The Argentine economic troubles may be the salvation for the DR, at least for now. Argentina’s problems reflect on the region, and could result in very high interest rates for the placement, thus causing the government to postpone their placement for now. El Siglo points out that the President said on Saturday that in case it wasn’t convenient to place the bonds now, he would borrow locally. Furthermore, the Central Bank announced that it programmed the US$500 million for next year, not this year. The bonds have met with much resistance locally. Economists fear if the DR makes the placement, a vicious cycle of borrowing to pay the bonds would have begun without much having been achieved. While originally the projects were said to be used to build highways with tollbooths to recover the investment, the Senate passed a bill that allots the money for a myriad of infrastructure projects in provinces nationwide. Thus the benefits have gone from being economical to political. El Siglo newspaper points out that the government will not desist from its building plan. It mentions that the government will borrow locally. Major banks have offered to lend RD$3,000 million so the government can move ahead on several projects that were budgeted in the 2001 National Budget but for which overspending as reduced available resources. Meanwhile, the Unidad del Programa de Mediano Plazo de Financiamiento Externo, the newly created department to manage the bonds issue, and the Ministry of Finance debate the use of the funds. El Caribe newspaper editorial points out that if the government insists on making the bond placement a precise description of the works to be carried out and the holding of tenders for these should be part of the plan, as proposed by the National Association of Young Business, that also opposes their placement.
