In a 15 December country briefing, The Economist says those protesting the economic hardships in the Dominican Republic should not blame the IMF for their plight. Describing the Mejia administration as “an incompetent government”, the magazine’s news analysis adds, “They should blame Mr. Mejia.” According to The Economist, “Mr. Mejia’s mind is on politics.” The analysis states: “Any money that the Fund might give to the Dominican Republic in the next few months is likely to be wasted on pre-election spending. Until the politicians show signs of taking responsibility for their actions, it is hard to see why they deserve any help from the Fund.”
The Economist comments that the IMF is in an awkward position of having to decide whether or not to resume a US$600-million loan program as agreed upon in August but which was suspended in October when the government without prior warning bought back the power distributors for a comparable amount. In its analysis of the present economic difficulties, The Economist also disapproved of the fact that the government, instead of compensating depositors of Baninter to the legal ceiling amount of RD$500,000, went on to guarantee all the collapsed bank’s liabilities, including offshore deposits. “Three-quarters of this money went to 80 account holders,” states The Economist report, while it notes that Dominicans will soon feel the cost of that, as the government struggles to get its finances under control by raising taxes to close the fiscal gap. Regardless of the fiscal effort, the intelligence service notes that receipts have been lower than expected. The Economist says that businesspeople “are reluctant to pay more taxes as long as the government fails to cut its spending.”