high interest rates. The newspaper approves of loans to finance development projects, but it criticizes the government for instance for using US$200 million to finance a social program that distributes RD$300 a month to low income families. The editorial writer urges the government to exercise prudence. “We simply hope that the government remembers that other governments did the same and alleged the country had the capacity to take on more debt. They left us with the inheritance of paying for that debt in detestable formulas such as the differential tax on petroleum sales.”
