This week’s column in El Caribe by leading economist Pedro Silverio refers to a business without a future. Silverio is talking about the government’s recent purchase of Edenorte and Edesur. He opens by saying that the wave of privatization of state-run enterprises began in the 80s, as a result of the mounting evidence then of the government’s ineptitude at managing the nation. Government-run businesses tended to become personal fiefdoms and it is this experience that causes many people to look askance at the purchase of the electric distributors, and few have faith in the management capacity of government to better the service. Until now, according to the head of the Cenantillas economic think-tank, there has been no reason to think that the government would act with an efficiency that has not been evident in any other facets of its administration. Within this context, says Silverio, the purchase of the distributors is based on certain suppositions that will be hard to fulfill. The first is that the government would improve the cash flow of the distributors by getting more people to pay their bills. Silverio, however, feels that political necessities will force the government to be “generous”. If collections fall to pre-privatization levels, the monthly cash flow would drop by around RD$300 million. Another supposition is that expenses in salaries would be reduced under the new administration. Silverio says that this flies in the face of everything the current administration has done in relation to salaries. The third supposition has to do with the electricity rates. It is common knowledge that the charges are based on an exchange rate that is below what must be paid to the generators and this presents a negative cash flow of US$12 million per month. Government officials have had a hard time swaying public opinion that this was a good deal. “Nor have they convinced the IMF or the international agencies that have begun to give the DR financial moves bad grades,” adds Silverio. Finally, the economist says that if the arguments that the government has made a good deal are so obvious, shouldn’t it worry the government that nobody believes them?