Flavio Dario Espinal, the dean of the law school at the PUCMM, comments today on the present government?s knack for passing off economic problems to a third party. He recalls how the Mejia administration blamed the economic predicaments of the nation on the 9/11 terrorist attack, speculation in the exchange markets, the financial oligarchy of the country, the price of petroleum, the civic society, the media and many more, while always presenting itself as the true defender of the people.
Espinal says the government lost its grip on various realities: the contradiction between fiscal and monetary policies that were clear from the start of the Mejia administration; the overheating of the economy in the first half of 2002 on occasion of the congressional and municipal election; excessive foreign borrowing; governmental overspending; the crowding out of private banking resources by governmental domestic borrowing; the inappropriate management of the financial crisis; non-compliance with the IMF agreement on two occasions; and, finally, the hostility within the business sector that generated a pernicious climate based on a lack of confidence that will take time to overcome.
As if that were not enough, after losing its bid for re-election, the government continues to wash its hands of its problems, converting them instead to the problems of the upcoming government. Even while the IMF agreement obliged the present authorities to prepare a tax reform bill by March, to be submitted before July of this year, President Mejia has stated he will leave this matter up to the next administration, without a care as to the negative impact this decision may have on the exchange rate, the cost of living and the macroeconomic condition of the country.
Espinal calls this a retaliative measure that is a clear attempt to leave its affairs in the worst shape possible for the incoming Leonel administration, which means a worsening of the economy for the people.
Espinal is also critical of the IMF, which he says was excessively complacent regarding the program of commitments for tax reform, and has not been capable to exercise adequate supervision regarding the fulfillment of commitments assumed by the present authorities. ?In other words, if in other countries the IMF has been criticized for being too demanding, in the Dominican case it will have to be criticized for being too lax when rigorous discipline was most needed by the government.?