The Technical Secretary of the Presidency rejected the view that the Dominican government has no control over its spending. In a talk before the Association of Business Women on 17 October 2003 and as published in a paid advertisement in the Listin Diario today, former Governor of the Central Bank Carlos Despradel blames the present economic debacle on the high petroleum prices, the contraction of US sourcing of Dominican goods and services affecting free zone exports and tourism receipts and the collapse of Dominican banks.
“Our people know, because they are intelligent, that the economic problems we suffer are mainly the consequence of adverse external and internal factors, about which we can do little,” he stated. “Likewise, the people will appreciate the stringent austerity with which the public finances will have to be handled in the next months and thus will be less insistent in its demands,” he said.
Despradel said that proof of reduced spending is demonstrated by the fact that from January-September 2003, capital expenditures were 33.3% less than those for the same period last year.
Despradel said that the only way to overcome the present situation is to maintain the fiscal discipline implemented in past months. Despradel said that the position of President Hipolito Mejia is “that what is necessary be done.”
He commented that very few Presidents would submit to the disciplinary demands of the IMF in a pre-election climate.
Despradel advocates more taxes, which he said would be forthcoming in the “next few days.” The government had been counting on RD$3 billion to be produced by a 5% tax on exports, which turned out to be difficult to implement and was boycotted by export sectors on grounds of it being in violation of the constitution that establishes only Congress can impose taxes.